What are Singapore Government Securities (SGS)?
SGS are debt instruments issued by the Singapore Government that take the form of either Treasury bills (T-bills) or bonds. They are considered safe investments, as they are backed by the full faith and credit of the Singapore Government. The terms of issuance for T-bills and bonds are governed by the Local Treasury Bills Act and the Government Securities Act respectively.
The Singapore Government is obliged to pay the holders of SGS a fixed sum of money on the maturity date of the securities. SGS cannot be redeemed before their maturity dates, but investors can always sell them in the SGS market. A group of banks, known as the SGS Primary Dealers, are prepared to buy and sell SGS at any time during normal market trading hours.
As the fiscal agent of the Government, MAS acts to undertake the issue and management of SGS on its behalf.
You can visit the SGS website or download the SGS brochure to learn more.
Investors earn returns when they receive interest and if the price of the bonds they own gain in value. If you buy a bond at 100% of the principal value and hold the bond until maturity, your return is equal to the interest you receive. If you buy a bond at more or less than the principal value, your return is based on the interest you receive plus any capital gain or loss from holding the bond (i.e. the difference between the price you paid and the price you sold the bond). A bond’s return is usually called its yield.
Interest rates of Singapore Savings Bonds are calculated from the average 1-year, 2-year, 5-year and 10-year SGS yields. SGS yields are published daily on the SGS website under "Daily SGS Prices".