Par Value (Bond) Singapore: What Face Value Really Means for SSBs & T-Bills
The redemption value printed on a bond — and why the price you actually pay can be higher or lower than that number.
Last updated: July 2026 | Category: FIXED INCOME
Par value, also called face value, is the fixed amount a bond issuer promises to repay the bondholder at maturity, and is the base amount on which periodic coupon interest payments are calculated — it is not necessarily the price you pay to buy the bond.
Not financial advice. All figures for educational reference only. Data as at July 2026.
Key Takeaways
- For Singapore Savings Bonds (SSB), the minimum investment (and effectively the par value unit) is S$500, in multiples of S$500, up to a per-individual cap of S$200,000 across all SSB holdings.
- For standard Singapore Government Securities (SGS) bonds and Treasury bills (T-bills), the typical minimum investment denomination is S$1,000.
- A bond’s market price can trade above par (“at a premium”) or below par (“at a discount”) depending on how its fixed coupon compares to prevailing interest rates — when rates rise after issuance, existing lower-coupon bonds typically fall below par to make their effective yield competitive.
- SSBs are unusual among bonds in that they are specifically designed to always be redeemable at par (S$500 per unit) any month with no penalty, removing the price volatility that regular SGS bonds or corporate bonds can experience on the secondary market.
- T-bills, by contrast, are typically sold at a discount to their par value and mature at exactly par, with your return coming entirely from the difference between the discounted purchase price and the S$1,000 (or multiple) redemption value.
Table of Contents
What Is Par Value (Bond) Singapore?
Par value is the amount printed on a bond as its redemption or maturity value — the sum the issuer commits to repay the bondholder when the bond matures. It also serves as the reference amount for calculating coupon payments; a bond with a S$1,000 par value and a 3% annual coupon rate pays S$30 a year, regardless of what price the bond is currently trading at in the market.
In Singapore, retail investors most commonly encounter par value through three government-backed instruments: Singapore Savings Bonds (SSB), Treasury bills (T-bills), and Singapore Government Securities (SGS) bonds. Each of these has its own par value convention and its own relationship between par value and market price, which is important to understand because the price you pay when buying doesn’t always equal the amount you’ll eventually receive back.
How Does It Work in Singapore?
For SSBs, MAS designed the product so that the S$500 par value and market price are effectively always the same — SSBs are non-tradable and can only be redeemed directly with MAS at par (S$500 per unit) in any month, with no secondary market pricing volatility to worry about. This is a deliberate simplification aimed at retail savers who want predictable, government-guaranteed value regardless of interest rate movements.
For T-bills, the mechanic is different: T-bills are sold at a discount to their S$1,000 (or multiple) par value at auction, and the size of that discount determines your yield. If a 6-month T-bill with a S$1,000 par value is issued at S$980, your return is the S$20 difference over the 6-month holding period, expressed as an annualised yield.
For regular SGS bonds, which pay a fixed coupon and trade on the secondary market before maturity, the market price moves inversely with prevailing interest rates: if interest rates rise after a bond is issued, its fixed coupon becomes less attractive relative to newer bonds paying higher rates, so its market price falls below par to compensate buyers with a higher effective yield; the reverse happens if rates fall.
Example
An investor buys a 6-month Singapore T-bill with a par (face) value of S$10,000 at an auction price of S$9,850, reflecting the prevailing cut-off yield at auction. At maturity, MAS repays the full S$10,000 par value — the investor’s return is the S$150 difference, which annualises to roughly 3% for the 6-month holding period. If interest rates rise sharply between purchase and maturity and the investor needed to sell the T-bill early on the secondary market, they might have to sell below their original S$9,850 purchase price, since newer T-bills issued after the rate rise would offer a more attractive discount to par than the investor’s older holding.
Advantages
- Predictable redemption for SSBs — because SSBs are always redeemable at their S$500 par value, savers face zero market-price risk if they hold to any monthly redemption window, unlike tradable bonds.
- Yield transparency for T-bills — because T-bills are sold at a discount to a known par value, the yield calculation is straightforward and doesn’t depend on coupon reinvestment assumptions.
- Useful benchmark for comparing bonds — knowing a bond’s par value and coupon rate lets investors quickly estimate the annual cash coupon income, before considering market price premiums or discounts.
- Government guarantee on par repayment — for SSBs, T-bills, and SGS bonds, the Singapore government guarantees repayment of par value at maturity, which is a core reason these instruments are considered close to risk-free for SGD investors.
Risks and Limitations
- Market price below par means a capital loss if sold early — for tradable bonds like SGS bonds or corporate bonds, selling before maturity when the market price is below par locks in a loss on the original investment.
- Confusing par value with current value — new investors sometimes mistakenly assume a bond’s par value is what it’s currently worth on the market, when in fact the trading price can differ meaningfully, especially in a changing interest rate environment.
- Reinvestment risk at maturity — receiving your par value back at maturity doesn’t guarantee you can reinvest at the same yield; if interest rates have fallen, your next bond purchase may only offer a lower coupon or T-bill discount.
- Not all bonds trade near par — corporate or riskier bonds can trade well below par even outside of interest rate moves, if the market perceives increased default or credit risk in the issuer.
Par Value vs Market Price vs Yield
| Concept | Par Value | Market Price | Yield |
|---|---|---|---|
| Definition | Fixed redemption amount at maturity | Price you actually pay/receive to trade the bond | Effective annualised return based on price paid |
| Changes over time? | No — fixed for the bond’s life | Yes — fluctuates with interest rates and demand | Yes — moves inversely with market price for fixed coupons |
| SSB behaviour | Always S$500 per unit | Always equals par — no secondary market | Set by MAS’s step-up interest schedule at issuance |
| T-bill behaviour | Typically S$1,000 per unit | Sold at a discount to par at auction | Determined by the size of the discount to par |
The Bottom Line
Par value is simply the amount a bond promises to repay at maturity — it’s the anchor point for coupon calculations, but the price you pay to buy the bond, and therefore your actual yield, can be higher or lower depending on prevailing interest rates. Singapore Savings Bonds are the rare exception where par value and redemption price are always identical, which is exactly why they’re marketed as Singapore’s simplest, lowest-risk bond product for retail savers.
Frequently Asked Questions
What is par value in a bond?
Par value, also called face value, is the fixed amount a bond issuer promises to repay the bondholder at maturity, and is the base amount used to calculate periodic coupon interest payments.
What is the par value of a Singapore Savings Bond?
The Singapore Savings Bond has a par value of S$500 per unit, and because it is redeemable at par in any month with no penalty, its market value never differs from its face value.
Why do T-bills sell below par value?
T-bills are sold at a discount to their par value at auction, with the size of that discount determining the investor’s yield — the bill still repays the full par value at maturity, so the return comes entirely from the gap between the discounted purchase price and par.
Can a bond's market price be different from its par value?
Yes — a tradable bond’s market price moves inversely with prevailing interest rates, trading above par (a premium) when its fixed coupon is more attractive than current rates, or below par (a discount) when current rates have risen above its coupon.
What is the minimum par value denomination for Singapore Government Securities?
Standard Singapore Government Securities (SGS) bonds and T-bills typically have a minimum investment denomination of S$1,000, while Singapore Savings Bonds have a smaller S$500 minimum unit.