Fixed deposits losing their allure as yields spike on Singapore Savings Bonds

Article by The Business Times
1 July 2022

Rising interest rates make fixed-income products more enticing than they have been in years. But although rates on some fixed deposit products have nearly doubled in the last two months, the yields from Singapore Savings Bonds (SSBs) are proving hard to resist. The July 2022 tranche of SSBs saw applications worth S$1.3 billion. Applications for the tranche, with an average return of 2.7 per cent if held for 10 years, closed on 27 June. A total of S$600 million was allotted. Applications for the August tranche are widely expected to yield even more and also receive more applications. The rush into SSBs comes despite sharply increased rates in recent months for fixed deposits. Banks in Singapore have raised promotional rates for fixed deposits across various tenures by between 0.1 and 1.1 percentage points since the end of April, according to The Business Times’ poll of 7 banks here.

CEO/CIO Chuin Ting’s comment on SSBs offering flexibility as they are redeemable at the end of each month without any penalties is mentioned. She is also quoted on how other products have “lock-in periods” and that the extra interest, if any, from a fixed deposit or insurance product above the SSB of the same tenure is incremental and may not be worth the lock-in. The article is both online and in print. 

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