Investment Products Backed By The Singapore Government: SSB vs SGS Bond vs Treasury Bills
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Investment Products Backed By The Singapore Government: SSB vs SGS Bond vs Treasury Bills

profileMing Feng
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Everything Also Can Link to Singapore Government

“How can dis b allow???”

Introducing The Straits Times Comment Section Facebook page, where they hunt for “gems” in the comment section of Straits Times to showcase Singapore’s finest.

The page consists of Keyword Warriors with the ability to package every piece of news into “PAP’s fault”.

Here are some of our favourite examples:

Coronavirus stupid Singaporeans
Source: Facebook | STcomments
Fear and panic coronavirus, PM Lee Hsien Loong
Source: Facebook | STcomments

I give it to them. Some of these comments are really “WOKE”. Here’s a good one:

4G government
Source: Facebook | STcomments

 


AAA Credit Rating: Your Investments In The Singapore Government

Since we are already tying everything to our government, here’s a suggestion. Tie your investments with instruments, backed by the Singapore Government.

We typically jump at every opportunity to discredit our government, but for the longest time, one thing about Singapore’s Government withstood the test of time and the harsh comments of Keyboard Warriors.

Singaporeans hoard food and masks
Source: Facebook | SUTDmemes

Our Government ACED the credit rating like a boss from international credit agencies.

Rating AgencyLocal CurrencyForeign Currency
Moody'sAaaAaa
S&PAAAAAA
FitchAAAAAA
R&IAAAAAA

This means that Singapore Government Securities (SGS) is probably one of the safest possible investment instrument you can find in the world.

And if there is something Singaporeans like more than having a perfect score, it will be to make money.

Investing Singapore Government Securities is one way you can do so.


Singapore Savings Bond (SSB) vs Singapore Government Securities (SGS) Bond vs Treasury Bills

SSB vs SGS bonds vs Treasury bills (T-bills)

 Singapore Savings Bonds
(SSB)
SGS BondsTreasury Bills
What is it?Safe and flexible bond option for investorsTradable government debt securitiesShort-term tradable government debt securities.
How it works?Pays interest every 6 months.Pays a fixed couple every 6 months.Investors buy it at a discount. Upon maturity, investors will then receive the full face value of the bill.
Investment duration10 years2, 5, 10, 15, 20, 30 years6 months or 1 year
Minimum investmentS$500S$1,000S$1,000
Maximum limit per investorS$200,000No LimitNo Limit
FeesS$2S$2

(Waived if you apply through DBS internet banking)
S$2

(Waived if you apply through DBS internet banking)
Payment of interestOnce every 6 monthsOnce every 6 monthsNo interest
How is the price and rate determined?The interest rate is fixed and published by Monetary Authority of Singapore (MAS) every month.

The interest rate is announced before the application.

Determined by auctionDetermined by auction
How to apply?Apply through DBS/POSB, OCBC and UOB ATMs or internet bankingApply through DBS/POSB, OCBC and UOB ATMs or internet bankingApply through DBS/POSB, OCBC and UOB ATMs or internet banking
How to redeem?Redeem the full principal with accrued interest through Online Bank or ATM.

There will be no penalty for early withdrawal.
Return depends on market conditions when traded in the exchangeReturn depends on market conditions when traded in the exchange
Can we invest using our SRS account?Investors can invest through their respective SRS Operator's internet banking portal.Investors can invest through their respective SRS Operator's internet banking portal.Investors can invest through their respective SRS Operator's internet banking portal.
Can we invest using our CPF?NoCPFISCPFIS
TaxThere is no capital gains tax in Singapore

Most Singaporeans should be familiar with the Singapore Savings Bond (SSB).

The SSB is just one of the three types of Singapore Government Securities (SGS). There is also the SGS Bonds and Treasury Bills

These are all debt instruments backed by the Singapore Government and the good credit rating means that they are rather safe to invest in.

These instruments also allow you to buy and sell anytime in the market, indicating liquidity for your investment.


Singapore Savings BondSingapore Savings Bond (SSB)

The Singapore Savings Bond will be a suitable investment for investors looking to invest their money for up to 10 years. With interest that increases over time, long term investors can look to invest their savings over a long period of time to maximise the returns on the interest rate.

The interest rate of each month’s SSB is correlated to the long term Singapore Government Securities (SGS) yields. It uses the 1,2,5 and 10-years SGS yield as a benchmark for the returns on SSB.

Some of the benefits of the SSB include:

  • No penalty for early withdrawal
  • A way to diversify your investment portfolio
  • Fixed, steady income until the bond matures.
  • It is a safe, long-term investment product

Investors can invest in the SSB through:

  • DBS/POSB, OCBC and UOB ATMs or internet banking
  • Respective SRS Operator’s internet banking portal using their SRS account.

Singapore Government Securities (SGS) Bond

The Singapore Government Securities (SGS) bonds are issued by the Singapore Government. With maturities ranging from 2, 5, 10, 15, 20 or 30 years, the SGS bond pays a fixed coupon rate of interest. The interest rate of the SGS bond is given out every 6 months.

Do note that the price of SGS bond fluctuates. For investors looking for the option of getting their invested capital back in any given month, the Singapore Savings Bond (SSB) will be a better option.

Some of the benefits of the SGS bond include:

  • A way to diversify your investment portfolio
  • Fixed, steady income until the bond matures.
  • It is a safe, long-term investment product

Investors can invest in the SGS bond through:

  • DBS/POSB, OCBC and UOB ATMs or internet banking
  • Respective SRS Operator’s internet banking portal using their SRS account.
  • Invest with your CPFIS fund

Treasury Bills (T-bills)

Treasury bills (T-bills) have a different value proposition from the SSB and SGS bond. Both the SSB and SGS bond appeal to the investors with the interest rate that they are providing.

The T-bills have no coupon but are offered to the investors at a discount to the face value. Upon maturity, the investors will then receive the full face value of the bill as returns on the investment.

Some of the benefits of the SGS T-bills include:

  • A way to diversify your investment portfolio
  • Fixed, steady income until the bond matures.
  • It is a safe, long-term investment product

Investors can invest in the SGS bond through:

  • DBS/POSB, OCBC and UOB ATMs or internet banking
  • Respective SRS Operator’s internet banking portal using their SRS account.
  • Invest with your CPFIS fund

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About Ming Feng
A stint in Bloomberg gifted me with a beer belly, which only grew larger when I moved on to become a Professional Trader. Now I turn caffeine into digestible finance-related content.
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