English
Interest rates on latest Singapore Savings Bonds rise again; 10-year average return at 3.15%
INTEREST rates on the latest issuance of Singapore Savings Bonds (SSBs), which opened on Wednesday (Mar 1), have risen again, following a series of declines in recent months.
The April tranche of SSBs, which are backed by the Singapore government, is offering a first-year interest rate of 3.01 per cent, and a 10-year average return of 3.15 per cent. A month earlier, the March issuance opened with a first-year interest rate of 2.76 per cent, and a 10-year average return of 2.9 per cent.
Coupon rates of SSBs rose alongside rising interest rates in 2022. They peaked during December 2022’s tranche, which offered a record high first-year interest rate of 3.26 per cent and an average 10-year return of 3.47 per cent.
But interest in SSBs has been on a decline, as yields have fallen in recent months. The March issuance was less than half subscribed, and received just S$261.1 million in applications out of the S$600 million offered.
The April issuance has some S$700 million on offer. The offer will close on Mar 28 and be allotted on Mar 29. Successful applications will be issued on Apr 3.
SSBs take their interest rates from the average yields of Singapore government bonds from the month before. They are, however, subject to adjustments to ensure that interest rates do not dip over time for inverted yield curves, in which the yields of short-dated bills exceed those of longer-dated bonds.
Source: https://www.businesstimes.com.sg/companies-markets/interest-rates-latest-singapore-savings-bonds-rise-again-10-year-average-return