Dear readers, in the Federal Reserves meeting that was concluded earlier this week, the Federal Reserves held interest rates steady. This move has been interpreted by many economists as the conclusion of the central bank’s rate hiking cycle and set the stage for rate cuts in the year ahead.
In recent years, in tandem with increasing interest rates, the interest rates of T-bills, Singapore Savings Bonds and Money Market Funds have also increased, making these vehicles of investment popular choices for investors and savers to grow their monies, especially since these platforms are also relatively low-risk. I believe some investors have also flocked from the equities markets to the fixed deposits markets, for the attractive dividends yields.
Currently, the Singapore Savings Bonds are offering 3% per annum on average for a holding period of 10 years (in fact, 3.07% for the latest Jan 2024 Singapore Savings Bonds). Savers who are looking to grow their monies over a long horizon should consider Jan 2024 Singapore Savings Bonds given the posture from the recent Federal Reserves meeting: high interest rates may soon be a thing of the past! I am not surprised at all if the Singapore Savings Bonds from Feb 24 on will have less than 3% per annum average interest rates for a 10-year holding period in line with the potential cut in interest rates from US Federal Reserves.
Hence, savers and investors should make hay while the sun shines: secure longer interest rates to grow our monies while high interest rates are still here!
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