Latest 17 August 2023 Treasury Bills Results Out- Cut off Yield of 3.73%.

Hey Folks, the latest round of MAS Treasury Bill auction is out. The cut off yield is 3.73%. Total application sent in is a staggering S$11.8 billion and only S$5.6 billion were allotted. The earlier 3rd August 2023 auction for T-bills were going for a slightly higher 3.75%. I have applied for S$10K at a non-competitive bid on behalf of my family members.

The good thing about T-bills is that one is paid the coupon rate upfront unlike many fixed deposit where the interest is only paid out at the end of the duration.

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Last December 2022 Government Treasury Bill Tranche Coming- Will it Yield Over 4.4% Again?

With the last T-Bill issuance at an all time high of 4.4% cut off yield, my friends and colleagues were all rushing down to banks to apply for the latest hotcake in town using their CPF Ordinary Account. The excitement in office was overwhelming and feels just like buying the Toto! The frenzy over T-Bills is absolute madness indeed. 

Crazy yield relative to the low 1%-2% at beginning of the year.

Those interested can start applying. Auction date is on 21 December 2022. Check with your bank on the last date to apply using electronic banking so that you do not miss it. For those who want to take out CPF ordinary account, well.....too bad....you have to go down to bank to queue to apply. CPF Board for some reason does not allow electronic application online. Guess CPF Board frown upon the outflow of cash from their agency. 

Happy application and Merry Christmas folks!

Application for Singapore Government Treasury Bills- Decent Discount Rate Expected.

A few days ago, my wife suddenly asked me a question on how to apply for MAS Treasury bills. I was rather stunned by her query as she is normally very conservative and the most complicated "investment" she is willing to go into on her own initiative is fixed deposit. Her forage into equities came only after very extensive persuasion and efforts from me. Anyway, turns out that her colleagues were all obsessed with placing money into fixed deposits and subscribing for Treasury bills these days. The 6 month Treasury bill for this upcoming 2nd half October 2022 tranche is expected to be approximately 4% financing rate which is a far cry from the pathetic low rates in the previous years.

1. What are Treasury bills?

Treasury bills (T-bills) are short-term Singapore Government Securities (SGS) issued at a discount to their face value. Investors receive the full face value at maturity. The Government issues 6-month and 1-year T-bills. 

Application highlights for Singapore Government Securities (using DBS platform as an example)

2. How to apply for Singapore Government Securities?
I think that Kyith (Investment Moat) has a very good and useful write-up on the intricacies including using different banking platform aside from DBS. Please refer to "How to Buy Singapore 6-Month Treasury Bills (T-Bills) or 1-Year SGS Bonds"

3. What is the cut off timing to subscribe for the latest tranche?

Unfortunately, the latest tranche application has closed. DBS closed it at 9pm, 26 October 2022, 1 business day before the auction date of 27 October 2022. Interested folks can wait for the upcoming November 2022 tranche and possibility higher interest rates.

Parting thoughts

I thought that the Singapore Government Securities (Singapore Savings Bonds, Treasury Bills & Government Bonds), offer quite a decent return for risk adverse investors as an alternative to letting cash remain in bank account. Nevertheless, for myself, I will rather put extra cash into local banking stocks or SREITs to take advantage of the huge decline in market price and higher distribution yield. 

Updated 27 Oct 2022-Results of Auction:

Cut off yield is 4.19% for this issuance! Much higher than what I expected....OMG....those who put in $200K gets S$4,190 immediately refunded. This marks the highest ever yield on a 6 mth T-bill since more than 30 years ago (September 1988) where it peaked at 4.73%.