THE 10-year average return per year for the latest tranche of the Singapore Savings Bonds (SSB) has reached a new year-to-date high of 3.33 per cent, marking an increase from the preceding month’s rate of 3.06 per cent.

This was also a step closer to December 2022’s historic high of 3.47 per cent.

The May tranche of bonds, to be issued in June, has a first-year interest rate of 3.26 per cent. Interest rate at the 10-year mark stands at 3.54 per cent.

In comparison, the April issuance was offering a first-year interest rate of 2.99 per cent, while interest rate at the 10-year mark was 3.27 per cent.

The allotment size of the most recent issuance is S$1 billion, with investment amounts starting at S$500 and issued in multiples of S$500. Applications for the bonds will open at 6 pm on Thursday (May 2) and close at 9 pm on May 28. It will be allotted on May 29, and successful applications will be issued on Jun 3.

SSBs take their interest rates from the average yields of Singapore government bonds from the month before, but are subject to adjustments to ensure interest rates do not dip over time for inverted yield curves – where yields of short-term bonds become higher than those of long-term bonds.

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Average return at the 10-year mark has climbed for four straight months. It grew from 2.81 per cent in January’s tranche to 3.06 per cent in the issuance announced in April, before the new 2024 high in Thursday’s announcement.

The rise in yields comes as the US Federal Reserve potentially leaves interest rates higher for longer.

Fed chair Jerome Powell said that further rate hikes remain “unlikely”, and suggested that it may hold the benchmark policy rate until inflation is under control.