Singapore Government Securities

Singapore Government Securities (SGS) are interest-earning debt instruments issued by the Monetary Authority of Singapore on behalf of the Singapore Government. They come in two forms:

Treasury Bills

  • These are short-term securities with original maturities of 3 and 12 months
  • Treasury Bills are issued at a discount from the face value and redeemed at the full face value upon maturity. The return on your investment is therefore the difference between the purchase price and the face value of the Treasury Bill, i.e. the discount given

Government Bonds

  • These are longer-term securities with original maturities of 2, 5, 7, 10 and 15 years
  • They pay a fixed interest rate (coupon) every six months for the entire life of the securities
  • Coupon or interest rate is guaranteed for the entire life of the bond, thus assuring the investor of a steady source of income

Features

  • On maturity, the full face (par) value of the Government Bond and Treasury Bill is paid to the investor
  • Taxation for residents:

    • Interest and discount derived from SGS on or after 1st January 2004 by a resident individual, except where such income is derived through a partnership in Singapore or derived from the carrying on of a trade, business or profession, is exempt from tax
    • Interest and discount derived from any SGS by any company or body of persons is subject to Singapore tax at a concessionary rate of 10%
  • Taxation for non-residents:

    • Interest and discount payable to non-residents (without any permanent establishment in Singapore) on Qualifying Debt Securities, which include SGS issued during the period from 28 February 1998 to 31 December 2008, is exempted from withholding tax. For non-residents with permanent establishments in Singapore, the withholding tax exemption is subject to the condition that the debt securities are issued during the period from 27 February 1999 to 31 December 2008 and are not purchased using funds from Singapore operations
  • Capital gains are not taxed in Singapore
  • The SGS will be credited to your Debt Securities account opened with UOB. Regular statement of your SGS holdings will be mailed to you

Benefits

  • SGS are safe and secure investments as the Singapore Government guarantees both the timely payment of interest on the bond and the principal payment on maturity
  • SGS are alternatives to stocks or equities and will provide the diversification for your investment portfolio
  • SGS offer opportunities for capital gains when prices of securities rise in response to a fall in interest rates. (Conversely, there may be capital losses if interest rates rise.)
  • SGS offer liquidity as they can be readily sold for cash before their maturity date

Eligibility

  • To purchase SGS, you require a minimum sum of S$1,000. You’ll need to open a Debt Securities account with UOB. Cash can be used to purchase both Government Bonds and Treasury Bills
  • You may either buy SGS from us or participate in the auction of new SGS issues by submitting your bid(s) to us on a prescribed tender form(s) that is/are available from us. There are no restrictions on foreign investors in purchasing SGS
  • No commission or custody fee is charged for Singapore Government Securities transactions

More Information

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