Swap SSB Examples

How to Read The Charts

The Swap SSB result shows 2 charts, Profit/Loss and Cumulative Profit/Loss. To evaluate whether it is profitable to swap SSB, you should focus on the Cumulative Profit/Loss chart. This page discusses about this chart only.

The X-axis represents time in future, and the Y-axis represents the profit or loss if you swap the SSBs. A positive value on the Y-axis indicates that you will receive more in interest after swapping while a negative value indicates that you will receive less in interest.

Depending on the existing SSB and the new one you are swapping, the chart can show various results (shapes). The results can be broadly categorized into:

  1. Good
  2. Bad
  3. Mixed

Good Results

The Y-axis shows positive values for the entire duration. This means that, no matter which time in future you choose to make an early redemption, the outcome is always positive (you earn more in interest). This example is one of the better ones, where the profit (additional interest earned) grows with time.

This result is still considered good, even though there is a period (B) where profit is reduced slightly (compared to period A). The bottom line is, there is strong profit throughout the entire duration.

This one is controversial. While there is profit to be made for the entire duration, profit is reduced in the later years. You need to ask yourself whether you will be happy with the profit you get at any particular time in future if you redeem early. Some people may not want to waste time on a small profit. Nonetheless, this is still a good result with positive outcome as there is not a single period where you will experience a loss.

Bad Results

This is clearly a bad result, as you will earn less in interest the entire duration. Furthermore, the longer you hold the SSB, the more you lose in interest.

This is also a bad result, just less bad (you lose less in interest compared to the previous example). It does not make sense to swap. Skip this and wait for a better yielding SSB.

Mixed Results

This chart shows a period with profit but also a period with loss. In this case, it is important to know what is your intended holding period. For example, if you are certain that you will make an early redemption at time A (as you need the money for a big ticket item), and you like the $66 profit, you can safely ignore what the chart shows after the intended redemption time A. However, if you do not know how long you will hold the SSB, it is better not to swap as there is a possibility of loss (receiving less in interest).

Not only this is a mixed result with possibilities of both profit and loss, the profit is also small (relative to the $10,000 investment amount). It might be better to skip this and wait for a better yielding SSB.