If you are paying attention to new issues of new Singapore Savings Bonds, you would have noticed that the 1st year rates of the issues are climbing higher. In fact, the latest issue's rate is the highest it has ever been.
If you are holding on to older issues, and view the SSB as a good place to stash away short term cash (perhaps 1 year holding period or so), you may want to consider redeeming your older issue and subscribing to the new issue.
Here is a table showing where the rates of the older issues are surpassed by the current issue's Year 1 rate of 1.72%.
For example, you can see that the current rate of 1.72% exceeds even the rate in year 3 of the October 2016 issue (1.28%), so it makes sense to take a look at redeeming that issue and subscribing to the new one.
Just for illustration:
If you had subscribed to the Oct 2016 issue, you are on the year 2 rate of 0.89%. Let's ignore the Year 2 rate and look forward to the Year 3 rate, since we are so close to October when the rate will go up.
If you had subscribed to 100,000 dollars of the Oct 2016 issue, you will receive 1,280, if you hold on for the whole of year 3.
If you subscribe to the latest issue, you will get 1,720. A difference of 440, or 436 if you take into account the redemption and subscription fee.
However, you may want to take note that the recent issues have been heavily over-subscribed.
Tenor Approximately 10 Years Maximum Amount Offered SGD 200,000,000
Total Amount Applied SGD 520,034,000
Total Application within Individual Allotment Limits SGD 510,587,000
Total Amount Allotted SGD 200,000,000 Issue
This Savings Bond was allotted using the Quantity Ceiling format. Applicants who applied for SGD 12,000 or lower were fully allotted, subject to the individual allotment limits. Applicants who applied for SGD 12,500 or higher were allotted either SGD 12,000 or SGD 12,500. Approximately 18.99% of these applicants were selected at random and allotted the additional SGD 500.
The June 2018 issue was over-subscribed by more than 1 time. As a result, you would probably have received only 12,000 if you had subscribed for SGD 12,000 (or higher) of that issue.
If you are considering redeeming the older issues and subscribing for the newer ones, you may want to redeem in small batches. A bad outcome would be if you redeemed 100,000 of an older issue but only received 10,000 of the newer issue.
None of the above should be construed as investment advice. Do your own due diligence
If you are holding on to older issues, and view the SSB as a good place to stash away short term cash (perhaps 1 year holding period or so), you may want to consider redeeming your older issue and subscribing to the new issue.
Here is a table showing where the rates of the older issues are surpassed by the current issue's Year 1 rate of 1.72%.
For example, you can see that the current rate of 1.72% exceeds even the rate in year 3 of the October 2016 issue (1.28%), so it makes sense to take a look at redeeming that issue and subscribing to the new one.
Just for illustration:
If you had subscribed to the Oct 2016 issue, you are on the year 2 rate of 0.89%. Let's ignore the Year 2 rate and look forward to the Year 3 rate, since we are so close to October when the rate will go up.
If you had subscribed to 100,000 dollars of the Oct 2016 issue, you will receive 1,280, if you hold on for the whole of year 3.
If you subscribe to the latest issue, you will get 1,720. A difference of 440, or 436 if you take into account the redemption and subscription fee.
However, you may want to take note that the recent issues have been heavily over-subscribed.
Tenor Approximately 10 Years Maximum Amount Offered SGD 200,000,000
Total Amount Applied SGD 520,034,000
Total Application within Individual Allotment Limits SGD 510,587,000
Total Amount Allotted SGD 200,000,000 Issue
This Savings Bond was allotted using the Quantity Ceiling format. Applicants who applied for SGD 12,000 or lower were fully allotted, subject to the individual allotment limits. Applicants who applied for SGD 12,500 or higher were allotted either SGD 12,000 or SGD 12,500. Approximately 18.99% of these applicants were selected at random and allotted the additional SGD 500.
The June 2018 issue was over-subscribed by more than 1 time. As a result, you would probably have received only 12,000 if you had subscribed for SGD 12,000 (or higher) of that issue.
If you are considering redeeming the older issues and subscribing for the newer ones, you may want to redeem in small batches. A bad outcome would be if you redeemed 100,000 of an older issue but only received 10,000 of the newer issue.
None of the above should be construed as investment advice. Do your own due diligence
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