Dear readers, fancy a 2.55% interest rate per annum on your savings? Well, this is definitely an attractive rate given the more modest interest rates from the local banks currently.
This 2.55% interest rate is real but there is a caveat. The caveat is that you will need to first wait for 9 years first and holding your monies during these 9 years before enjoying this 2.55% interest rate. However, during the first nine years of holding your monies, you can still earn some profits.
What am I talking about?
Well, I am referring to the Oct 2021 Singapore Savings Bonds which offers the following interest rates in each of the years you hold your monies:
Year 1: 0.35%
Year 2: 0.37%
Year 3: 0.71%
Year 4: 1.13%
Year 5: 1.42%
Year 6: 1.58%
Year 7: 1.80%
Year 8: 2.03%
Year 9: 2.27%
Year 10: 2.55%
So, as you can see, you are earning some interests over the 10-year holding period for the Oct 2021 Singapore Savings Bonds, with higher interests of over 2% from Year 8 on. However, investors should note that the average annual interest rate for holding out the full tenure of the savings bonds is just 1.39%.
I have invested in the Singapore Savings Bonds during the early tranches where the overall average annual interest was as good as 2.1%, just to let some of my spare cash grow while waiting for a good stock markets opportunity.
I am not recommending anyone to invest in Singapore Savings Bonds these days as the annual average interest are not attractive anymore.
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