Asked by Anonymous

Should I put my money in SSB or fixed deposits?

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  • Richard Woon Tian Jun
    Richard Woon Tian Jun
    Top Contributor

    Top Contributor (Apr)

    Level 6. Master
    Answered on 03 Apr 2019

    Depends on the time horizon of your investment, but even then I am still leaning towards SSBs. SSBs have that unique level of liquidity not present within many of the other types of fixed income securities and savings accounts. SSBs in this month (May 2019 issuance) is starting at 1.95% per year, accelerating to 2.49% on the 10th year and having an average yield of 2.16%. The starting return already can kick most of the fixed deposit accounts provided by the local banks in Singapore to the curb, as they usually offer a 0.5% interest rate for a 6 months~ 24 months timespan. Not only that, the added advantage you can draw out your SSB principal almost any time after you put in, principal guaranteed, is a free insurance stamp of approval by one of the world's strongest governments in the debt repayment department. Can't get any better than that!

    SSBs website:

    http://www.sgs.gov.sg/savingsbonds/Your-SSB/This-months-bond.aspx

    Fixed Deposits scanner:

    https://www.imoney.sg/fixed-deposit

    Note: The Fixed deposits are per annum - meaning that the interest rate displayed is not the actual return you will get if you are getting a FD of less than 1 year. so always be careful of big numbers, they tend to be hiding something the more attractive it is! Example: CIMB FD account of 1.75% p.a for 6 months =/= 1.75% returns on investment!

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  • Zann Chua
    Zann Chua
    Level 6. Master
    Answered on 03 Apr 2019

    Hello!

    I personally feel that it would be better to put your money in SSB as compared to putting it in a fixed deposit since the rates of SSB are usually higher than fixed deposits.

    Besides the difference in the rates, another thing that you may want to consider would be the duration that it will take for you to withdraw your money. For fixed deposits, you can withdraw your money almost immediately, while for SSB it would usaully require about 7-30 days to withdraw the money. If not being able to withdraw the money immediately is something that you are not comfortable with then opting for fixed deposits would be better.

    Or another way would be to choose both where you can put your money into both fixed deposits as well as SSB. This way you will be able to have a form of diversification as well.

    Hope this helps!

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  • Jansen Ng
    Jansen Ng
    Level 4. Prodigy
    Answered on 03 Apr 2019

    SSB!

    Generally both are equally safe: SSB is backed by the govt, FD (depends on where) is backed by banks if u put in FD in banks

    Bur FD rates at this point is definitely lower than SSB rates (1.4-1.6%pa vs SSB with 1.95% on the 1st year) . Further, SSB allows u to take out without penalty and still receive ur coupons every 6months (if the money is not taken out). FD (also depending on the terms) may only pay at the end of the holding period.

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