Singapore Savings Bond coupon rates for 1st-year at 2.6%; 10-year average at 2.75%

THE 10-year average return for the October issue of the Singapore Savings Bond (SSB) that opened on Thursday (Sep 1) is 2.75 per cent while the first-year interest rate is at 2.6 per cent - both lower than September’s issue.

This is despite the first-year interest rate that the SSB should draw from is higher: the 1-year Singapore Treasury bill (T-bill) for August averaged 2.83 per cent. That on the 10-year government bond averaged 2.75 per cent.

The SSB coupon rates for each issuance are determined such that the average annual compounded return over an investor’s holding period is linked to the yield of a Singapore government bond of a corresponding tenor in the previous month – subject to adjustments. But the government had said adjustments won’t affect the return on the SSB if it is held for the full 10 years.