BS22125T 6-Month T-bill
In case for people who are not following the latest T-bill news,
The latest T-bill is out for application with the deadline of 20 December 2022, 9pm and the Auction Date 21 December 2022. Please remember to apply latest via internet banking (Cash and SRS) or in person (CPF) by 20 December 2022. For those who want to apply using CPF-OA and CPF-SA funds, please go down in person to our local banks (DBS, OCBC or UOB).
I have posted the above before in this post (https://careyourpresent.com/market-update-red-and-how-much-would-the-yield-be-for-the-next-bs22125t-6-month-t-bill/)
The deadline is tomorrow for those who want to take part!
What are Competitive or Non-Competitive bids?
I have some questions from people asking what are are Competitive or Non-Competitive bids? Which one should they choose during the application?
From the Treasury Bills website itself:
If you wish to invest in the bond only if it yields above a certain level, submit a competitive bid. You can specify the yield you are willing to accept in percentage terms, up to 2 decimal places.
Note that you may not get the full amount that you applied for, depending on how your bid compares to the cut-off yield.
Tip: A lower yield represents a more competitive bid, as you are indicating that you will accept a lower interest rate. You can submit multiple competitive bids.
In a non-competitive bid, you only specify the amount you want to invest, not the yield. Choose this if you wish to invest in the bond regardless of the return or are unsure of what yield to bid.
Non-competitive bids will be allotted first, up to 40% of the total issuance amount. If the amount of non-competitive bids exceeds 40%, the bond will be allocated to you on a pro-rated basis. The balance of the issue amount will be awarded to competitive bids from the lowest to highest yields.
You will get the bond at the cut-off yield, which is the highest accepted yield of successful competitive bids.
What does this mean in simpler wordings?
If you choose non-competitive bid, you have to put in the amount that you want to invest in the treasury bill. You will be allocated at the cut-off yield based on the auction results. In another word, for example if you put in 10k using non-competitive bid, if there are some unexpected auctioning results where many of the bidders only bid 2%, and the cut-off yield is 2%, you have to take up your 10k (assuming you are allocated everything) at that 2% despite the low rate.
However, if you choose competitive bid, you can specify the amount that you want to invest in the treasury bill and the yield that you are willing to take in. This means that if you bid 4.3% for 10k, and if the cut-off yield is 4.2%, you will get nothing with all the 10k refunded. If the cut-off yield is 4.4%, you will be given XXk at 4.4% depending on how much you have been allocated in the auction.
If you search around, many of the general advice is to pick non-competitive bid if the investor are not really sure how the auction process works.
However, my advice is to to pick competitive bid to prevent any unexpected auction results from happening where you are given very low yield (such as the example above). The worst case if you get everything refunded and use you can use your funds somewhere else rather than stuck in super lower yield treasury bill. This scenario is unlikely, but who knows? Previous previous cut-off yield was 3.9% oversubscribed whereas last cut-off yield was 4.4%?
What yield should you put in for competitive bid?
Let’s do a comparison on the alternatives.
Upcoming Treasury Bill is for 6 months, for fair comparison we should compare to 6 months Fixed Deposit. The highest now is 3.95% for CIMB (see below).
In my previous article (Best places to put Liquid Cash now), the comparable alternative would be MoneyOwl Wisesaver. The current yield is 4.2% p.a.
Do note that this rate is the gross indicative yield of the underlying cash fund, which may fluctuate as market and economic conditions change. It does not indicate the return you get for holding your investments for a year. We will update this rate periodically as the yield changes
It is investing in Fullerton SGD Cash Fund – Class A (SGD) which invested mainly in SGD Fixed Deposit and backed by Temasek. MoneyOwl itself is under NTUC income. It is as safe as you can get!
Insure, invest, or do a financial planning with MoneyOwl and get welcome Grab credits when you join using my referral link/code. I’m already a happy MoneyOwl client, you should check it out too!
You can use my referral link (or key in 6SHU-93MC) to get free $20-$60 Grab Vouchers when you invest with them. Moreover, there is a promotion until 31 Dec 2022 now where you can get $20 worth of WiseSaver units by 31 January 2023 if you open WiseSaver Account.
Let’s compare – The Conclusion
As above, the highest fixed deposit for 6 months now is 3.95% for CIMB whereas 4.2% p.a. for MoneyOwl Wisesaver.
With the fact above, if I am going bid for the upcoming Treasury Bill, I will use Competitive Bid and put the bid as:
- at least 4% if I want a higher than 6 month Fixed CIMB Rate (if I don’t believe WiserSaver can maintain 4.2% of higher going forwards)
- at least 4.2% if I believe that the interest rate will remains high under current FED policy such that MoneyOwl Wisesaver will maintain 4.2% or more (which I think will happen, given that the underlying Fullerton Funds invest in FD itself).
Thanks for reading my article. I truly appreciate that you have visited my site!
If you have any comments about this article or have any other topics that you want me to cover in my site, please feel free to leave a comment at the end. Thanks!
For those who are interested in my articles, please join the others to sign up for my free newsletter to has my newest blogposts sent to your mailbox for free!
For real time exclusive updates on market news/life (especially Crypto markets where the news move fast, important news will be shared directly via tweets or telegrams), do also join the platforms below and engage with other like-minded people!
- Telegram Group (Chat with me and other like minded people!)
- Telegram Channel (Get the latest updates on the markets/life!)
- RSS Feed
You may also contact me via [email protected].
If you’re looking referral codes, do check out my referral and ebook page. Give it a try and who knows? You might end up loving these platforms! To be absolutely fair to all the readers, I am definitely using all these companies and they are useful to me! Likely will be useful to you too!
At the same referral and ebook page, you can also download my free ebooks and other free resources:
For quick references to these resources, you can see below.
- Ebooks and other useful resources on enhancing productivity (Investment, Excel, Notion etc). Currently most of it are free at this moment (subject to change).
- MoneyOwl: You can use this 6SHU-93MC to get free grab vouchers and highly safe liquid cash fund account.
- Trust Bank – a new digital bank. A unique partnership backed by Standard Chartered Bank and FairPrice Group. You can get free bank account with no minimal balance and credit card with no annual fee ever. KNDBPEPT.
- FSMOne: P0413007. Good account to keep liquid cash in autosweep and to purchase investment at low fee.
- Hostinger: You can use this link for hosting your new website.
- Crypto.com: Use my referral link https://crypto.com/app/h92xdfarkq to sign up for Crypto.com and we both get $25 USD 🙂
1 thought on “Treasury Bill: Competitive or Non-Competitive?”