Dear readers, I expect the application of August 2023 Singapore Savings Bonds (SSB) or SBAug23 to be opened next week.
So, what will be the average annual 10-year interest of the Aug 23 Singapore Savings Bonds?
As a recap, let us take a look at the average annual 10-year return of the Singapore Savings Bonds this year including up to the previous Jul 23 SSB tranche:
Jan-23 3.26% per annum
Feb-23 2.97% per annum
Mar-23 2.90% per annum
Apr-23 3.15% per annum
May-23 3.07% per annum
Jun-23 2.81% per annum
Jul-23: 2.82% per annum
From the above data, we can note that from Apr 23 onward, the annual 10-year return of the Singapore Savings Bonds has started to trend down and this is in line with the decreasing trend of the fixed deposit interest rates from banks too. The annual 10-year return of the Singapore Savings Bonds has seem to stabilise at around 2.80% per annum given that the annual interest rates of Jun 23 and Jul 23 seem to converge around this point.
But, as I have noticed recently, the fixed deposit interest offered by banks seem to have a noteworthy move. The fixed deposit interest rates of two largest Singapore banks have gone below the 3% per annum interest rate and I believe this is what many savers will term as the psychological level for fixed deposit interests from banks. Both OCBC and UOB are currently offering 2.70% per annum each for their fixed deposit promotions.
If two of Singapore’s largest banks are offering fixed deposit interest at 2.70% per annum, I believe it is a matter of time, before the smaller banks offer fixed deposit interest rates below 3% per annum too. With 2.70% per annum as the shorter-term interest rates offered by the largest banks here, I believe the longer-term interest rates, i.e. the annual 10-year interest rates of Singapore Savings Bonds should come down below 2.70% per annum.
I would give 2.60% per annum as the average annual 10-year return of August 2023 Singapore Savings Bonds. I heard the Jul 23 Singapore Savings Bonds is under-subscribed but I believe savers can either “take it or leave it” if the Aug 23 Singapore Savings Bonds do go lower, because we must understand overall interest rates may even go lower in time to come.