Asked on 30 Dec 2018
If you'd like to make full use of SSB, park your funds for the full 10 years. Then along the way, should you need the money or find other better alternatives which offers higher returns, you can redeem the funds earlier without any penalty
It is a 10 year bond. Best if you can hold it for 10 years for the incremental interest rate every year. Of course there is flexibility to withdraw anytime so this makes it one of the best savings instruments.
Relatively low risk aside from the government collapsing and Singapore going into depression.
Singapore Savings Bond is a 10 year bond that pays coupon which step up every year.
Its effective rate of interest or IRR is at 2.43% for the latest batch.
Its liquidity is about 1 month. Many people put in 3 months of emergency funds into it.
For parking of your money, it depends on what is the use of the money. It is best suited as a secondary fund which requires liquidity (hence people put half of their emergency funds in.
If you are a risk averse person, then yes SSB is a good place to park your money. If you want to get the maximum amount of interest of of it, you should park your money there for the full 10 years.
SSB is good for low risk investors since principal and interests are guaranteed. You should keep it there till maturation (10 years).