What Are SINGA Bonds (SGS Bonds) And Should You Invest In Them?

Alevin Chan
Last updated Sep 22, 2022
are sgs bonds worth investing in?

How are Singapore Government Securities (SGS) bonds different from the existing Singapore government bonds and should you invest in them?

The Singapore Savings Bonds (SGS) may have gained a lot of traction in popularity lately due to rising interest rates, but there’s also another government bond that you can buy: the Singapore Government Securities bonds, or SGS Bonds.

What lies behind the appeal of these SGS bonds? What is the coupon rate offered? And should you jump in and invest in them, too?

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What are SGS bonds?

SINGA bonds, or SGS bonds, are investment bonds issued by the Singapore government on 28 September 2021.

The purpose of launching these bonds is to raise capital to fund upcoming infrastructure improvement and expansion needs. There are three SGS bonds: SGS (Market Development), SGS (Infrastructure), and Green SGS (Infrastructure), but more on these later.

Unlike the SSBs which only have a 10-year tenure, SGS bonds are more flexible, offering 2-year, 5-year, 10-year, 30-year, and 50-year tenures.

SGS bonds also pay a fixed coupon rate, which is paid twice a year, or every six months, on 1 October and 1 April.  SGS bonds are issued every month with different interest rates.

You may also refer to MAS’s auction and issuance calendar 2022 here.

Like other Singapore Government Securities (SGS) bonds, SGS (Infrastructure) bonds may be traded on the secondary market. 

However, doing so does not guarantee sellers will receive the par value of the bonds, as they would upon maturity. 

The issuance code of SGS (Infrastructure) is NA21200W.

Details of September 2022 bonds

Issue codeNA21200W
ISIN codeSGXF89085702
SGS typeSGS (Infrastructure)
Announcement date21 September 2022
Application date21 September 2022 (the closing date is typically 1-2 days before the auction date, check with your bank for the cut-off time)
Auction date28 September 2022
Issue date3 October 2022
Maturity date1 October 2051
Coupon rate1.875% p.a.
Coupon payment dates1 October and 1 April
Closing yield3.26% p.a.
Closing price74.12
Total amount offeredS$1.9 billion
Investment amountsS$1,000 (in multiples of S$1,000)

How do SGS Bonds compare against other Singapore government bonds?

Being the new kid on the block, that SGS (Infrastructure) would invite comparison with existing Singapore government bonds comes as no surprise. 

The table below offers a side-by-side reading of the differences (and similarities) between them.

Singapore Savings Bonds (SSB)SGS (Market Development)SGS (Infrastructure)Green SGS (Infrastructure)
PurposeTo offer safe and flexible investments for retail investors.To develop Singapore’s debt market, with funds raised remaining unavailable for spending.To finance major, long-term infrastructure.To finance major, long-term infrastructure with a positive environmental impact.
Issuance statusActiveActiveActivePending
Tenor10 years2, 5, 10, 15, or 30 years30 yearsTBC
Minimum investment amountS$500S$1,000, and in multiples of S$1,000S$1,000, and in multiples of S$1,000S$1,000, and in multiples of S$1,000
Investment capS$200,000 per individualLimit for each auctionLimit for each auctionLimit for each auction
Maturity and redemptionMay be redeemed earlyNo early redemptionNo early redemptionNo early redemption
Indicative coupon rate (per annum)1.78% (average over 10 years)1.25%1.875%TBC
Source of fundsCash or SRSCash, SRS or CPFCash, SRS or CPFCash, SRS or CPF

Three SGS Bonds in total

As you can see, there are three SGS Bonds in total, with SGS (Infrastructure) being the second one in the lineup. 

It is slated to be followed by Green SGS (Infrastructure), which will be used to fund major infrastructure developments that are considered to be better for the environment, such as railways. If that has got all those eSG investors excited, you’ll have to wait a little longer for the bond to be issued. 

Rounding out the trio is the SGS (Market Development) bond, which was the OG SGS Bond, now renamed to make room for its two new siblings. This bond continues in its original mission, which is to foster the development of Singapore’s debt market.   

Key differences between SSB and SGS (Infrastructure)

Singapore Savings Bonds (SSB)SGS (Infrastructure)
Flexible, can be redeemed earlyNo early redemption, but may be traded on secondary market
Lower initial investment of S$500, no fixed investment amounts thereafterHigher investment, S$1,000 to start, with subsequent investments in multiples of S$1,000 only
Maximum investment of S$200,000 per individualMaximum investment capped at limits of auction
Variable coupon rate increases year-by-yearFixed coupon rate
Lesser fund sources – cash and SRS onlyMore fund sources – cash, SRS and CPF
10-year tenor30-year tenor

In a nutshell, SSBs offers more flexibility, as you can redeem your bonds early. However, do note that the coupon rate increases yearly, with the last two or three years enjoying the highest coupon rate.

This also means that early redemption will cause you not to achieve the advertised average coupon rate. That said, SSBs require only S$500 to start investing, and you can freely increase your investment in any amount you wish. 

Also read: The SSB vs CPF: Which One Has Better Returns?

On the other hand, SGS (Infrastructure) doesn’t offer early redemption, which could be an issue for investors sensitive towards the long tenor of 30 years, for example.

However, you are free to trade your holdings on the secondary market – if you’re willing to accept not receiving the face value of your bonds in return.

You’ll need a higher capital to start investing – S$1,000 at least, with increments in multiples of S$1,000. To fund your SGS (Infrastructure) investment, you can use cash, the monies in your Supplementary Retirement Scheme (SRS) account, or with your CPF Investment Scheme (CPFIS) funds.

Should you invest in SGS bonds?

Generally speaking, government bonds are considered one of the best ways to balance your portfolio, given their low volatility and tendency to be negatively-related to the equities market. As such, holding some government bonds will offer some needed stability when the markets are roiling. 

Of course, not all government bonds are created equal, and at the risk of sounding hyperbolic, SGS bonds are one of the safest bonds you can invest in. It has a rating of AAA, which probably has something to do with the fact that it is backed by the Singapore government itself.

On the flipside, if you buy bonds expecting excitement, prepare to be disappointed. However, if you look upon SGS bonds, especially SGS (Infrastructure) as a twice-yearly money drip for the next 30 years, you may come away more than satisfied.  

Sounds good, how can I start investing in SGS Bonds?

Here’s what you need to apply for the SGS Bond.

  • A bank account with a local bank (DBS/POSB, UOB, OCBC)
  • A Central Depository (CDP) account that’s linked to your bank account so that the coupon and payments can be credited into your bank account
  • For CPFIS application: a CPF investment account with one of the three CPFIS agent banks (DBS/POSB, OCBC, and UOB). You don’t need to open and CPF investment account if you intend to invest with CPFIS-SA funds
  • For SRS application: An SRS account with one of the three SRS operators (DBS/POSB, UOB, OCBC)

How to buy SGS Bonds:

  • For cash application: via DBS/POSB, UOB, OCBC ATMs, or through internet banking
  • For SRS application: internet banking or your SRS operator (DBS/POSB, UOB, OCBC)
  • For CPRIS application: submit the application in person at any CPFIS or bank branches (DBS/POSB, UOB, OCBC)

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By Alevin Chan
An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.

Alevin Chan September 22, 2022 81701