In the past, investing in Singapore Government Securities (SGS), otherwise known as Singapore Government Bonds or T-bills, require either a trip to a local bank for buying new issues, or transacting through a secondary dealer (eg a stock broker) for buying or selling of Government Bonds that were already in the market.

SGS are the safest products around as your capital is only at risk if the Singapore Government defaults. These debt instruments require a minimum investment of just $1000 and can be bought using both cash and CPF.

However, take note that if you sell them before maturity, you might get back more or less than your initial capital. This is because the price of bonds has an inverse relationship to the movement of interest rates. When interest rates goes down, the price of bonds goes up, and vice versa. The longer the duration of the bond, the greater this effect will be. Read more…