Save Money in Singapore Savings Bonds or CPF?

The Singapore Savings Bond (SSB)
It is a special Singapore Government bond, issued by the Singapore Government and sold to the public as a form of savings.
Introduced as another form of investment and savings plan for people living in Singapore

The Singapore Central Provident Fund (CPF)
It is a compulsory savings plan for all Singaporeans and PR living and working in Singapore.
A portion of an individual's monthly income is channelled into their respective CPF accounts for different purpose; for buying a house, for retirement and for medical expenses,

Differences between CPF & SSB

Differences	CPF	SSB
Withdrawal	No Each year, you can only contribute to your CPF at max $37,740 - inclusive of both your compulsory contribution and your voluntary contribution.	Yes You will get back the money next month
Contribution/ Investment Limit	Yes Each year, you can only contribute to your CPF at max $37,740 - inclusive of both your compulsory contribution and your voluntary contribution.	Yes You can buy at max $50,000 worth of bonds each month.
Holding Limit	No You can save as much money as you like in your CPF.	Yes You can at max own $100,000 worth of bonds in total
Interest Rates	Up to 3.5% on your Ordinary Account Up to 5% on your Special, Medisave & Retirement Accounts (SMRA) Up to 6% on your SMRA if you are above 55 years old Interest rates are fixed	Less than 1% in your first year Increases every year Reaches 3+% in the 10th year Interest rates depend on market conditions.
Interest	Compounding	Non-Compounding
Returns	Beats Inflation With inflation on average of about 3% per year compounding, CPF's SMRA account provides higher interest rates than inflation, meaning you do not lose your purchasing power over time	Probably will not beat Inflation With an interest of 2+% per year over the long-term, it is less likely for SSB to beat inflation rates. You are likely to maintain purchasing power or lose a little to inflation
Purpose	Save for long-term Save for Retirement Save for medical expenses Save for home payments	Save for short-term Save for an expense that will occur in a few months or years time, like wedding, or home down payment

Recommended Post: How to Save Money Each Month – 76 Easy Things You Can Do Right Now

Similarities between CPF & SSB

Similarities	CPF	SSB
Guaranteed Principal	By the Singapore Government, one of the remaining few AAA-rated countries. Confirm can repay you back the money you put/save with them
Guaranteed Interest	By the Singapore Government, one of the remaining few AAA-rated countries. Confirm can repay you back the interest you have earned
Ownership	It is your money, whether in CPF or in the Bonds, the money is still yours
Risk Level	Low Risk, or No Risk By the Singapore Government, one of the remaining few AAA-rated countries. Confirm can repay you back the money you put/save/earn with them

Conclusion:
If you want to save for the long-term, go with CPF. It pays a higher interest over the long-term and ensures that your itching hands will not be able to squander it away.
But if you are just looking for a place to save before spending it (say on your home down payment), then save with SSB, it is less risker and provides a good enough interest to ensure you do not lose too much to inflation!

Recommended Post: How CPF Provide 5 Insurance to You

Remember to offer your opinions. If you don't put your two cents in, how can you expect to get change?

Have a feedback? Tell us now! 

Subscribe to us or 
Follow us: Investment Stab on Facebook