Are SSBs, T-bills, and SGS bonds safe investments in Singapore?

Safety of SSBs, T-bills, and SGS Bonds

SSBs (Singapore Government Bonds), T-bills (Treasury Bills), and SGS (Singapore Government Securities) bonds are generally considered among the safest investments in Singapore because they are backed by the full faith and credit of the Singapore Government. They carry virtually no credit risk.

T-bills Explained

T-bills are short-term debt instruments issued by the Government. You can invest via non-competitive or competitive bids in the auction system. For non-competitive bids, 40% of the issuance is allocated, and you are guaranteed to get in, though the amount may be pro-rated if demand exceeds allocation. Competitive bids are ranked by yield, with the cut-off yield determining who gets the allocation. For example, the latest cut-off yield was 3.7%. (Source: General market practice/MAS information).

CPF and Government Securities

While SSBs and SGS bonds are not explicitly detailed in the provided CPF rules, it is important to note the distinction between these government securities and CPF funds. CPF funds (OA at 2.5%, SA/RA at 4% floor until 2025) are government-managed retirement savings. In contrast, SSBs/T-bills are investments you purchase separately. The CPF Board does not directly invest member funds into these specific instruments, although the Government uses them for managing liquidity.

SRS Investment Options

If you utilize the Supplementary Retirement Scheme (SRS) to invest, these government securities are viable options, as the SRS account itself only earns 0.05% interest and must be invested. The SRS contribution limit for citizens/PRs is SGD 15,300 per year. Investing in safe instruments like T-bills via SRS allows you to lock in your retirement age (e.g., age 63 if opened before July 1, 2026) while benefiting from tax deferral, as only 50% of withdrawals after the statutory retirement age are taxed (IRAS guidelines).