Can Malaysians buy Singapore Saving Bond (SSB)?

“Money grows on the tree of persistence.” – Japanese Proverb

As a long term investor, I am very particular about asset allocation. Besides putting my money in EPF ( KWSP) voluntarily monthly to maximize to MYR100k per year, I also invest in USD denominated ETFs/bonds and SGD-denominated Singapore stocks and bonds.

I don’t put my money in STI index because of its dismay performances for years. Singapore REITs and bank stocks have been my favourite. My SGD denominated portfolio also include bonds ETFs such as NikkoAM ABF Singapore bond index fund, the total expense ratio is about 0.24%. Even though I am getting dividend yearly from ABF Singapore bond index fund, the share price has been on a downward trend for almost 3 years!

Singapore Saving Bond

For non Singaporeans, I might need to explain a bit what Singapore Saving bond is. Singapore Savings Bonds (SSBs) are a type of Singapore Government Securities that are issued for investors who want to participate in the Singapore Government Securities (SGS) market but in smaller denominations. Basically these bonds are issued by the Singapore government. The best part is, even though it is a 10-year bond, you can redeem SSBs in any month for the face value of the bond plus accrued interest.

Therefore it combines flexibility and security and since it is guaranteed by the Singapore government, I am confident it is safe as well.

The Bond Yield

For the last trance of SSBs issued in November 2023, the yield is more than 3.2% for 10 years!

The below table shows the SSBs yield for the last 12 months and you will notice that it was oversubscribed for 1.2x in Nov 2023.

Source : The Turtle Investor

Since SSB is flexible and secure, plus they yield is very attractive for the last 2-3 months, a lot of Singaporeans have been talking about it recently.

And for your information, the latest SSB yield for December 2023 will be 3.4%! You have to apply by 27 November 2023.

A Few Facts to know about SSBs

There are a few interesting facts to know about SSB. Firstly, the interest will be paid every 6 monthly until full maturity or full redemption.

The maximum amount you can invest is SGD200k and the minimum is SGD500. You need to understand that you will not see compound interest in SSB since the interest is paid out to you half yearly.

The best part about SSBs as I said earlier is that you can redeem them earlier before maturity ( 10 years) within a month for the face value plus accrued interest.

Total amount allotted for November 2023 SSBs was SGD 1 billion.

Last but not least, foreigners including Malaysians can apply for SSBs!

How do Malaysians apply for SSBs?

Before I talk about how to apply for SSBs for Malaysians, you can check Savings Bonds issuance calendar HERE. For each SSBs, the application timeline is as below,

Opening date i.e. application starts : First business day of the month, 6pm
Closing date i.e. application ends : Fourth last business day of the month, 9pm
Refund of unsuccessful application : Second last business day of the month.

You need to have a SGX CDP ( central depository account) account and a Singapore bank account if you want to apply for SSBs. Basically a SGX CDP account is like a CDS ( central depository system) account in Malaysia. You can apply a CDP account HERE! In Malaysia, you can have many CDS accounts but in Singapore, you only can have one CDP account even though you use different brokerage firms. The problem is, it is getting more difficult to open a SGX CDP or a Singapore bank account if you do not work there! ( If you do not have an employment pass!)

Basically, you need to have a Singapore account (Citibank, DBS/POSB, HSBC, Maybank, OCBC, SCB or UOB- Remember CIMB/RHB is not in the list. ) before applying a SGX CDP account.

You can learn how to open a SGX CDP account HERE!

A Step-by-Step Application Process

Since I have a DBS account in Singapore, I just log in to my DBS account and go to INVEST segment. You can see there is a subsegment of ‘ Singapore Government Securities, SGS’

After that, you can see there are three types of SGS for me to invest in, Singapore Saving Bonds (SSB), Singapore Government Securities (SGS) Bonds and Treasury bills ( T-bills).

If I click on the SSB segment, I will be able to see the further details about the bond available as shown below,

As you can see, the tenor of the bond is 10 years and the issue date will be 1 Dec 2023. If I click on the apply button, I will be able to buy the bond in multiples of SGD 500 ( minimal amount is SGD 500 and the maximum amount is SGD 200k). The application fee is only SGD 2 . I will know my application result by checking my SGX CDP account on 1 December 2023.

Conclusion

As I mentioned in my previous post, my MYR-denominated portfolio mainly consists of my EPF and a few banks stocks/ Malaysian REITs that I am still holding, since I also invest in SGD-denominated stocks, diversifying myself into bonds especially SSBs might be a good move in long term.

Anyway, my main portfolio is still my USD-denominated ETFs that I add money regularly every month rain or shine. I still hope I can retire or at least partially retire from my full time job by 2025.

Even though it has been rough and volatile for the last few months for my USD ETFs and Singapore REITs, I am still consistently adding money into my portfolio whenever I have extra cash in my pocket. Remember, market volatility is just noise, you need to control your emotion in investing! Ignore the market noise and stay the course, you will be rewarded eventually.