Singapore Saving Bonds (SSBs)

Investment-grade bonds offer a good alternative to stocks especially for risk-adverse investors

(Image source: https://www.drwealth.com/2015/05/12/all-you-need-to-know-about-the-singapore-savings-bonds/)

Sharing some thoughts on the new government bonds, SSBs. I think the new SSBs being introduced are a good alternative to fixed deposits, especially since most fixed deposits last at most 3 years. The money invested can also be taken out in any given month, without loss of principal or accrued interest, which would definitely beat the fixed deposits where little to no interest is accrued if the money is withdrawn before the expiry date. 

With interest rates rising on current Singapore Government Securities, these would make attractive investment vehicles as these are backed by the Singapore government and offer higher interest rates than fixed deposits if held over longer periods of time. Who knows, these could possibly serve to replace some of the regular bank deposits as they can be easily withdrawn without a loss of accrued interest and would be a good place to store excess cash above a one to two month emergency fund. Only limit to this is the minimum $500 investment, maximum $100,000 investment as well as a cap of $50,000 for individual bond issues.

But then this also shows that we should proceed with caution when investing in other more risky assets such as stocks as high interest rates usually precede an economic recessions as they increase the cost of borrowing and reduce credit in the economy.

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