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?
- 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 has risen to close to 2%, 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.