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.