Asked by Anonymous
Have 1.5k to invest for the tranche in Nov. Am thinking whether to consider temasek bond now. Any advice?
It highly depends on which you are comfortable with, SSB is government-backed bond and Temasek Bond being rated "Aaa" by Moody's is afterall still a corporate bond.
If you're adventurous enough and want to try out Temasek Bond, you can put $1,000 into that and the remaining $500 into SSB because for Temasek Bond you can only invest in denominations of S$1,000.
Do ask yourself which you are most comfortable with, never invest in something that you don't believe in. Hope this helps! :)
Can consider the Temasek bond instead as it gives 2.7% interest which is higher than what the Singapore Savings Bond is offering. Additionally, it's AAA-rated credit so it should be safe!
I would say the temasek bond. it is rated AAA, and you can always sell it back to the market if you need to money for an emergency (historically, bond prices do not move MUCH, so you won't lose/gain much from selling.)
I would personally prefer to invest in the temasek bond since it has a higher interest rate.
If you were to comapre the interest rates in Nov 2018, the annualised interest rate offered by temasek bond is 2.70%, which is higher than SSB's interest rate of 2.22%.
However, the temasek bond would be affected by rising interest rates. Rising interest rates would cause bond prices to fall. Should you sell your losses at this point, you will likely incur investment losses.
Here is a brief overview of the differences between these 2 investments!
Both have their pros and cons, you should ultimately choose the bond that would be more in line with ur financial/investment goals! hope this helps!
Between those two options, i will choose the temasek bond instead.
Higher interest rates and fixed principal upon maturity
although SSB has flexible withdrawl and no loss of principal during anytime of withdrawal
and since it is a small absolute amout of 1.5k, you should leave the money there in temasek bond for long and not touch it.