Reasons to Invest in OCBC Bonds in Singapore
There are four different types of SSBs available from OCBC Bonds in Singapore currently; so do not fret if you are unsure which one to pick due to lack of experience.
Introduction:
When deciding where to invest, Singaporeans have a lot of options. There are the blue chips listed on the Singapore Exchange (SGX), which continue to produce good dividends every year, the real estate market in Singapore offers property investors reliable 8-10% returns on their investments annually. There are also bonds listed on the SGX, which though currently flailing around in an ocean of global yields at multi-year lows, can still produce healthy returns for investors willing to take on the risks involved.
It is common knowledge that savings accounts offered by Singapore banks do not even outpace inflation; which means you’re guaranteed to lose money in the long run. Possibly the only safe investment left for Singaporeans is government-issued bonds which are protected by statutory reserve backing; due to Singapore’s status as a first-world financial center and the fact that it is one of just fifteen countries in the world with a AAA sovereign credit rating from Standard & Poor.
Singapore Savings Bonds (SSB):
The good news is that banks such as OCBC are currently offering Singapore Savings Bonds (SSB) with attractive yields. This is because the bank itself can borrow money at rock bottom rates due to its excellent credit rating; which allows it to purchase SSBs in bulk and offer attractive returns to investors looking for a risk-averse investment option. An added advantage of investing in SSBs is that there are no taxes on any interest or capital gains earned.
On top of that, SSBs are liquid; meaning investors can withdraw their money anytime they want with just 1 week’s notice. This makes it an excellent option for Singaporeans looking to park their savings for a short period; while waiting for the right investment opportunities to come along.
In addition, investing in SSBs is not complicated at all. There’s no need for Singaporeans to be familiar with the stock market or even do any research on different investment products because that’s what OCBC and other licensed financial institutions are here for. All you need to do is conduct a simple risk assessment based on your age; liquidity requirements, financial goals, and investment horizons.
How to invest in SSBs?
Once you have completed your assessment, it’s simply a matter of choosing an appropriate account to invest in. There are four different types of SSBs available from OCBC Bonds in Singapore currently; so do not fret if you are unsure which one to pick due to lack of experience or knowledge in this area because the bank will be more than happy to assist you.
Please note that majority of the time, SSBs are issued by Singapore Savings Bond Corporation Limited (SSBC); which is wholly owned by OCBC itself, but this isn’t always true. For instance, during disinflationary periods when interest rates are dropping rapidly in the country; banks such as DBS and UOB can still come out with their own SSBs.
Conclusion:
Regardless, all Singapore Savings Bonds offered in Singapore are backed by the full faith and credit of the government of Singapore via statutory reserve backing, which means that your money is safe from bankruptcy or insolvency. This means that even if your bank goes down, you can still withdraw your money with just 1 week’s notice; without having to risk the loss of some or all of your money.
