Singapore Government Bonds: SSB vs. SGS vs. T-Bills (2024)

Singapore

With the recent increase in interest rates, government bonds have become one of the favorite investments among investors. We break down the different Singapore government bonds so you can decide which suits your portfolio best.

Singapore Savings Bonds (SSB)

SSB is a special type of Singapore Government Securities issued and backed by the Singapore government. SSB has a tenor of 10 years, with the interest rate increasing yearly. Like a regular bond, investing in SSB guarantees your initial principal and the interest payout.

The unique feature of SSB is its flexibility to redeem at any month^[1] without penalty. You even receive the accrued interest upon withdrawal. ^[1]You will receive the requested amount and the accrued interest by the second business day of the following month.

SSB has a low minimum investment of $500, but it has a maximum total investment cap of $200,000 per individual.

A new Savings Bond will be issued monthly according to the issuance calendar provided by MAS.

Key features of SSB

	Low Risk Fully backed by the Singapore Government with an AAA credit rating. Your initial principal and interest are guaranteed.
	Long-term Invest for up to 10 years with interest that increases over time. Interest rates for the whole ten years are locked in at the start.
	Liquid You can exit your investment in any given month with no penalties. You even receive the accrued interest.

To get the latest SSB offering, check the MAS page here. If you are interested in applying for SSB, you can follow our step-by-step guide on how to buy SSB. To redeem, we also have a step-by-step guide on how to redeem SSB.

SGS Bonds

Medium to long-term Singapore government bonds issued and backed by the Singapore government, which has the highest credit rating of AAA given by major rating agencies. SGS Bonds pay a fixed interest rate and have maturities between 2 to 50 years.

There are three categories of SGD Bonds:

• SGS Market Development (To develop the domestic debt market)
• SGS Infrastructure (To finance major, long-term infrastructure)
• Green SGS Infrastructure (To finance major, long-term green infrastructure projects)

SGS Bonds have fixed maturity dates, meaning investors cannot redeem before maturity. There is liquidity risk here. Investors can still trade these bonds on the secondary market but are subject to fluctuations in market pricing. When interest rate rises, it usually negatively impacts bond prices and vice versa. Investors may incur losses when selling before maturity. It is generally recommended that retail investors hold these SGS Bonds until maturity to receive the guaranteed principal and interest.

SGS Bonds are offered monthly following the issuance calendar.

You can find the latest SGS Bonds from the MAS website here.

T-Bills

T-Bills are short-term 6-month or 1-year government securities issued and backed by the Singapore government. Singapore government has the highest AAA credit rating assigned by major rating agencies. Your principal and interest are guaranteed.

When buying T-Bills, investors pay a discount to the face value of the bills and, at maturity, receive the full face value of the bills. The discount is the investors’ profit.

For investors who want to park their cash in the short term, T-Bills is an ideal place as they provide a competitive return with a low-risk profile. Investors are also eligible to use their CPF to invest in T-Bills. Recently, the T-Bills rate has been much higher than the CPF-OA rate; thus, the viability of CPF investment into T-Bills.

T-Bills have a fixed maturity date, meaning investors lock their capital for the whole duration. There is no early redemption option. T-Bills are tradeable in the secondary market but are subject to market price fluctuation. You risk losing your initial capital if you sell early in the secondary market.

You can check the MAS page here to get the latest T-Bills offering. If you are interested in applying for T-bills, you can follow our step-by-step guide on how to buy T-bills.

Summary of the Singapore Government Bonds

What are the disadvantages?

As safe as it sounds, the Singapore Government Bonds typically have similar drawbacks as the other fixed-income investments. The main disadvantage of these investments is that they usually do not beat inflation over the long term. You can read our article about fixed-income investments to learn how they may fit into your portfolio.

That said, at the time of this writing, the interest rate for these instruments has been one of the highest in recent years.