I just applied for the 5 years SG Govt Bond that was opened for application. It is my first purchase of this investment instrument. The specific code for this bond is N519100A and you can click-through to get more details. It can be applied via ATM and Internet Banking and closes on 12 noon 29 Jan 2019.
The coupon rate (interest rate) is not established yet and it will depend on how the rest of the investment community bids for it. Yes, you can state the interest rate that you want to lend money to our government (i.e. the competitive application) but they will decide whether they would accept it. Alternatively, you can also choose (i.e. non-competitive application) and you will take the weighted average interest rate from all the applicants that is established when the application is closed.
I have applied for both types just to experience and learn. I will definitely get full allocation for My non-competitive application. But for the competitive application, I have put in a 2.3% yield and I will see if the government is willing to accept it. I believe the final yield will be closer to 2.1%, judging from Singapore Saving Bonds interest rate, so I am trying my luck.
Interest will be paid half yearly (Feb and Aug), first payment is Aug 2019 and for 5 years starting from Feb 2019 to Feb 2024.
I will consider this a risk free investment so I can’t demand high interest rate.
By the way, you can also buy and sell SG Govt Bonds via the Singapore Stock Exchange but it is not liquid so it is usually difficult to match a buyer and seller.
Besides gaining an experience in applying for SG Government Bonds, I am also trying to increase the weightage of bonds in our portfolio to balance up equities. It is getting close but not quite there yet.
If you find this investment tool applicable to your investment objectives, you may want to take a look. More details on the bond offerings from the Singapore Government via this website.
Have a great investment week ahead. Sit tight and collect dividends as more companies are announcing results and dividend payouts this week.