Moneytalk: What is SGS ?

Bangulzai SG

This post is part of a series of posts that discuss about SGS in detail. To access the other posts in this series, click here.

As compared to SGS treasury bills and bonds, fixed deposits is the more widely known product that is known to carry very little or no risk. This is because most of us are aware that the Singapore Goverment currently guarantees the money that you deposit at the bank up to a certain amount. However, not many people know about SGS. SGS has some distinct advantages which makes it a superior form of investment over fixed deposits in its class that is suitable for conservative investors.

Bangulzai SG

This post is part of a series of posts that discuss about the SGS in detail. To access the other posts in this series, click here.

How should one go about in buying SGS treasury bills or bonds ? For this post, I will cover on how one can buy SGS treasury bills and bonds through banks in the primary market.

charlize SG

Me no financial expert.

But with inflation starting to hit the global economy, the Fed and the rest of the central banks will likely start increasing interest rates soon.

Bond prices will likely start falling.

Should we be buying bonds now?

youyayu SG

i throw in 200k for 1 year

i can get 208000?

Bangulzai SG

if u mean the article's sgs bonds, probably ok even for cautious people

lianamaster SG

Sounds quite chimm for me...

CashBench SG

It's great that Bangulzai has written this series on SGS bonds. They are almost risk-free, but it's also important to understand what exactly are the remaining risks that investors should know about.

One important aspect to consider, for example, is the potential for the SGS bond's price to change as time passes or when interest rates move up (as pointed out by Charlize). This means that selling the SGS bond before it "matures" will expose you to some risk. "Matures" refers to the date where the Singapore government is obliged to return the original investment back to you based on the "face value" of the bond. Before maturing, the government would also have paid you interest every 6 months for "borrowing" money from you.

Agree with Lianamaster that some of the SGS bond terms can be chim. Over at CashBench, there is a two-part series on SGS Bonds that will cover all the important aspects & terms that you need to know before investing. You can then decide if it's an appropriate investment for yourself. Links as follows: