Fixed deposit and SSB interest rates have gone up even as the latest 6-month T-bill offers a lower yield.
Here’s the bad news – the cut-off yield on the latest 6-month T-bill fell to 3.75% from a recent high of 3.99% as demand continued to grow.
It’s not a surprise that many investors have been trying to get hold of the T-bill, especially as fixed deposit rates have been coming down in recent months.
Thankfully, we have started to see fixed deposit rates starting to rebound again, with the best 9-month fixed deposit rate now at 3.55% p.a.
With so many options, we explore the different ways you can earn a higher interest on your savings.
To help you find out the highest interest you can earn on your savings. we've improved our Interest Maximiser tool. Do check it out and let us know if it help you make a better financial decision.
📈 US BOND YIELDS SPIKE
Fitch Ratings downgraded the US credit rating to "AA+" from "AAA", citing long-term challenges facing the nation.
What does this mean?
With the downgrade to a “AA+” rating, Fitch no longer assigns the highest credit quality to the US.
US government bond yields spiked following the announcement, with the 10-year yield rising to its highest level this year of around 4.2% before closing the week at 4.05%.
However, looking back at 2011 when another credit rating agency S&P cut the US government’s credit rating, there was limited long-term impact as investors eventually returned to US assets and government debt yields declined by shortly after.
Why should I care?
Global stock markets fell sharply with the spike in US bond yields, with the tech-heavy Nasdaq falling by 2.8% in the week.
💡 THE BIG IMPORTANT STORY
The cut-off yield on the latest 6-month Singapore T-bill auction on 3 August fell further to 3.75%.
🚗 WHAT'S MOVING
- DBS reported a record net profit of S$2.69 billion in the second quarter, 48% higher compared to the previous year as its net interest margin (NIM) rose by 12 basis points compared to the previous quarter. DBS declared an interim dividend of 48 cents per share, bringing its total dividend in the first half of the year to 90 cents per share.
- OCBC reported a net profit of S$1.71 billion in the second quarter, 34% higher compared to the previous year. However, the bank’s net interest margin fell compared to the previous quarter as higher funding costs outpaced the rise in loan yields. OCBC declared an interim dividend of S$0.40, representing a payout ratio of 50%.
- CapitaLand Integrated Commercial Trust reported a distribution per unit (DPU) of 5.3 cents for the first half of 2023, 1.5% higher compared to the previous year. Higher net property income was driven by its recent acquisitions and asset enhance initiative at Raffles City Singapore, as well as increased rental income from most of its Singapore properties.
- CapitaLand Ascendas REIT reported a distribution per unit (DPU) of 7.719 cents for the first half of 2023, 2.0% lower compared to the previous year. The REIT achieved average rental reversion of 18% for leases renewed in the second quarter, but distributions were impacted by higher interest expense.
- Mapletree Pan Asia Commercial Trust reported a distribution per unit (DPU) of 2.18 cents for the first quarter of the current fiscal year, 12.8% lower compared to the previous year. While the portfolio achieved positive rental reversion of 2.4%, distributions were impacted by higher financing costs.
Source: Bloomberg, CNBC, Financial Times, Business Times, Edge Singapore
🤝 A MESSAGE FROM OUR PARTNER
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🤓 WHAT WE’RE LOOKING OUT FOR THIS WEEK
- Monday, 7 August: Lendlease Global Commercial REIT results
- Wednesday, 9 August: Singapore National Day public holiday, Walt Disney earnings
- Thursday, 10 August: Genting Singapore, City Development, Alibaba earnings
- Friday, 11 August: CapitaLand Investment, ST Engineering, Wilmar earnings
Source: Bloomberg, SGX
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