​As we have mentioned many times, interest essentially is the cost of borrowing money. ​

Sometimes when we take up loans, we pay interests. Sometimes when companies want to borrow money, they issue bonds. And bondholders earn interests.

For ​individuals who try to earn interests​, Singapore Saving Bond has been the go to instrument. However in recent times its 1st year interest rates has dropped below that of fixed deposits. 

The Feburary issue of SSB has very disappointing interest rates.

Source: ​​Singapore Government Securities​​​

​On the other hand, while Fixed Deposits provide marginally higher interest rates, the have many restrictions/risks in place:

1) The minimum deposit amount may be out of reach for some.

2) Has a lock in time period usually 1 year; and there is penalty for early withdrawals.

​3) After the lock in time period, individuals have to source for another place to deposit money for another year.

​Source: MoneySmart

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