Fresh Takes


Can't get enough SSBs? Time to look at SGS Bonds (Aug 2022)

04 Aug 2022

Can't get enough of the Singapore Savings Bond (SSB)? It's time to look at the Singapore Government Securities (SGS) bonds.

Guide to SGS Bonds – Unlocking Singapore’s best kept secret!


  • Singapore Government Securities (SGS) bonds and T-bills are fully backed by the Singapore government, and offer you a sound way to earn a regular interest payment.
  • SGS bonds have a maturity of 2 to 30 years, while T-bills have a shorter maturity of 6 or 12 months. 
  • The yield of the 6 month T-bill rose to 2.93% in July, after the US Federal Reserve hiked interest rates aggressively. 
  • Compared to the SSB, investors of SGS bonds may face less flexibility transacting on the SSBs after issuance. As such, investors should take note of interest rate risks or be prepared to hold the SGS bonds/T-bills till maturity.

What happened?

After our recent article on Singapore Savings Bonds, one of the most common questions we received was why not invest in Singapore Government Securities (SGS) bonds instead?

By now, you might be abit confused by the many different types of bonds. There’s Astrea bonds, there’s Singapore Savings Bonds (SSB). And now, we have to learn about SGS Bonds.

But trust me, this is definitely worth your time. 

In the uncertain environment that we are in now, many of you are probably looking for sound assets to invest in. 

Of course, it will be even better if it comes with a decent yield with the sky-high inflation we are facing. 

The SGS bonds might be able to fulfil these two criteria. 

Read on to find out more about:

  1. What are SGS Bonds and T-Bills?
  2. Why should I care about SGS Bonds and T-Bills?
  3. What are the risks of buying SGS Bonds and T-Bills?
  4. Should I buy SGS Bonds and T-bills with CPF?
  5. How do I buy SGS bonds and T-bills?

What are SGS Bonds and T-bills

Like the Singapore Savings Bonds, SGS Bonds and T-bills are fully backed by the Singapore Government.

They offer a sound way for you to diversify your investment portfolios, while earning a regular interest payment. 

Graphical user interface, application, Teams

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Source: MAS

SGS Bonds have a maturity of 2 to 30 years, and pay a fixed coupon every 6 months.

T-bills have a shorter maturity of 6-months or 1 year.

Essentially, to decide between a SGS bond and a T-bill, you just need to think about whether you would want to hold on this bond for a short period of time (6 months/1 year), or for a longer period of time. 

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Source: MAS

Why should I care about SGS bonds and T-bills?

While everyone has been focusing on the attractive yields for the Singapore Savings Bonds, the yields on the SGS Bonds and T-bills have been going up too.

This is not a surprise, since the coupon for each SSB issuance is linked to long-term SGS yields. 

But what we really want to focus on here are the short-term yields on the Treasury bills.

Here, the yield on the 6 month government bond has reached 2.93% recently. 

It has risen sharply due to Fed hiking interest rates aggressively to fight inflation. 

Singapore 6-month bond yield
Source: Tradingview

What are the risks of buying SGS bonds and T-bills?

All investments come with risks, even for the SGS bonds and T-bills.

#1 - Less flexibility compared to SSBs

Like any other bonds, the SGS is subject to interest rate risks. This means that when interest rates go up, the price of the bond may come down. Hence, you might suffer capital losses if you were to sell the bond before its maturity date. 

If liquidity is important to you, this is something you will need to be aware of before buying the SGS bonds. 

This is where the T-bills might come in handy, as they have a shorter maturity period compared to the SGS bonds. 

As a result, you are committing to a shorter period of 6 months or 1 year, where hopefully the likelihood of you having to sell the bond is also lower. 

If you want the flexibility of redeeming your investment in any given month, do consider the Singapore Savings Bonds as an alternative.

#2 - Less easy to buy and sell after issuance

After you have been issued the SGS/T-bill, it may not be easy to buy or sell them in the secondary market before they mature. 

You will have to visit the main branches of the banks (DBS, OCBC or UOB), and indicate whether you are using cash, SRS or CPF Investment Scheme (CPFIS) funds.

Thereafter, the bank will provide you with a quote on the T-bill. 

So while it is doable, it will not be as straightforward as pressing a button on your ibanking app!

#3 - No certainty on expected yield at the point of subscription. 

It is worth noting that there are allotment limits for competitive and non-competitive bids at each auction.

Most bids by individual investors are put through the non-competitive bids. Corporates and professional fund managers are more likely to put up a competitive bid. 

Looking at the last auction for the 6-month T-bill on 21 July, there was a total of S$190 million of non-competitive bids put in. 

All the non-competitive bids were allotted the 6-month T-bill at a yield of 2.92%. 

However, if you were subscribing to the T-bill, you would not know what is the yield you are getting at the point of subscription. 

It is eventually determined based on demand and supply at the auction. If there is sudden spike in demand for the T-bill, then you might be getting a lower yield. 

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Source: MAS

The other thing to note here is that T-bills do not have coupon payments; instead, they are issued to you at a purchase price that is below the face value of the bond. Therefore, the yield that you get at maturity is the difference between the purchase price and the face value.

Sounds complicated? Here's how it works.

Using the 1-year T-bill as an example, it has a face value of S$100. This is the amount of money you will receive for holding the bond till maturity, which in this case is 1 year.

If you pay $98 for purchasing the bond, your yield for holding on to the bond for one year can then be calculated as (S$100-S$98) / 98 x 100 = 2.04%.

In other words, you would have earned a return of 2.04%, having paid S$98 upfront, and receiving S$100 in one year's time.

Should I buy SGS Bonds and T-bills with my CPF?

The prevailing CPF interest rates is still higher than the yield on T-bill. As such, there is little reason to buy T-bills using CPFIS unless interest rates go up much further.

However, the latest yield on the 10-year SGS bond is close to 2.6% (as of 3 August), which is slightly above the CPF OA rate of 2.5%. Hence, it might make more sense to consider using your CPFIS to invest in the 10-year SGS bond. 

Also, do note that the use of CPFIS funds for investing in SGS is subject to CPF investment guidelines.

You can invest your OA savings after setting aside $20,000 in your OA. And you can invest your SA savings after setting aside $40,000 in your SA.

How do I buy SGS bonds and T-bills?

These are the upcoming key dates you need to know. You may check the full schedule of upcoming auction here.

IssuanceAuction Date
6-month T-bill4 August 2022
6-month T-bill18 August 2022
5-year SGS bond29 August 2022

What you will need for cash application: You can apply through DBS/POSB, OCBC and UOB ATMs and internet banking portal. You will also need an individual CDP account with Direct Crediting Services activated . This allows coupon and principal payments to be credited directly into your bank account.

What you will need for SRS application: You  can apply through the internet banking portal of your SRS Operator (DBS/POSB, OCBC, or UOB).

What you will need for CPFIS Application: You will need to submit an application in person at the main branch of your respective CPF Investment Scheme (CPFIS) agent bank (DBS/POSB, OCBC, or UOB). For CPFIS-OA investments, you will need a CPF Investment Account with one of the three CPFIS agent banks (DBS/POSB, OCBC, and UOB). There is no need to open any CPF Investment Account if you wish to invest CPFIS-SA funds.

Applications through ATMs and internet banking may close 1 to 2 business days before the auction, as your bank will need to process the application before the auction closes. Do check with your bank for the exact cut-off time for the different application channels.

The minimum bid amount for SGS bonds and T-bills is S$1,000. So you need to start by deciding how much you want to invest, in multiples of S$1,000.

For new SGS/T-bill issues, the full bid amount will be deducted from your account at the point of application. So do make sure you have sufficient funds in the account you are using to apply. 

If your bid is unsuccessful, the money will be refunded into the account used to make the application. The refund will be shown in your account 1-2 business days after the auction day.

How do I know if my subscription is successful?

After an auction closes, you can check the aggregate results of the auction about an hour later on the issuance calendar.

The SGS bonds or T-bills are issued 3 business days after the results are announced.

If your bid is successful, the securities will be reflected in your respective accounts after the issuance date. 

  • For cash applications: You can check your CDP statement
  • For SRS application: You can check the statements from your SRS Operator (DBS/POSB, OCBC and UOB are SRS operators)
  • For CPFIS-OA application: You can check the CPFIS statement sent by your agent bank (DBS/POSB, OCBC and UOB are CPFIS agent banks)
  • For CPFIS-SA application: You can check your CPF statement