Treasury Bill – BY23101W 1-Year T-bill
If you look at the recent treasury bill, the cut off yield is 3.58% p.a. One of the lowest so far for this year. The first question came to mind is why so low? In fact, this is one of the rare 1-year bill. Will this time be the time where Fed pivot and interest rates starts to go down? The time that everyone is waiting for?
Let’s look at the Singapore Saving bonds – SBMAY23 GX23050W. The rate is 3.03% (year 1) and reaches for the 3.21% (year 10). The average is 3.07%.
Application deadline is 25 Apr 2023, 9pm with $700.0 million. Next payment will be 01 Nov 2023 with subsequent payment on every 6th Month on 01 May and 01 Nov.
Pros and Cons of SSB
Let’s us recap the advantages of SSB too.
- Very safe – backed by Singapore Government
- Locked down decent rates of around 3% for 10 years.
- Easy to redeem and can redeem partial
- Liquidity needs maximum of 1 month where you can get your money back. Hence suitable as emergency fund.
- Limit of 200k should be good enough for most people.
- Can build Bond Ladder to get monthly income (which I already did)
Let’s us recap the disadvantages of SSB:
- Short term rates are lower than banks’ fixed deposits, money market funds such as MoneyOwl,etc of around 3.5% and above.
- Low returns
- 1 month liquidity to redeem your funds may be too long for people who need the funds immediately.
Let’s compare to Fixed Deposit Rates
One of the very good rates now is CIMB 6-month fixed deposit. The rate for 6 months for S$10,000 and above is 3.45% for personal banking or 3.50% for preferred banking. If you need your funds for the next 6 months, this is one of the better options, but this mean that you fund will be lock for 6 months unless you break it later.
Of course, for those who are slightly more adventurous and want to keep your funds liquid, you can consider cash funds such that Money Owl Wisesaver or Webull Moneybull. Both are very good options.
Yield going up or down?
If we look at FED rate, the longer rates are going down, but the shorter bills are actually above 5%. The yield curve is still highly inverted. Looking at other factors, very likely that the next month Singapore Saving Bonds will likely be lower.
However, for those who want to lock your interest for the next 10 years above 3%, do consider applying some SSB SBMAY23 GX23050W.
Application deadline is 25 Apr 2023, 9pm with $700.0 million.
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People are drawn to dividend investing. Why? Firstly, dividends provide a regular stream of income, allowing investors to receive a portion of the company’s profits on a periodic basis. This can be particularly attractive for individuals seeking consistent cash flow or looking to supplement their existing income. Additionally, dividend investing is often viewed as a more stable and predictable investment strategy compared to relying solely on capital appreciation.
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Remember: Time is the Ultimate Currency, not Money
Lastly, please remember Time is the ultimate currency, not money! Below is what I shared in this post.
Money just buy you the chance of freedom. When you are young and working, you exchange time for money. When you are old, you can have lots of money but you can’t buy time back, especially the things that you have missed while busying striking out in career. Of course, if you love your career, and consciously know that you are missing out the first time your child walk or talk, that’s ok, but if you are the other spectrum, please do something about it.
Love your life daily.
Time is ticking away.
For each passing day,
You have one less day with your spouse, parents, children and yourself.
Enjoy and Treasure your Life!
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