USD Fixed Deposits

[AlwaysLurking]

For those holding USD and putting USD deposits (and you aren't buying US T bill on IBKR for some reason), please note 1 year on UOB USD FD has reached 5.07%! Almost reaching double since the last time I posted in June.

However, I am still buying short term US T bills and FDs until Q1 and then see how the interest rates move.

How does one buy t bill through ibkr is it through bond scanner and the bills reflected are secondary market?

 

[reddevil0728]

How does one buy t bill through ibkr is it through bond scanner and the bills reflected are secondary market?

search US-T

 

[Pampers]

search US-T

which one in particular for 1 year and 3 year?

 

[reddevil0728]

which one in particular for 1 year and 3 year?

3-year?

T-bill only up to 1 year. no 3 year

 

[guzzler3]

For those holding USD and putting USD deposits (and you aren't buying US T bill on IBKR for some reason), please note 1 year on UOB USD FD has reached 5.07%! Almost reaching double since the last time I posted in June.

However, I am still buying short term US T bills and FDs until Q1 and then see how the interest rates move.

would prefer shorter term 2-3 months USD fixed deposit because Fed is still aggressively raising rates. I believe DBS has the best short term rates currently. I placed 3 mths 4.42% on Friday.

 

[reddevil0728]

would prefer shorter term 2-3 months USD fixed deposit because Fed is still aggressively raising rates. I believe DBS has the best short term rates currently. I placed 3 mths 4.42% on Friday.

US-T got as short as 1 month

 

[guzzler3]

US-T got as short as 1 month

bro, 3mth US-T currently about 4.11%. DBS 3 mth USD fixed 4.42%. Why place in US-T actually? Anything I missed?

https://www.dbs.com.sg/personal/rates-online/foreign-currency-fixed-deposits.page#

 

[boroangel]

would prefer shorter term 2-3 months USD fixed deposit because Fed is still aggressively raising rates. I believe DBS has the best short term rates currently. I placed 3 mths 4.42% on Friday.

I am putting mainly 1 month T-bills and FDs until FED starts stepping down the increases at each meeting to 0.25 or 0.5

on your question of difference between FD and US T-bills, SG banks do not insure any foreign currency fixed deposits. You can read the disclaimer on the banks websites. US Tbills insured by US government. I am still putting for short term USD in SG banks too since the risk I feel is low. Also, don't like the bulk of my holdings sitting in the brokerages, prefer to spread out here and there.

 

[guzzler3]

I am putting mainly 1 month T-bills and FDs until FED starts stepping down the increases at each meeting to 0.25 or 0.5

on your question of difference between FD and US T-bills, SG banks do not insure any foreign currency fixed deposits. You can read the disclaimer on the banks websites. US Tbills insured by US government. I am still putting for short term USD in SG banks too since the risk I feel is low.

yup, you are right but the risk of DBS defaulting is close to 0. If they do, Singapore probably will collapse

I mean, buying US t-bills is also trust that US won't default. So I think the risk is roughly the same.

1 mth US t-bills currently about 3.6%? depending on your quantum, DBS fixed 1 mth is around the same for >250k.

Would say I prefer US fixed deposit in DBS because there is less complexity involved.

 

[boroangel]

Yes USD FD in DBS and UOB is straightforward but T-bills in IBKR is not complicated too. The reason why I spread out all my T bills and FDs in IKBR and SG banks is I just don't like to have the bulk of my equities and cash reserves sitting in a couple of brokerages.

Quite interesting too that DBS seems to have slightly better short term rates than UOB now, and UOB has a higher longer term 12 month rate. It will be best to compare.

If I remember a few weeks ago I mentioned in a thread somewhere that I am hoping for rates to get over 6%.....wow looks like that's a possibility now. A couple of 0.5% increases and UOB 12 month FD looks like it might get there.

6% interest is no joke...every 100K is 6K a year or 500 a month, 1 mil is 60K a year, thats 5K a month. Hard to see much dividend stocks beating that in the current climate.

 

[guzzler3]

Yes USD FD in DBS and UOB is straightforward but T-bills in IBKR is not complicated too. The reason why I spread out all my T bills and FDs in IKBR and SG banks is I just don't like to have the bulk of my equities and cash reserves sitting in a couple of brokerages.

Quite interesting too that DBS seems to have slightly better short term rates than UOB now, and UOB has a higher longer term 12 month rate. It will be best to compare.

If I remember a few weeks ago I mentioned in a thread somewhere that I am hoping for rates to get over 6%.....wow looks like that's a possibility now. A couple of 0.5% increases and UOB 12 month FD looks like it might get there.

6% interest is no joke...every 100K is 6K a year or 500 a month, 1 mil is 60K a year, thats 5K a month. Hard to see much dividend stocks beating that in the current climate.

Agree with you that the high interest rate 5-6% will most likely force a big downwards re-valuation downwards for 95% of stocks. I don't know of many stocks that gives > 5% dividend? Plus the fact that earnings will most likely crater in the next few quarters.

Would generally prefer short term 1-3 months products. Ultimately, would look to convert at least half the USD back to SGD when the exchange rate is higher. If I lock it for 1 year, its pretty inflexible and I cannot take advantage of the better conversion rates. Locking 1 year would also mean I can't deploy my capital in case of any black swan credit event that might suddenly happen.

I spent quite a bit of time researching short term USD rates in Singapore and DBS is the best already. Not sure why since I always had the impression DBS is flushed with cash and they have no incentive to attract cash inflows.

 

[boroangel]

Agree with you that the high interest rate 5-6% will most likely force a big downwards re-valuation downwards for 95% of stocks. I don't know of many stocks that gives > 5% dividend? Plus the fact that earnings will most likely crater in the next few quarters.

Would generally prefer short term 1-3 months products. Ultimately, would look to convert at least half the USD back to SGD when the exchange rate is higher. If I lock it for 1 year, its pretty inflexible and I cannot take advantage of the better conversion rates. Locking 1 year would also mean I can't deploy my capital in case of any black swan credit event that might suddenly happen.

I spent quite a bit of time researching short term USD rates in Singapore and DBS is the best already. Not sure why since I always had the impression DBS is flushed with cash and they have no incentive to attract cash inflows.

Maybe building up buffer in the event bad loans increase, or more people and small businesses struggling to pay up their loans and they need more reserves for loan deferment programs in coming months, like what happened during Covid.

I personally think we are still at the early stages of stagflation, and the stock market has yet to see the full effects of it yet. More likely a continued grinddown. Gut feel is interest rates will stay high for a couple of years as the Fed struggles to bring inflation down, and interest rates will have to remain elevated for a while, and China will stick to zero Covid for much longer.

Great for savers and those who periodically short the market.

 

[guzzler3]

Maybe building up buffer in the event bad loans increase, or more people and small businesses struggling to pay up their loans and they need more reserves for loan deferment programs in coming months, like what happened during Covid.

Doesnt seem like they have an increase of bad loans currently. Local bank stocks still pretty strong especially after the stellar earnings the past week.

Whether they are anticipating bad loans to increase is anyone's guess. I would certainly think the possiblity is pretty high especially if Fed funds hit 6%. Property loan 7-8%? Business loan 10%? That's probably going to bring the entire global economy to a halt.

 

[reddevil0728]

bro, 3mth US-T currently about 4.11%. DBS 3 mth USD fixed 4.42%. Why place in US-T actually? Anything I missed?

https://www.dbs.com.sg/personal/rates-online/foreign-currency-fixed-deposits.page#

yup, you are right but the risk of DBS defaulting is close to 0. If they do, Singapore probably will collapse

I mean, buying US t-bills is also trust that US won't default. So I think the risk is roughly the same.

1 mth US t-bills currently about 3.6%? depending on your quantum, DBS fixed 1 mth is around the same for >250k.

Would say I prefer US fixed deposit in DBS because there is less complexity involved.

most recent 13week US-T auction that happened on 31 Oct is 4.07% right? (though we can only buy through secondary market hence yield would be diff, but that's besides the point) https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20221031_2.pdf

also more recent T-Bills would have higher rate and there's one more 13 week that's happening soon.

anyway the point is not saying 1 is better than the other.

just saying don't dismiss US-T entirely. need to take a more holistic view.

1) if you already have USD in IBKR, then might just make sense to put in US-T even though slightly lower yield cause there might be cost (depending on our banking status) to transfer USD from IBKR to DBS.

2) i believe DBS USD FD has a higher minimum than US-T? that's also another consideration

3) yes as much as DBS has low probability of default, but they are still of higher probability than the US government

4) if your USD is with DBS rather than IBKR, then make sense to do DBS.

the point i am trying to make is, when i post a message I don't know the individual circumstances of everyone, but the logic should apply to all, and then depending on individual circumstances it may or may not be suitable for your circumstances.

 

[guzzler3]

most recent 13week US-T auction that happened on 31 Oct is 4.07% right? (though we can only buy through secondary market hence yield would be diff, but that's besides the point) https://www.treasurydirect.gov/instit/annceresult/press/preanre/2022/R_20221031_2.pdf

also more recent T-Bills would have higher rate and there's one more 13 week that's happening soon.

anyway the point is not saying 1 is better than the other.

just saying don't dismiss US-T entirely. need to take a more holistic view.

1) if you already have USD in IBKR, then might just make sense to put in US-T even though slightly lower yield cause there might be cost (depending on our banking status) to transfer USD from IBKR to DBS.

2) i believe DBS USD FD has a higher minimum than US-T? that's also another consideration

3) yes as much as DBS has low probability of default, but they are still of higher probability than the US government

4) if your USD is with DBS rather than IBKR, then make sense to do DBS.

the point i am trying to make is, when i post a message I don't know the individual circumstances of everyone, but the logic should apply to all, and then depending on individual circumstances it may or may not be suitable for your circumstances.

Would admit I don't have as much knowledge in buying US t-bill too. I did look at it briefly but seems there are quite a few things I don't understand so I gave up, lol. FD just seems more straightforward and easy.

I think USD TT fee to DBS is about $10 only (charged by DBS). Haven't tried to do it from IBKR though. Not sure if IBKR charges anything on their end.

DBS USD FD minimum is 5k USD. Gotta place more than 250k USD for preferential rates. I asked DBS treasures if they have any promo rates but seems like they don't atm. She says she will get back to me though.

 

[reddevil0728]

Would admit I don't have as much knowledge in buying US t-bill too. I did look at it briefly but seems there are quite a few things I don't understand so I gave up, lol. FD just seems more straightforward and easy.

ignore US-T bill first. do you know how a t-bill in general work? e.g., how SG t-bill work?

I think USD TT fee to DBS is about $10 only (charged by DBS). Haven't tried to do it from IBKR though. Not sure if IBKR charges anything on their end.

yes.

ibkr provides free withdrawal once a month

DBS USD FD minimum is 5k USD. Gotta place more than 250k USD for preferential rates. I asked DBS treasures if they have any promo rates but seems like they don't atm. She says she will get back to me though.

if you have dbs treasures the $10 is waived.

so yes, USD FD with DBS has a minimum. that is higher than the face value of US-T.

so there are a lot of different permutations. you are talking from the perspective of your own circumstances, while i am posting from the perspective of what is the most ideal logic, if you so happen to conform to the ideal circumstances.

but should you not, of course you have to look for the next best alternative.

 

[guzzler3]

ignore US-T bill first. do you know how a t-bill in general work? e.g., how SG t-bill work?

yes.

ibkr provides free withdrawal once a month

if you have dbs treasures the $10 is waived.

so yes, USD FD with DBS has a minimum. that is higher than the face value of US-T.

so there are a lot of different permutations. you are talking from the perspective of your own circumstances, while i am posting from the perspective of what is the most ideal logic, if you so happen to conform to the ideal circumstances.

but should you not, of course you have to look for the next best alternative.

Yea, been following the SG t-bill thread so have a pretty good understanding. Just unsure if it works the same on IBKR. I'm probably just the average retail investor on IBKR, buying funds/stocks only.

If DBS treasures has preferential rates for USD fixed deposits, I'll let you guys know. My USD was in maybank; I just transferred it over using cheque. It's free.

Agree that fixed deposit probably suits me better and that's why I'm in this thread. Appreciate your advices though

 

[reddevil0728]

Yea, been following the SG t-bill thread so have a pretty good understanding. Just unsure if it works the same on IBKR. I'm probably just the average retail investor on IBKR, buying funds/stocks only.

ok at least you have a basic idea of SG T-bill. US-T via IBKR is like secondary market which ppl hardly do for SG-T so can understand. something to be aware of, whether to explore another matter.

If DBS treasures has preferential rates for USD fixed deposits, I'll let you guys know. My USD was in maybank; I just transferred it over using cheque. It's free.

Agree that fixed deposit probably suits me better and that's why I'm in this thread. Appreciate your advices though

if you don't have money in IBKR, then yes makes sense to do FD as is. but if got money in IBKR then diff story

 

[guzzler3]

ok at least you have a basic idea of SG T-bill. US-T via IBKR is like secondary market which ppl hardly do for SG-T so can understand. something to be aware of, whether to explore another matter.

if you don't have money in IBKR, then yes makes sense to do FD as is. but if got money in IBKR then diff story

yea have some money on IBKR but not much, cashed out everything already. Some money left in SQQQ only. Don't dare to short too much too. Its pretty scary. Waiting for a bigger dip next year to buy back.

 

[reddevil0728]

yea have some money on IBKR but not much, cashed out everything already. Some money left in SQQQ only. Don't dare to short too much too. Its pretty scary. Waiting for a bigger dip next year to buy back.

so certain next year will have bigger dip?

in any case even without putting in US-T, the interest rate on unused cash also pretty decent. it's like 2.58%?