Here’s what to expect for the 2-year SGS bond auction on 29 July

What happened?

Singapore bond yields have continued to rise over the past week.

Earlier, we shared on the new 20-year green SGS bond that was offering a 2.40% p.a. yield.

The cut-off yield for the 1-year Singapore T-bill (BY26102T) rose to 1.68% in the auction on 23 July. We also looked at what to expect from the upcoming 6-month Singapore T-bill auction on 30 July.

With more attention on bond yields, there were some members in the Beansprout community asking about the reopened 2-year SGS bond (N524100X).

In this article, I will look at look at the likely yield on the reopened 2-year SGS bond (N524100X), explain how a reopened auction works, and compare it with T-bills, fixed deposits and Singapore Savings Bonds.

What are the details of the 2-year SGS bond auction?

The re-opend 2-year SGS bond (N524100X) will be issued on 3 August 2026, and will mature on 1 April 2029.

This means an investor applying in July 2026 is not buying a new bond that matures two years from its issue date. The maturity date remains fixed at 1 April 2029.

The bond is categorised under the 2-year SGS auction schedule, but its actual remaining maturity from 3 August 2026 is about two years and eight months.

This distinction is important when considering how long the funds will be committed.

The bond offers a coupon rate of 3% p.a., and the coupon will be paid every six months, on 1 April and 1 October.

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What is a reopened SGS bond auction?

The latest auction is a reopened auction, where MAS issues more of an existing bond. This increases the total amount of that bond in circulation.

A reopened bond has the same issue code, coupon rate, coupon payment dates and maturity date as the existing bond.

The upcoming auction is the third issuance of N524100X.

N524100X was first issued on 1 April 2024 as a bond with an initial maturity of about five years.

At its original auction, the bond was issued with a coupon rate of 3% per year and a maturity date of 1 April 2029. The cut-off yield was 3.06%, with a cut-off price of S$99.724 for every S$100 in face value.

It was then reopened in May 2025, when the cut-off yield was at 2.05% and the cut-off yield was at S$103.989.

Why does the bond pay a 3% coupon if its yield may be around 1.9%?

The coupon rate is not necessarily the return an investor will earn.

The coupon determines the interest payment based on the face value of the bond.

For example, an investor allotted S$1,000 in principal would receive:

• S$30 in coupon payments each year
• S$15 every six months
• S$1,000 in principal when the bond matures

However, the final price paid for the bond will be decided at the auction.

Although the bond pays interest at a rate of 3% a year, investors may have to pay more than S$100 to receive S$100 back when the bond matures.

For example, N524100X closed at S$102.81 for every S$100 that will be repaid on 24 July 2026, before including any interest that had already built up.

An investor buying at this price would still receive the 3% interest payments. However, they would only receive S$100 back when the bond matures, despite paying S$102.81 for it.

This difference reduces the investor’s actual return.

After taking into account the interest received, the purchase price and the amount repaid at maturity, the return would be closer to 1.9% a year, rather than the stated interest rate of 3%.

We can see this in the bond’s earlier auctions as well.

When N524100X was first issued in March 2024, the cut-off yield was 3.06% a year. Investors paid slightly less than S$100, at S$99.724 for every S$100 that would eventually be repaid.

When the bond was offered again in May 2025, the cut-off yield  had fallen to 2.05%. Its price had risen to S$103.989 for every S$100 that would be repaid.

I would therefore focus on the auction yield rather than the coupon rate when comparing the bond with other options.

What is the likely yield on the reopened 2-year SGS bond?

The closing yield on the SGS bond being reopened, N524100X, was 1.92% on 24 July 2026.

The 1.92% yield is the more relevant indicator for the upcoming auction because it reflects the market yield on the exact bond being reopened.

Over the same period, the benchmark 2-year SGS bond, N523100W, closed at a yield of 1.82%.

It is worth noting that the upcoming re-opened bond N524100X has a longer remaining maturity than the benchmark 2-year bond, which matures on 1 August 2028.

In the previous 2-year SGS bond auction on 26 May 2026, the cut-off yield was 1.60%. This was close to the benchmark 2-year yield of 1.62% on the day before the auction.

Recent 2-year SGS bond auction yields have generally been close to prevailing market yields, although the eventual result will still depend on demand at the auction.

Buying the 2-year SGS bond: Better than the 6-month and 1-year T-bills?

The latest 6-month T-bill offered a cut-off yield of 1.55%, while the latest 1-year T-bill offered 1.68%.

Based on the latest closing yield of 1.92%, the 2-year SGS bond yield is:

• About 0.35 percentage points more than the latest 6-month T-bill
• About 0.20 percentage points more than the latest 1-year T-bill

Rather than applying for the reopened 2-year SGS bond, one option is to continue investing in shorter-term T-bills.

For example, we could invest in the upcoming 6-month T-bill auction on 30 July 2026. The T-bill will be issued on 4 August 2026 and mature on 2 February 2027.

We could then reinvest the funds in another T-bill based on the prevailing interest rates at that time.

Alternatively, we could invest in a 1-year T-bill and reassess our options when it matures.

However, the reopened SGS bond will mature only on 1 April 2029. To keep our funds invested over a similar period using 6-month or 1-year T-bills, we would need to reinvest the proceeds several times.

This gives us more flexibility, but it also introduces reinvestment risk.

If interest rates fall, the yields available on future T-bill tranches may be lower. On the other hand, if interest rates remain elevated or rise, reinvesting in shorter-term T-bills may allow us to earn a higher return later.

It has also become less certain whether interest rates will be cut further, remain unchanged or potentially rise over the coming months.

The reopened SGS bond provides greater certainty by allowing investors to secure the auction yield until April 2029, provided the bond is held to maturity.

However, the additional yield may be relatively modest compared with the latest 6-month and 1-year T-bill yields.

I would therefore weigh the certainty of fixing the SGS bond yield for longer against the flexibility of reinvesting in shorter-term T-bills.

You can also find out how to construct a T-bill and SSB bond ladder to spread out your maturity dates and reduce the need to reinvest all your funds at the same time.

Buying the 2-year SGS bond using cash: Better than a fixed deposit?

Some Singapore banks have raised their fixed deposit rates in July. Currently, the best 1-year fixed deposit rate we found is at 1.60% p.a. 

This is lower than the 1.92% closing yield on N524100X as of 24 July 2026.

The SGS bond may offer a higher yield for investors who are comfortable with the longer commitment.

A shorter fixed deposit may provide greater flexibility to reassess the available rates when it matures.

Buying the 2-year SGS bond: Better than Singapore Savings Bonds?

The latest Singapore Savings Bond offers:

• A first-year return of 1.46%
• An average return of 1.60% per year over two years
• An average return of 1.67% per year over three years
• An average return of 2.06% per year over 10 years

Based on these rates, the reopened 2-year SGS bond may offer a slightly higher return over a similar holding period if its cut-off yield is around 1.9%.

However, the Singapore Savings Bond provides more flexibility.

SSBs can be redeemed in any month, with investors receiving their principal amount and accrued interest.

In comparison, the SGS bond does not provide monthly redemption at face value.

An investor who wants to exit before April 2029 would have to sell the SGS bond in the secondary market. The price received may be higher or lower than the amount paid.

Therefore, the SGS bond may offer a higher yield, while the SSB may be more relevant for cash that could be needed earlier.

Apart from offering a 1-year return of 1.46%, the latest SSB also allows us to lock-in a rate of 2.06% over 10 years, while having the flexibility to redeem prior to maturity. 

What are the risks of the 2-year SGS bond?

#1 – Potential losses if sold before maturity

The main risk is that investors may incur a loss if they sell the SGS bond before it matures on 1 April 2029.

The market price of an SGS bond moves as interest rates change. If market yields rise after the auction, the price of the bond may fall.

In this case, an investor who needs to sell the bond before maturity may receive a price that is lower than the price paid at the auction.

This is especially important because investors are currently expected to pay above the bond’s face value, as its 3% coupon rate is higher than prevailing market yields.

For example, if an investor pays more than S$100 for every S$100 in principal and later sells the bond below that purchase price, the investor may suffer a capital loss.

#2 – Liquidity risk

There may also be limited liquidity in the secondary market if an investor decides to sell the bond before maturity.

If there are few interested buyers, investors may not be able to sell the bond immediately or at their desired price.

This could increase the risk of receiving less than the purchase price, especially if the funds are needed urgently.

Investors who want to reduce the risk of a capital loss should therefore be prepared to hold the SGS bond until it matures in April 2029.

What would Beansprout do?

Based on the latest closing yield on N524100X, the reopened SGS bond may offer a cut-off yield of around 1.9%.

However, the eventual cut-off yield may be eventually depend on market movements and the bids submitted at the auction.

Based on the yield of 1.9%, the reopened 2-year SGS bond may offer a higher yield than the latest 6-month and 1-year T-bills.

However, I would consider the SGS bond for cash that I am comfortable setting aside until it matures in April 2029 within my Liquidity Pot. 

This is because there is liquidity risk, and I may suffer potential losses if I decide to sell the bond before maturity. 

If I may need the funds earlier, I would consider the 6-month T-bill or the 1-year T-bill instead.  Find out what yield to expect from the upcoming 6-month T-bill auction on 30 July 2026 here.

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If flexibility is more important, I may consider the Singapore Savings Bond, which can be redeemed in any month without having to sell it at the prevailing market price.

I compare savings accounts, fixed deposits, T-bills, SSBs and money market fund to find the best places to park your cash in July 2026 here.

For my Income Pot, an expected yield of around 1.8% would be below my benchmark for generating passive income over the longer term.

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How do I apply for the 2-year SGS bond?

The 2-year Singapore Government Securities (SGS) bond auction is currently open.

The auction will take place on 29 July 2026.

As cash applications for the 2-year Singapore Government Securities (SGS) bond close one business day before the auction date, we would need to put in our cash applications by 9pm on 28 July 

Applications for the Singapore bonds using CPF-OA will close 1-2 business days before the auction date, and the dates differ across the three local banks.

• Applications for Singapore bonds online using CPF OA via DBS close at 9pm on 28 July (Tuesday). Read our step-by-step guide to applying via DBS.
• Application for Singapore bonds online using CPF OA via OCBC close at 9pm on 28 July (Tuesday) Read our step-by-step guide to applying via OCBC
• Applications for Singapore bonds online using CPF OA via UOB close at 9pm on 27 July (Monday) Read our step-by-step guide to applying via UOB.

If you prefer a shorter investment period and are comfortable holding your investment until maturity, you may consider Singapore T-bills. Read our guide to SGS bonds and T-bills to learn how they work and how to apply.

If you value the flexibility to redeem your investment in any month without being exposed to market price movements, you may consider Singapore Savings Bonds instead. Read our SSB guide to know more. 

Not sure whether to make a competitive or non-competitive bid? Learn how competitive bids work and how to decide on your minimum acceptable yield here.

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