Singapore Savings Bonds' 10-year average return hits new high of 1.79% for March issue

THE average return over 10 years for the March issue of the Singapore Savings Bonds (SSBs) has hit 1.79 per cent - its highest rate since 2019.

SSBs last recorded an average return over 10 years of 1.95 per cent per annum for its September 2019 issue.

The first-year interest rate for the March 2022 issue stands at 0.59 per cent, while the 10-year interest rate is 2.18 per cent.

The edging up of interest rates comes amid expectations of an interest rate hike in March by the Federal Reserve, in a bid to tame rising inflation. The US central bank is projected to raise the target interest rate by a quarter of a percentage point from the current near zero level.

Meanwhile, the Bank of England (BOE) lifted its interest rate for the second consecutive time on Thursday (Feb 3) to tackle decades-high inflation. This marks the first time that the BOE has done back-to-back hikes since 2004.

The maximum amount offered for the SSBs' upcoming March issue is S$150 million. Interest payment dates will be every 6 months on Mar 1 and Sep 1 until maturity.

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Last month, applications for February 2022's SSBs issue stood at around S$75.5 million.

The first-year interest rate was 0.52 per cent and the 10-year interest rate was also at 2.18 per cent. Meanwhile, the average return over 10 years was 1.64 per cent per annum.

Applications peaked at S$568 million in July 2018 and hit an all-time low of S$10.1 million in July 2020 amid a low-interest-rate environment.

The inaugural SSB edition was issued in October 2015. SSBs are backed by the Singapore government and were designed to offer individuals a long-term, flexible savings option with safe returns.

SSBs offered in any given month will pay a coupon that is linked to the daily average Singapore Government Securities yields as published by the Monetary Authority of Singapore in the previous month.

The latest SSB issue closes on Feb 23, 2022.