SSB 10-year return at 2.97%. Better than T-bills and fixed deposits?

What happened?

This month, we saw the yield on the 6-month Singapore T-bill fall to 2.9%. 

The best fixed deposit rate has also fallen to 2.8%.

Hence, many investors who are looking to park their cash noticed in our comparison that the current issuance of the SSB offers a 10-year average interest rate of 2.97%, above the T-bill yield and fixed deposit rate.

Before applying, many investors in the Beansprout community often ask us if the projected interest rate for next month’s SSB will be higher. 

Knowing what the projected SSB interest rate is may then allow us to decide if we should apply for the current SSB or wait for the next one. 

As such, I decided to take a look at the latest SSB interest rate projection to see where the interest rate might be heading for the next SSB. 

Why it might be worthwhile applying for the latest Singapore Savings Bonds (SSBs)

#1 – Current SSB offers 10-year average interest rate of 2.97%

The current issuance of the SSB offers a fairly attractive interest rate.

If you hold on to the SSB for 1 year, you will receive an average return of 2.83%.

If you hold on to the SSB for 10 years, you will receive an average return of 2.97% per year.

The 10-year average return of 2.97% is significantly higher than the rate of 2.82% offered by the previous SSB. 

It is also higher than the best 3-month, 6-month and 1-year fixed deposit rate in Singapore as banks have cut their interest in February. 

#2 – SSB interest rate projected to fall to about 2.87%

If you are new to the SSB, what you would need to know is that SSB interest rates are linked to the yields of Singapore Government Securities (SGS). 

Like T-bills, SGS are also bonds issued by the Singapore government. However, they have a longer maturity of 2 years to 30 years. 

The interest rates on the SSB are linked to the daily average SGS yields as published by MAS in the previous month.

As an investor in the SSB, your average annual compounded return over any period (eg 10 years) should broadly correspond to the SGS yield of the same holding period (eg 10 year SGS) with a one-month lag.

In other words, the average 10-year return on the next SSB would largely correspond to the yield on the 10-year Singapore government bond or SGS this month.

As seen in the chart below, the 10-year Singapore government bond yield is lower in February than in January. The decline could be due to a flight to safety and towards government bonds, following the escalation in tariff war in the month during February. 

As of 20 Feb 2025, the closing yield on the 10-year Singapore government bond yield was around 2.88%.

This is below the 10-year average return offered by the current SSB. 

Taking the average yield in the month of Feb, this may mean that the 10-year average return for the next SSB may be lower than the current one.

Based on our SSB interest rate projection as of 21 Feb 2025, the average return over 10 years for the next SSB may be at 2.87%.

This is calculated using the average of the closing yield of the 10-year government bond so far in Feb, and assuming that the yield will remain at 2.88% for the remaining working days of the month. 

#3 – Demand for SSB may increase from previous issuance

With the lower interest rate offered by the recent SSBs, demand has been low in the February issuance of the SSB.

There were S$237 million of applications for the SSB in the previous issuance which offered a 10-year average return of 2.82%.

There will be S$500 millon of Singapore Savings Bonds (SSBs) issued this time.

If demand were to increase significantly from last month, investors may not be able to get full allocation of the SSBs. 

What would Beansprout do? 

The latest issuance of the SSB offers a 10-year average return of 2.97%, higher than the return offered by the previous SSB. 

In addition, the 10-year average return on the next SSB is projected to fall to about 2.87%, as the 10-year Singapore government bond yield has declined in February.

As such, it might be more worthwhile to apply for the current SSB rather than to wait for the next one. 

Apart from offering a higher 10-year average return compared to the 6-month Singapore T-bill yield and best fixed deposit rate, the latest SSB also allows us to lock-in a rate of close to 3% over 10 years, while having the flexibility to redeem prior to maturity. 

It might also be worthwhile swapping previous issuances of SSB with the upcoming SSB to earn a potentially higher interest, given the fall in the projected rate for the next SSB. To find out how much more interest you can potentially earning by doing so, check out our SSB swap calculator.

Check out our swap calculator to find out if it may be worthwhile to be doing so. 

If you are looking for the best place to park your savings, we compare SSBs to T-bills and fixed deposits to find out how to allow our spare cash to work harder. 

Applications for the latest SSB close at 9pm on 25 Feb (Tuesday). Redemptions of SSBs will also close at 9pm on 25 Feb (Tuesday).

You can sign up for a email reminder to be reminded of future SSB closing dates.

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Learn more about SSBs and how to apply for SSBs using our comprehensive SSB guide. 

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