PFF Panel 2
Singapore Saving Bonds (SSB)
Seedly PFF 2019
Asked on 02 Mar 2019
If you are looking to diversify your portfolio, i think it is good to have - it's relatively safe/guaranteed and low risks. But the current interest rate is simply too low, not worth it. You can get more money if you buy fixed deposits at some banks imo.
For rainy day / emergency funds, it still serves the purpose well - being guaranteed and relatively liquid. Otherwise, if you are looking for higher risk / returns, then it's not as attractive.
Honestly no, with the current interest rate of 1.7% (and this is the i/r over a 10 year period), banks are better in my opinion, unless you can't hit those conditions necessary to get the higher interests in the savings account.
Alternatively, if you are able to stomach some risk, then you can consider dividend stocks, REITs, ETFs among others. These usually offers around 4-5% p.a., but might have some capital risk involved in a market downturn.
Yes it is, SSB is really the safest investment products, so you can be sure your returns are almosted guaranteed. However, the con is that the returns are quite low at the moment. So do your own due dilligence before attempting any form of investing.
People like to overcomplicate the simple. And under-complicate the complex. Human nature. Largely why it is never mentioned much amongst the financial circles.
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It depends on your age, risk level and time frame.
SSB is the safest investment in Singapore because you will never lose money out of it.
Yes, the interest rates is low, but you will definitely be able to sleep at night. I usually encourage older people and risk adverse people to consider SSB as part of their portfolio.
For younger people who can take more risk and had a longer investment horizon, SSB can also be a small part of your portfolio while you invest the rest of your money.
Imo at the current coupon rate, SSBs are not worth it. I would rather put that money in a multiplier account to earn 2 over % interest on your own balance. Its zero risk too...
SG should offer inflation protected bonds like US' TIPS, that would be a more meaningful instrument for ppl who does not want to rely on CPF and yet have a low yielding investment.
Depends, at a time when fixed deposit rates were low, and some folks just didn't want any risky investments, it was a decent way to have cash keep up with inflation.
It is not a comparable to any investment with high risk high rewards, but it is a comforting ok return for no risk. Also depends when you buy, if you bought any of the SSBs in 2018, the 10 yr average yield is like between 2-2.5% which is really decent.
Personally, I do buy some, with a targeted focus to hedge against my property loan, and also to generate some interest income in mths of Jan / Apr / Jul / Oct which my portfolio is giving no dividends.
SSBs is backed by Singapore government hence it is much safer than other investments. The returns are lower than other investments though. If u dont wan to take too much risk, SSBs is definitely good.