After I got to know about SSBs, I have got some new perspectives and thoughts… And regrets.
My greatest regret: Not getting the Jan 2019 issue where the average 10 year yield was close to 2.5%.
Learning: Create a separate savings goal for SSBs. If I see a 10 year average yield above 2.2%, I am rather tempted to take some of it. Even just as a small hedge against my property loan interest.
Overall goals and management strategy in future:
Still saving / allocating 1000 per mth for SSBs as I overinvested from my emergency funds last year
Using SSBs as a way to stash emergency $$ elsewhere so I would not be tempted to touch it
Void / space left from transferring to SSBs leave room for warchest accumulation in 360 acct at better rates than FD
Initial thoughts to purchase SSBs in Jan / Jul purchase, reason being that this pair was estimated with the least passive income paid into my bank accounts. This would help to smooth the overall income-expense difference. Long term wise I would still prefer for such passive interest to smooth out vs the net cashflows
With my new perspective, I think it makes sense to split SSB purchase slightly to just use the SSBs average yield as a hedge to property loan interest expense. Maybe not 100% to point 4 but maybe a 70/30 split?
With downgrade of maybank saveup account, changing to dbs multiplier and using 6mths ssb bond ladder to get the additional interest under ‘invest’ category
just a thought, if your ssb investment is 1k per month, the difference between 2% and 2.5 yield is only $5 per year. Don’t regret/worry too much over it
Ya actually my worry is the property loan interest exp. I almost died of shock after learning my interest expense increased by 20% over the few interest rate hikes. Its not the yield improvement I am focusing on but more like trying to match and narrow down the diff between interest income vs expense over time
Park partial of my emergency fund in SSB due to the higher interest rate than SG FD. And it will prevent me from using it.
Am trying to build a bond ladder for DBS Multiplier , working on saving up first as my plan is to save up at least 5k for each SSB. Then at least 2mth worth in cash so that in the event that I need to redeem my SSB, there is still some cash on hand while waiting for redemption.
Yar walktheworld. I have the same thoughts. 2-3 mth emergency cash in bank account at minimum (enough to tahan till SSB redemption happens). SSB the balance to improve overall yield.
Now OCBC 360 is offering 3.2% on the balance of 36-70k (first 35k @ 1.8%)… Overall I think ocbc simplified my life and thought process…
If Balance > 70k and month of 1/4/7/10 do SSB of average mthly expense. Then if SSB 10 yr average yield > 2%, for every 0.1% above 2%, I will add another 1k.
This is a guideline I think I can follow through for myself.
For me is because I needed a bank account which pays interest to park my cash.
Preciously I was using ocbc but I have changed jobs and now my new job does not transfer salary in giro. So just plug the excess cash in ssb for less headache.
In the recent months, I noticed a drop in the Interest Rate for SSBs… hence I wonder if it still a better options to park more of the Emergency Funds there. At the moment, I am not buying any more SSBs looking at the declining interest rates.
It depends on your purpose. I agree the interest rates are declining, but I also dont really see the SSB meant to be a means of good returns (I think govt was stirring up competition for the banks).
For me, its something to think about, but one other reason I wanted to stash $$ in the SSB is to park my emergency funds in a place that I wont be tempted to “withdraw” and buy toys or stocks…
