facebookAppreciate if someone can explain in layman terms what are T bills or SGS? Tried to read online but didn't understand? - Seedly

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Anonymous

18 Apr 2019

General Investing

Appreciate if someone can explain in layman terms what are T bills or SGS? Tried to read online but didn't understand?

Appreciate if someone can explain in layman terms. Considering between SSB and T bill due to 1 year period for t bill.

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T-Bills are a form of IOU by the US Treasury. These bills do not pay interest, but can be bought at a discount (eg. $998.2 for $1000) in denominations of $1000 up to $5mil. The entire sum will be realised upon maturity.

SSB on the other hand is by the SG Govt and earns interest instead of 'discount'. When you invest $1000, you'll get 2% interest (~$20). SSB in short maturity period is generally not worth since interest is less than 2% and may incur some transactional cost.

Both SSB and T-bills are principle guaranteed.

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