Positioning For SSB: Go For Sep 2024, The Last 3% Issue? | Turtle Investor – The Global Tofay

The closing date for the current issue of Singapore Savings Bonds (Sep 2024) is 27 August 2024 at 9 p.m.

We have exactly one day from the closing date, and I thought this might be a timely read if you are still deciding whether to invest in this issue of SSB.

Looking at the returns, it isn’t particularly attractive compared to the previous issues such as June 2024 (3.33%), July 2024 (3.30%) and August 2024 (3.22%).

However, it is worth noting that a three per cent guaranteed yield for ten years for an extremely safe place for semi-liquid emergency funds is still rather appealing.

Are you planning to go for this issue?

Rate Cuts Are (Really) Coming

The U.S. jobless rate rose to 4.3 percent in July and is currently at its highest level since late 2021.

The Federal Reserve is finally putting rate cuts on the table, with the possibility of more aggressive easing to prevent a severe downturn.

By now, the genie is probably out of the bottle and we will likely be getting either a 0.25% or a 0.50% cut in September 2024.

Nobody knows what will happen, but it is possible that a series of interest rate cuts could continue all the way into the end of 2025.

The Black Monday of 2024 saw unprecedented fear in the market, and interest rates traders expected 3 cuts totalling 1.25% by December 2024.

Sub-3% Returns Is Back In Play For October 2024

From what was already announced and and what we can see from existing data, the October 2024 issue of Singapore Savings Bonds will likely see a yield of less than than 3%.

This is because the golden rule is that an SSB issue’s return which shall always equal the ten-year reference yield if held to maturity.

market watch

If you are like me and think that agar-agar is good enough (since we are not at the end of the month yet), the above chart will suffice.

The lowest point for the month so far was seen on 5 August 2024 (of course, the dreadful day) at 2.69%

You can also rely on tools such as Beansprout, or I Love SSB if you prefer the latest up-to-date projections.

Investing By Closing Date (27 August 2024)

If you wish to park your money in what could be your last chance to lock in 3% yield, you will have to take action by the 27 August 2024.

What Is The Likelihood Of Hitting Allocation Ceiling?

There have been quite a few months of SSBs with good returns, and fatigue has set it.

Looking at the past issues, it appears that the appetite for SSBs is not longer there.

In fact, one could have max-ed out your individual allocation of $200,000 in a single issue if you have the money.

Nevertheless, I don’t think the allocation ceiling will be exceedingly low, and you should be able to get a good allocation.

Then Why I Am Not Doing Nothing For This Issue?

I have already invested my money into all six issues of the highest-yielding SSBs, which was my primary motivation when I started monitoring and writing about SSBs in the first place.

Now that I have already achieved my goal, it is more of a habit to keep writing, and a curiosity to see how SSBs would react to the global interest rates.

Summary

As the September 2024 Singapore Savings Bonds issue approaches its closing date, investors face a crucial decision in a changing interest rate environment.

While this issue might not offer the highest returns we’ve seen, it could be the last chance to secure a 3% yield for the next decade. Here are three key takeaways:

1. Last 3% Opportunity: The September 2024 SSB issue, offering a 3% yield, might be the final chance to lock in this rate before potential sub-3% returns in upcoming issues due to expected interest rate cuts.
2. Timing is Critical: With the closing date of August 27, 2024, investors need to act quickly if they want to participate in this issue, balancing the desire for higher yields against the risk of missing out.
3. Allocation Likely Achievable: Despite previous high-yield issues, current investor fatigue suggests that those interested in this SSB issue are likely to receive their desired allocation without hitting ceiling limits.

Singapore Savings Bonds That I’m Holding

Below are the Singapore Savings Bonds (see historical rates) that I have allocated my funds to lock in zero-risk 3% yield for ten years.

Lock In Attractive Returns With SSBs

Singapore Savings Bonds (SSBs) are safe and flexible bonds for individual investors that allows us to enjoy returns that increase over time and redeem in any month without penalty.

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If you are interested in tracking your portfolio (including Singapore Savings Bonds) with a high-quality tool that is super affordable, I am using StocksCafe by Evan (click here to learn more).

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Kevin started Turtle Investor when his net worth languished at negative $25,755. His desire to turn things around led him to build passive income from investments and side hustles that pay for his daily expenses and vacations. You can learn more about Kevin here.