Singapore Saving Bonds (SSB)
Asked 2w ago
In terms of current rates, Singlife (non-guranteed 2.5%) edges over SSB (June - 1.05%). With a large investment capital, directly comparing between these two, SSB has 1.05% returns whereas for Singlife, the returns decreases and plateau to an asymptote of 1%. For smaller sum investments ($500 or so), Singlife would be a better choice since there is a fee of $2 for the application of SSBs and that would be a cost to investment even before getting returns.
There is certainty with the return on investment for SSB which can be better for planning since the returns are guaranteed for the next 10 years whereas for Singlife, the rates can change anytime.
In terms of credit risk, SSB definitely wins over Singlife since the savings bond is backed by the Government (as compared to an company). Deposits in Singlife account are insured under SDIC so that will not be of a concern.
Liquidity wise, Singlife account operates like a digital bank account and the processing for withdrawal and deposits is quick as compared to SSB which usually requires a few working days.
For re-investments, SSBs requires another application ($2) and processing whereas for Singlife, you can just deposit your capital.
I wouldn't say there is a beter of the two, it depends on your objective.
This is my opinion. Given the low interest rate environment, Singlife is better than SSB hands down. Looking at the returns alone, SSB is 0.8% p.a on average for the next 10 years while Singlife is 2.5% p.a for the first $10k. I believe that Singlife is able to fulfil that 2.5% p.a in the coming months. I do not have concrete evidence on what they use our funds, similar to banks where they use our deposits to loan out, Singlife should be using the funds to invest for better returns. For now, CSO told me that their intention is to pay 2.5% p.a for the first $10k for the first year.
Both SSB and Singlife are capital guaranteed. With SSB guaranteed by the government because we are lending money to the government while Singlife is guaranteed with SDIC which is supported by the government.
Liquidity wise, Singlife is better as you get to withdraw your funds almost immediate. On the other hand, SSB you only get your funds on the following month (month + 1).