Hi! I’m a university student working part time, and I have about $5k I have access to. I consider these my emergency funds, but is it advisable to keep these in SSB rather than a regular bank account? - Seedly

Singapore Saving Bonds (SSB)

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Asked by Anonymous

Asked on 04 Apr 2019

Hi! I’m a university student working part time, and I have about $5k I have access to. I consider these my emergency funds, but is it advisable to keep these in SSB rather than a regular bank account?

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Richard Woon Tian Jun
Richard Woon Tian Jun
Level 6. Master
Answered on 04 Apr 2019

Have to agree with the replies here - An emergency fund is something that you should be able to withdraw almost immediately, and though SSBs do have really good liquidity relative to fixed income instruments, they still do have a lag time of at least the next month. So if you need the 5k now, and you want to redeem your 5k worth of SSBs, your redemption will only be credited into your account by the end of second business day of the following month. Meaning you at least have to wait for about a week or so earliest before you get your money - which doesn't exactly fulfill the "emergency" requirement.

So I would also advise putting it into a high interest savings account, at least protecting you against some percentage of inflation at least.

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Adele
Level 1. Freshie
Answered on 04 Apr 2019

If it is emergency funds, a higher interest bank account is recommended. If you do not have income that meets the criteria of savings accounts where salary credit comes with conditions (e.g. Mon crediting amount, min balance, UOB ONE, DBS Multiplier and OCBC 360), then consider CIMB's 1%p.a. account.

You'll only get your SSB funds by the second business day of the following month (of the month you've applied to redeem your funds), so SSB is pretty illiquid to be emergency funds.

Especially since you're a student and might want to save for short to medium term goals such as exchange.

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Zann Chua
Zann Chua
Level 6. Master
Answered on 04 Apr 2019

Hello!

I personally would keep the $5k in a regular bank account since it is an emergency fund. Keeping it in a regular bank account would ensure that you will be able to use it when you need it since it can be withdrawn immediately. While on the other hand, SSB would require 7-30 days for the money to be able to be withdrawn.

I would put my savings that i have saved from part time work into SSB instead of putting my emergency funds into SSB.

hope this helps!

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