Asked by Linda Tan

Should I invest in SSBs? Their returns seem so low?

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  • Hariz Arthur Maloy
    Hariz Arthur Maloy, Independent Financial Advisor at Promiseland Independent
    Top Contributor

    Top Contributor (Apr)

    Level 7. Grand Master
    Answered on 01 Apr 2019

    Low risk, low returns.

    There isn't another product in the market that gives a higher return for the same risk taken as the SSB.

    You should ask if you would like them in your overall portfolio instead of looking at them individually.

    Markets up or down, you'll still get your coupons and your capital at the end of 10 years.

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    • Linda Tan
      I see! thanks again for the answer Hariz. Do you know if there are other bonds that I can compare SSBs with?
      01 Apr 2019
    • Hariz Arthur Maloy
      US Treasuries. But then you take on currency risk. You can also try investment grade quasi sovereign bonds, like Temasek.
      01 Apr 2019
  • Gibson Junxun
    Gibson Junxun
    Level 3. Wonderkid
    Answered on 01 Apr 2019

    It’ll depend on what is your end goal to your investments, if you’re looking at hedgling against inflation, then SSBs is probably one of the best ways to hedge against inflation.

    However do note that bonds in general is like lending people money for a period of time and you get compensated with regular interest rate. It’s is not something that will grow over time like businesses or REITS or ETFs. It’s like a coupon that allows you to claim your money back after a period of time.

    if you’re looking to grow your money, then setting aside a small portion of your money into bonds so that you have your back covered then you can proceed to grow your money with the other investment instruments out there.

    Wishing you a wonderful investing journey ahead!

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    • Linda Tan
      Thank you for your well wishes, and for the analysis of SSBs
      03 Apr 2019
  • Ernest Yeam Wee Leong
    Ernest Yeam Wee Leong
    Level 4. Prodigy
    Answered on 01 Apr 2019

    You can invest in the SSBs if you are looking for a safe investment.

    as the saying goes, low risk, low returns.

    If you are looking to get higher returns, then investment into stocks and alternative investments is what you should go for. do note that these comes with higher risk and should be do with due dilligence.

    if you are keen to read more about company reviews and finance, do check out my blog at http://justbeingernest.blogspot.com/

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  • Josh Tan Jian Liang
    Josh Tan Jian Liang, Co-founder https://theastuteparent.com at Promiseland Independent Pte Ltd
    Level 3. Wonderkid
    Answered on 01 Apr 2019

    Hi Linda,

    I've this simple formula on the SSB which is a WAG formula.

    W - withdrawal: No lock in period

    A - anyone : Anyone with the right accounts can buy

    G - guaranteed: Principal and interest guaranteed.

    If you understand it, you'd realise SSB is a unique solution for savings and getting interest without risk. My full video on it is here.

    The T2023-S$ 5-year Temasek Bond and Astrea IV bond are closer comparison to the SSB. All other retail bonds listed on the market (like the SIA retail bond) may carry a better yield but are not principal guaranteed by the government.

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