Tradable bonds issued by the Singapore government that pay a fixed coupon twice a year and return the principal at maturity, with tenures ranging from a few years to several decades. Backed by the Singapore government, they carry effectively no credit risk, though their market price moves with interest rates if sold before maturity.
Example: An investor wanting a long, predictable income stream might buy a 10-year SGS bond and hold it to maturity, collecting fixed coupons throughout.
An SGS bond is a longer-tenor debt security issued and fully backed by the Singapore Government, with maturities ranging from 2 to 30 years. It pays a fixed coupon twice a year and returns the face value at maturity, making it one of the lowest-risk ways to earn a steady income.
T-bills are short-term (6-month or 1-year) and are sold at a discount with no coupons — your return is the gap between purchase price and face value. SGS bonds run for years and instead pay regular semi-annual interest, suiting investors who want predictable cash flow over time.
SGS bonds are issued through MAS auctions and can be bought with cash via DBS/POSB, OCBC or UOB internet banking, or through a CDP-linked brokerage; cash and SRS holdings are also possible. You can also buy or sell them on the secondary market before maturity, where the price moves with interest rates.
They carry very low credit risk because they are backed by the Singapore Government, which holds a AAA credit rating. The main risk is interest-rate risk: if you sell before maturity when rates have risen, the bond's market price may be below what you paid.