Investing Updates : Is the 1-year T-bill better than the 6-month T-bill and fixed deposits?

URL: https://growbeansprout.com/1-year-t-bill-vs-6-month-t-bill-jan-2025

Gemini:

Key Takeaways:

• Yield Comparison:
• 1-year T-bill closing yield (2.80%) is currently lower than the 6-month T-bill cut-off yield (2.99%).
• 1-year T-bill yield is higher than the best 1-year fixed deposit rate (2.60%).

• Reinvestment Risk:
• Investing in two 6-month T-bills exposes investors to the risk of lower yields on the second tranche if interest rates decline.

• CPF Considerations:
• Using CPF for 1-year T-bills involves a longer period of lost CPF interest compared to 6-month T-bills.

• Author's Opinion:
  • The author prefers the 1-year T-bill to the 6-month T-bill due to the potential for lower reinvestment risk.
  • The author also considers the 1-year T-bill more attractive than fixed deposits due to its higher yield.

In essence, the article analyzes the trade-offs between 1-year and 6-month T-bills, considering factors like current yields, reinvestment risk, and CPF implications. While the 6-month T-bill currently offers a higher yield, the author favors the 1-year T-bill to avoid potential reinvestment risks at potentially lower rates.