Singapore Treasury bills (T-bills)

[henrylbh]

Using OA,
For a 1 year T-bill... breakpoint = 2.5% x 14/ 12 ~ 2.92% ?
For 6 month... = 2.5% x 8 / 6 ~ 3.34% ?
Using SA,
For a 1 year T-bill... breakpoint = 4% x 14/ 12 ~ 4.67% ?
For 6 month... = 4% x 8 / 6 ~ 5.34% ?

..... I think....

All depends on how many months of CPF interest is forgone.

 

[reddevil0728]

Yup.... think most of the time should be 7/6 and 13/12... but worst case could be 8/6 and 14/12.

actually all these can be seen via the auction calendar.

 

[chopra]

this is extracted from the cpf site
From 1 October 2018, if you are a new CPFIS investor, you will need to take the SAQ before you can start investing under CPFIS. Agent banks and product providers will require you to declare your SAQ status and/or ask to view a copy of your SAQ status for verification. You can participate in the CPFIS once you have taken the SAQ, regardless of your SAQ results. You can
check your SAQ status
via my cpf digital services.
you get 0/20 also can open.

this is so funny but i guess authorities must hv deliberated quite a bit



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[reddevil0728]

this is so funny but i guess authorities must hv deliberated quite a bit



Read HWZ Forum Rules!

i think if you fail and then you later cry foul as to why you lose money, they can say you are aware of the risk but still went ahead

 

[chopra]

wow, that's an easy formula, just to add
For 6 mth, it could be just 7/6, not always 8/6, and the same for
For 12 mth, it could be just 13/12, not always 14/12

i also used this. short n sweet



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[Geralt]

Final update from DBS regarding the $0.35 charge for t-bills and CPF.

1. All previous applications will be refunded the $0.35 within the month if it hasn't happened yet.

2. They will update the system to not deduct the $0.35 for t-bill applications, but this is going to take some time to implement. In the meantime, any t-bill applications before this update goes live will still have the extra $0.35 charge initially but will also get the refund within the month of application.

DBS CPFIS customers, please take note.

 

[dork32]

Yup.... think most of the time should be 7/6 and 13/12... but worst case could be 8/6 and 14/12.

8/6 or 7/6 is based on the assumption that you return your investment to cpf after tbills mature.

but if your tbills mature, you use the money to immediately reinvest in the next tranche of tbills, you could reduce the losses.

 

[andyhtc]

Assuming a T-bill completes its 12-month cycle and is refunded to CPFIA, can we immediately apply for a new T-bill without the fund being manually transferred back to CPF OA?

 

[surefire888]

8/6 or 7/6 is based on the assumption that you return your investment to cpf after tbills mature.

but if your tbills mature, you use the money to immediately reinvest in the next tranche of tbills, you could reduce the losses.

Even if u reinvest the 6m maturity proceeds in the next 6m tranche, u could be worse off than the person who had invested in a 12m TB at the same time

This is because if say u had invested in a mid-month issue, by the time the proceeds mature, u may only be able to invest in the month-end issue

As an eg, for the 12m TB auction on 13 Oct, there is a loss of 13 months cpf interest

If the person had invested in the 6m TB on 13 Oct 2022, it will mature on 18 Apr 2023. Hence he would have to invest in the end-Apr 2023 issue which will mature in Nov 2023. All in, he will lose 14 months cpf interest from Oct 2022 to Nov 2023

 

[reddevil0728]

Even if u reinvest the 6m maturity proceeds in the next 6m tranche, u could be worse off than the person who had invested in a 12m TB at the same time

This is because if say u had invested in a mid-month issue, by the time the proceeds mature, u may only be able to invest in the month-end issue

As an eg, for the 12m TB auction on 13 Oct, there is a loss of 13 months cpf interest

If the person had invested in the 6m TB on 13 Oct 2022, it will mature on 18 Apr 2023. Hence he would have to invest in the end-Apr 2023 issue which will mature in Nov 2023. All in, he will lose 14 months cpf interest from Oct 2022 to Nov 2023

that's not a like for like comparison.

12m only available once every quarter. 6m available every 2 weeks

 

[silverbomb]

Final update from DBS regarding the $0.35 charge for t-bills and CPF.

1. All previous applications will be refunded the $0.35 within the month if it hasn't happened yet.

2. They will update the system to not deduct the $0.35 for t-bill applications, but this is going to take some time to implement. In the meantime, any t-bill applications before this update goes live will still have the extra $0.35 charge initially but will also get the refund within the month of application.

DBS CPFIS customers, please take note.

how did you approach them? email?

did you highlight to them they're the only bank that implements a minimum charge ($5) for holdings such as T-bill?

 

[bearkia]

Assuming a T-bill completes its 12-month cycle and is refunded to CPFIA, can we immediately apply for a new T-bill without the fund being manually transferred back to CPF OA?

Of course can and it is the preferred way.

 

[vsvs24]

how did you approach them? email?

did you highlight to them they're the only bank that implements a minimum charge ($5) for holdings such as T-bill?

The min charge of $5 is for shares, not Tbills.

Just clarifying the facts. They should remove the min $5 for shares

 

[vsvs24]

Final update from DBS regarding the $0.35 charge for t-bills and CPF.

1. All previous applications will be refunded the $0.35 within the month if it hasn't happened yet.

2. They will update the system to not deduct the $0.35 for t-bill applications, but this is going to take some time to implement. In the meantime, any t-bill applications before this update goes live will still have the extra $0.35 charge initially but will also get the refund within the month of application.

DBS CPFIS customers, please take note.

Actually maybe the earlier charge for CPF deduction on 30 Sep has been reversed for me . Because I saw a credit of $0.36 in my CPFIS one or two days ago. I was wondering if it is accrued interest or something.

Then today after seeing your post, the credit in total is $1.48. I have 1 application in Sep and 3 in Oct so far.

Can only confirm in Nov when the Oct statement is out.

 

[Geralt]

how did you approach them? email?

did you highlight to them they're the only bank that implements a minimum charge ($5) for holdings such as T-bill?

I called the hotline and got lucky the second time. This customer service staff gave me an email address for me to send my CPF statement showing that they had deducted the gross amount before auction date in order for them to investigate the matter. That was what led to them changing the system to deduct only the nett amount after auction date instead of gross amount before auction date. When I brought up that other banks weren't charging CDP affirmation fee, I was advised to obtain screenshots to prove it since they can't act otherwise. Once @sakuraji and @peacefulday kindly shared them, I emailed DBS those links and included the customer service staff's name since he was familiar with my case.

I did also bring up the $5 minimum charge and the interest fee in that email and spoke to a different customer service staff via hotline just to see whether it was possible to persuade them to make it more in line with the other banks, but was told that these would remain unchanged. I also don't expect them to lower or remove those fees. You're welcome to try your luck and see if you can succeed in getting them to reconsider.

 

[surefire888]

that's not a like for like comparison.

12m only available once every quarter. 6m available every 2 weeks

Yes, of course. But where 12m and 6m are both available, I just wanted to point out that buying 2 x 6m may lead a person to being worse off than buying 12m in terms of cpf interest lost and is something to take into consideration in deciding which to apply for

 

[reddevil0728]

Yes, of course. But where 12m and 6m are both available, I just wanted to point out that buying 2 x 6m may lead a person to being worse off than buying 12m in terms of cpf interest lost and is something to take into consideration in deciding which to apply for

ya sure. but just saying that's in the context of 6m to understand how it works

 

[vsvs24]

Yes, of course. But where 12m and 6m are both available, I just wanted to point out that buying 2 x 6m may lead a person to being worse off than buying 12m in terms of cpf interest lost and is something to take into consideration in deciding which to apply for

6 mths not necessarily worse off. It is possible that the interest rate 6 mths later might be higher than 12 mths later. Depends on you for see the interest rate movement next year.

 

[surefire888]

Assuming a T-bill completes its 12-month cycle and is refunded to CPFIA, can we immediately apply for a new T-bill without the fund being manually transferred back to CPF OA?

While it is certainly possible to use the proceeds from a 12m TB maturity to reinvest b4 transferring back to cpf, it is unlikely u want to do that because
u will almost surely not be able to reinvest in another 12m TB in the same month bec u will likely get yr proceeds After the closing date of the next 12m TB. For eg, for the 13 Oct 2022 12m TB, maturity is 17 Oct 2023. If next year follows a similar calendar, the closing date for the Oct 2023 12m TB will likely be around 13-15 Oct 2023

So, in practice, u prob need to rely on other cpf oa monies to apply for the next 12m TB

But u Will be able to apply for the end-month 6m TB and would only lose 7 months of cpf interest as the funds for the new TB will be the same incoming funds and there will be no double-deduction of cpf interest.

 

[surefire888]

6 mths not necessarily worse off. It is possible that the interest rate 6 mths later might be higher than 12 mths later. Depends on you for see the interest rate movement next year.

Yes, that's why I say u COULD be worse off. Ultimately, it's a consideration to take into account. U may lose another month's interest but whether u end up being better or worse off in the end would depend on interest rate movements

The main purpose of my posts is to point out that doing 2x6m TB will likely lead to a loss of 14 months cpf interest and Not 13 months as some would expect