Dear readers, the April 23 Singapore Savings Bonds is now open for application. The application will close on 28 March 2023.
For what has been a lacklustre reception of the Singapore Savings Bonds recently: a number of recent tranches have not been fully subscribed, the April 23 Singapore Savings Bonds impress by bucking the downtrend of the average 10-year yield of the Singapore Savings Bonds at first glance as its average 10-year yield is 3.15%, finally over 3%! I must also admit that the 3.15% yield is surprising since I have predicted that the downtrend trend of the annual 10-year will persist so much so that I expect a 2.82% annual 10-year yield for the Mar 22 bond.
As a quick recap, the average 10-year yield of the Singapore Savings Bonds has been declining from December 2022. Specifically, the average-10-year yield of the bonds in Dec 22 at 3.47% went lower to 3.26% in Jan 23, then down again to 2.97% in Feb 23, and again declined to 2.90% for Mar 23 Singapore Savings bonds.
Comparing against the Feb 23 Singapore Savings bond’s annual 10-year yield, the Mar 23 tranche’s is higher by around 8%!
However, for more insights, we must look at the year-to-year yields of the Mar 23 Savings bond. For each year of the first six years, the bond pays an annual 3.01% yield, followed by 3.18%, 3.38%, 3.52% and 3.53%, respectively each year from the 7th year to the 10th year of the bond. From the aforementioned, we can see that the higher annual interest rate of the Apr 23 Singapore Savings Bonds is actually front-loaded on the tail end of the 10-year period of the bond. Successful applicants get 3.01% annual yield, just marginally above the average 2.9% 10-year yield in the Mar 23 Bonds, for the first consecutive 6 years!
Seen in the above light, is the Apr 23 Savings Bond really buck the (downward) trend or is still same same?