Investing Updates : T-bill yield rebounds to 2.73% as demand dives

Source : 

https://growbeansprout.com/t-bill-allotment-26-mar-2025

Apple Intelligence : 

• T-bill Yield Change: The cut-off yield for the 6-month Singapore T-bill auction on 26 March rebounded to 2.73%.

• T-bill Application Change: Total applications for the 6-month Singapore T-bill declined S$15.8 billion from the previous auction.

• Competitive Bid Change: The amount of competitive bids decreased to S$14.4 billion from the previous auction.

• T-bill Allocation: Competitive bids below 2.73% received full allocation, while non-competitive bids totaling S$1.4 billion were also fully allocated.

• T-bill Applications and Issuance: Total applications decreased to S$15.8 billion, resulting in a lower application-to-issuance ratio (2.14x) compared to the previous auction (2.64x).

• SSB Applications: Applications for the Singapore Savings Bond (SSB) increased to S$678 million, the highest since September 2024, driven by its higher 10-year average interest rate.

• T-bill Yield Rebound: The T-bill yield rebounded to 2.73%, driven by a fall in demand and a shift towards other safe options like SSB.

• Comparison with Other Investments: The T-bill yield is now above the best 6-month fixed deposit rate but below the break-even yield for CPF OA applications.

• Alternative Investment Options: Higher yield options include the UOB Stash account, bond funds like the United SGD Fund, and selected high-quality Singapore REITs.

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.