Want to Sell Your Government Bonds? Here Are 7 Things to Consider

7 Points to Know Before Selling Government Bonds 

1. Type of Bond and Sale Terms
2. Market Price
3. Capital Gain/Loss Potential
4. Timing
5. Liquidy and Funding Needs
6. Transaction Fees
7. Tax Rates

Smarter Bond Investments with DBS Treasures Priority Banking           

Selling Government Bonds can be a strategic decision, especially if done the right way. The procedure itself is fairly straightforward, especially with DBS Treasures priority banking, where the process is seamless and efficient.

However, convenience must go hand in hand with caution. There are several important factors you need to consider to avoid making a decision that could result in future losses.

7 Points to Know Before Selling Government Bonds

Selling Bonds isn’t as complicated as it may seem—especially when you understand the process. But before you commit, it’s crucial to take note of a few key considerations to help ensure your decision works in your favor.

1. Type of Bond and Sale Terms

Before selling, it’s essential to understand the type of Bond you hold. There are two main categories: Primary Market Bonds and Secondary Market Bonds.

Primary Market Bonds are purchased during the initial offering and typically cannot be sold before the end of their holding period. Secondary Market Bonds, on the other hand, can be traded at any time after issuance.

Knowing this distinction helps you determine when and how you can sell. It’s also important to consider other characteristics—such as tenor, coupon rate, and risk profile.

For instance, long-tenor Bonds tend to be more sensitive to interest rate fluctuations. Don’t rush into selling without fully understanding the nature of your investment product.

2. Market Price

In the secondary market, Bond prices fluctuate depending on economic conditions. Key drivers include inflation and interest rates.

When inflation rises, purchasing power declines, and central banks often raise benchmark interest rates. As a result, many investors shift to deposits, which are seen as safer and more rewarding, causing bond demand to fall and prices to drop. If you sell during a market downturn, the risk of loss increases.

That’s why it’s important to monitor market price trends over recent months. With a better grasp of market movements, you’ll be in a stronger position to sell at the most strategic time.

3. Capital Gain/Loss Potential

Selling Bonds isn’t just about collecting regular coupons—it also involves the possibility of capital gains. This occurs when you sell your bond at a higher price than what you paid.

However, the opposite is also true: selling below your purchase price results in a capital loss. That’s why it’s critical to compare the current price to your original buy-in point.

This strategy suits investors who are actively monitoring the market and have the time to track price movements.

But for more passive investors, it might not be ideal due to the higher level of risk.

Avoid chasing short-term gains without fully assessing the downside. Always calculate the potential profit or loss before you make a move.

4. Timing

Timing is everything when it comes to selling Bonds. If you sell before maturity, chances are the price won’t be as high as if you waited until the Bond matures.

The closer a Bond gets to its maturity date, the more its price tends to align with its par value. But if you sell in the middle of the term—especially during periods of rising interest rates or market volatility—you may get a significantly lower price.

That’s why it’s crucial to evaluate your liquidity needs. Ask yourself: is this really urgent? Or can it wait?
If the need isn’t pressing, it may be wiser to hold until closer to maturity, which can help you minimize the risk of capital loss.

5. Liquidity and Funding Needs

Liquidity refers to how easily a bond can be sold on the market. Not all Government Bonds are highly liquid—especially those issued in limited quantities or those with low investor demand.

If your Bond lacks liquidity, you may struggle to find a buyer when you want to sell. In some cases, you might even have to sell it at a lower price than expected.

This situation can be far from ideal, particularly if you need quick access to funds. That’s why it’s important to check the liquidity of a Bond before purchasing—so that when the time comes to sell, the process is smoother.

In general, Bonds such as ORI and Retail SBN tend to be more liquid due to strong investor demand. Still, it’s always wise to confirm this upfront to avoid surprises later on.

6. Transaction Fees

When selling Bonds, be mindful of transaction costs. These may include broker commissions or deductions from your total sale value.

While they may seem small, if not calculated properly, they can impact your final net returns. Each platform or financial institution may have different fee structures.

Make sure you know the exact breakdown of these fees before proceeding with any transaction.
Don’t let unexpected charges significantly reduce your gains.

If needed, compare platforms to find the most efficient option. Even small fees should be accounted for to help keep your investment returns optimized.

7. Tax Rates

Returns from government bonds—whether from coupon payments or capital gains—are subject to income tax. If you fail to factor this in, your actual net earnings may fall short of your expectations.

Taxes on coupons are usually deducted automatically. However, capital gains from secondary market sales must be declared in your annual tax report. That means you need to know which tax rates apply in order to report them accurately.

Failing to report properly may result in penalties. On the other hand, effective tax planning can help you manage your portfolio more intelligently.

So, never underestimate tax obligations. Understanding applicable regulations will allow you to optimize your returns legally and safely.

Smarter Bond Investments with DBS Treasures Priority Banking

If you're considering whether to sell or hold your Government Bonds, make sure your decision is supported by a trusted investment partner like DBS Treasures priority banking.

Government Bond products at DBS Treasures priority banking offer competitive returns, often exceeding average time deposit rates. Transactions can be done anytime with no additional fees through the digibank by DBS Application—whether you're buying, selling, switching, or registering your Single Investor Identification (SID)—all from one practical platform.

You’ll also be supported by curated market insights from our team of financial experts, delivered in a personalized way and tailored to your risk profile and portfolio goals—powered by Artificial Intelligence/Machine Learning (AI-ML). These insights are complemented by curated solutions for both investment (Grow) and insurance (Protect), helping you invest quickly and confidently through your preferred channel.

With the full support of DBS Treasures priority banking, you can manage your Bond investments with clarity and direction.