Average 10-year yield on Singapore savings bonds rose to 2.81%

Interest rates on the latest Singapore Savings Bond (SSB) issue rose after the November tranche posted returns plummet to a record low for 2024.

The latest tranche, which opened for applications on Friday (November 1) and will be released in December, offers a first-year interest rate of 2.66 percent and a 10-year average yield of 2.81 percent.

This 10-year average return of 2.81% is the highest since the September release.

Interest rates on Singapore government-backed bonds have fallen over the last two tranches. In the November issue, the yield fell to 2.56%. It received bids worth S$99.6 million for the proposed S$600 million.

The latest issue is offered at S$600 million and closes on 26 November. It will be posted on November 27; successful applications will be issued on December 2.

SSBs take their interest rates from the average yield of Singapore government bonds in the month before. But they are subject to adjustments to ensure that interest rates do not fall over time when the yield curve inverts—that is, when short-term bill yields exceed long-term bond yields.

BT in your mailbox

Start and end each day with the latest news and analysis delivered straight to your inbox.

The government can make adjustments to ensure that yields do not fall before the SSB matures. so that provide investors with returns that compound over their holding period.

The latest tranche of SSB comes ahead of the US Federal Open Market Committee meeting next week.

In September, the Federal Reserve planned a 50 basis point rate cut as part of its two remaining rate decisions this year, proposing either another large cut or two smaller cuts of 25 basis points each.

All economists surveyed in a recent Reuters poll expect the Fed to cut its key interest rate by 25 basis points at its upcoming meeting, with more than 90 percent predicting the same move in December.