Going To Try US-T Bills

[happycanliao]

 

[item2sell]

How to do it

 

[reddevil0728]

How to do it

Can search US-T using ibkr

 

[rubicon]

need to pay withholding tax?

 

[reddevil0728]

need to pay withholding tax?

Is a discount not a dividend

 

[BBCWatcher]

need to pay withholding tax?

No, not unless you have a record of tax delinquency with the U.S. Internal Revenue Service (and thus are subject to mandatory tax withholding) or are a tax resident of some jurisdiction where withholding applies. Those are rare exceptions among residents of Singapore.

U.S. Treasuries individually held (i.e. not within a fund “wrapper”) are U.S. tax free when held by a non-U.S. person.

 

[Danger21]

Can search US-T using ibkr

hi any clue of how to do it? i see alot of selection from the list... 1st timer here and wish to buy us-t to get a better yield

 

[henrylbh]

To me not worth the look even at the bid price unless you are resident. Else need to consider or iron out issues like tax, forex, trx charges and estate and the trouble beneficiary got to go through as anything can happen before maturity, though short term.

 

[happycanliao]

To me not worth the look even at the bid price unless you are resident. Else need to consider or iron out issues like tax, forex, trx charges and estate and the trouble beneficiary got to go through as anything can happen before maturity, though short term.

Hmmm. I'll call ibkr to ask regarding all these.. thanks

 

[henrylbh]

Hmmm. I'll call ibkr to ask regarding all these.. thanks

The forex and trx cost alone will have eaten your gain even if held to maturity and exchange rates remain the same.

 

[celtosaxon]

To me not worth the look even at the bid price unless you are resident. Else need to consider or iron out issues like tax, forex, trx charges and estate and the trouble beneficiary got to go through as anything can happen before maturity, though short term.

I don’t believe estate taxes apply.
BBCW can probably confirm.

 

[happycanliao]

The forex and trx cost alone will have eaten your gain even if held to maturity and exchange rates remain the same.

I foresee USD will go up until 1.48. then I still earn forex

 

[henrylbh]

I foresee USD will go up until 1.48. then I still earn forex

USD has been creeping up the last more than a week and I also think it will be up as the Fed up interest rates and withg imported inflation over here. How much depends on gov interventions

 

[BBCWatcher]

To me not worth the look even at the bid price unless you are resident.

The U.S. dollar is the world's most popular currency, by far, and U.S. Treasuries are the safest place(s) to park U.S. dollars. They are extremely popular around the world.

Else need to consider or iron out issues like tax,

Individual U.S. Treasuries (not within a fund "wrapper") are completely U.S. tax free when held by non-U.S. persons.

forex,

The U.S. dollar is the world's most convertible currency. For example, every time you use your Singapore-issued debit or credit card to pay for something in some other currency your charge is converted to U.S. dollars.

Interactive Brokers also offers Singapore dollar to U.S. dollar currency conversions at extremely low cost.

trx charges

Extremely low at Interactive Brokers. At some U.S. brokers there's no charge to buy U.S. Treasuries.

and estate

There's no U.S. estate tax on U.S. Treasuries when held individually (not within a fund "wrapper") and when held by a non-U.S. person.

and the trouble beneficiary got to go through as anything can happen before maturity, though short term.

There's no additional difficulty for beneficiaries. U.S. Treasuries are treated like any/all other securities within your brokerage account. Beneficiaries can either wait for them to mature or sell them on the secondary market — the world's biggest and most liquid sovereign debt market, by far — as they prefer.

The forex and trx cost alone will have eaten your gain even if held to maturity and exchange rates remain the same.

That's very unlikely at Interactive Brokers for example.

U.S. Treasury Bills can be very appropriate for residents of Singapore who are looking for a short-term parking place for U.S. dollars. It could be for an anticipated upcoming U.S. dollar purchase (such as tuition at a U.S. university or a vacation in the U.S.) They're not for everyone, but they do have reasonable roles to play. Tenors are available as short as 4 weeks.

U.S. Treasuries are backed by the full faith and credit of the U.S. federal government. The minimum face value is US$100, so they're designed for investors/savers of all sizes. They're available in unlimited quantities with no monthly or per person cap. They're not oversubscribed, at least not for individuals (including extremely wealthy ones buying lots of U.S. Treasuries). Practically any broker can facilitate purchases and sales of U.S. Treasuries, although U.S. brokers such as Interactive Brokers tend to work much better than non-U.S. brokers. A minority of residents of Singapore might be eligible to open a TreasuryDirect account and buy/hold them directly with the U.S. Treasury. Both nominal and real return (inflation indexed) U.S. Treasuries are available, as you prefer.

 

[reddevil0728]

hi any clue of how to do it? i see alot of selection from the list... 1st timer here and wish to buy us-t to get a better yield

It depends specifically what you are looking for. there are a lot, hence not possible to cover ever scenario

To me not worth the look even at the bid price unless you are resident. Else need to consider or iron out issues like tax, forex, trx charges and estate and the trouble beneficiary got to go through as anything can happen before maturity, though short term.

Are you talking about withholding tax for dividends? you are buying at a discount. you don't get dividends.

trx min $5 if ibkr tiered. so of course need to depends on the size.

if you talking about estate taxes, BBCW covered it above. though I will still recommend to seek own personal tax advice. then again t-bill are mainly short term, unless you don't even invest in equity using IBKR at all then different story

Hmmm. I'll call ibkr to ask regarding all these.. thanks

Customer service ain't really in the position to address all that, those aren't really platform qns.

The forex and trx cost alone will have eaten your gain even if held to maturity and exchange rates remain the same.

if you already have idle USD in IBKR, forex is not an issue. trx i assume you mean transaction cost like commission? mentioned above.

I foresee USD will go up until 1.48. then I still earn forex

USD has been creeping up the last more than a week and I also think it will be up as the Fed up interest rates and withg imported inflation over here. How much depends on gov interventions

if you already have idle USD in IBKR, forex is not an issue.

 

[BBCWatcher]

I absolutely agree you should do your own diligence, including tax diligence, including both inside and outside Singapore.

Interestingly 4, 8, 13, and 26 week U.S. Treasuries evidently used to be U.S. estate taxable (when held by non-U.S. persons) up until about 10 years ago. The 52 week and longer tenors were not. (IRS Private LTR 9422001 is an interesting read.) The 2010 HIRE Act evidently corrected an arcane portion of the tax code that changed this. You can compare the current IRC‘s language to the prior IRC’s language described in LTR 9422001 to see how it changed in this respect. Have fun!

 

[henrylbh]

Regardless of what others say, you got to be sure of all the variables and cost affecting your decision to buy US financial instruments. At bid price, the difference in yield compared to Sg bills is simply not attractive enough for the start for me to delve into it and take a bet or take an arbitrage position.

 

[BBCWatcher]

Regardless of what others say, you got to be sure of all the variables and cost affecting your decision to buy US financial instruments. At bid price, the difference in yield compared to Sg bills is simply not attractive enough for the start for me to delve into it and take a bet or take an arbitrage position.

Henry, I think you’re assuming way too much here. In particular, U.S. dollars are often very useful even for “ordinary“ residents of Singapore. For example, someone who’s planning a Disney World vacation next year might very reasonably decide to buy a few thousand U.S. dollars worth of U.S. T-bills now so they can relax, knowing that their Disney World vacation is funded (and with some interest along the way). “Mickey, here we come!”

And did you know oil and gas are globally priced in U.S. dollars? Singapore imports all fossil fuels, and their prices vary right along with the U.S. dollar. People sign up for multi-year electricity contracts all the time. I don’t think it’s a crazy idea given the way energy markets work to hedge a bit via some U.S. dollars. To a small degree anyway.

How about university in the United States or other U.S. dollar-oriented country? Got 4 years of U.S. dollar tuition coming up starting next year? Parking some U.S. dollars might be a great idea.

Speculating in financial markets? Most securities are listed/quoted/traded in U.S. dollars. If you sell a security like that it really makes no sense to convert U.S. dollars to Singapore dollars, stuff the Singapore dollars in a 6 month Singapore T-bill, then convert back to buy whatever you’re waiting to buy. Just use a U.S. T-bill for that. (I don’t recommend you speculate in financial markets, but this’d be one reasonable way to do it.)

Want to back some broker margin you’ve accumulated to avoid a margin call or margin-forced liquidation? U.S. Treasuries are great for that!

Want the world’s best inflation-indexed bond that even has some relevance to the cost of living in Singapore (since Singapore is such a small, open economy)? TIPS are really rather good in that role. The Monetary Authority of Singapore doesn’t offer any inflation-indexed bonds.

Buying a vacation home in the U.S., but not yet? U.S. Treasuries are great for parking funds.

Do you run an online business? Maybe you peddle stuff on eBay, and you’ll need some working capital to buy stuff a few months from now — stuff that’s priced in U.S. dollars. U.S. Treasuries are great for you, too, to park funds for a while.

Do you collect baseball cards (Major League Baseball)? Or DC comic books? And you expect to buy US$10,000 worth next year and want to park some U.S. dollars for a while to fund your hobby? U.S. Treasuries!

U.S. Treasuries really aren’t exotic. There are many reasons why you might buy some, and I’m just providing a partial list here.

 

[reddevil0728]

Regardless of what others say, you got to be sure of all the variables and cost affecting your decision to buy US financial instruments. At bid price, the difference in yield compared to Sg bills is simply not attractive enough for the start for me to delve into it and take a bet or take an arbitrage position.

Makes sense if you already have idle US-T. If not agreed that it might not be worth the effort.

Henry, I think you’re assuming way too much here. In particular, U.S. dollars are often very useful even for “ordinary“ residents of Singapore. For example, someone who’s planning a Disney World vacation next year might very reasonably decide to buy a few thousand U.S. dollars worth of U.S. T-bills now so they can relax, knowing that their Disney World vacation is funded (and with some interest along the way). “Mickey, here we come!”

And did you know oil and gas are globally priced in U.S. dollars? Singapore imports all fossil fuels, and their prices vary right along with the U.S. dollar. People sign up for multi-year electricity contracts all the time. I don’t think it’s a crazy idea given the way energy markets work to hedge a bit via some U.S. dollars. To a small degree anyway.

How about university in the United States or other U.S. dollar-oriented country? Got 4 years of U.S. dollar tuition coming up starting next year? Parking some U.S. dollars might be a great idea.

Speculating in financial markets? Most securities are listed/quoted/traded in U.S. dollars. If you sell a security like that it really makes no sense to convert U.S. dollars to Singapore dollars, stuff the Singapore dollars in a 6 month Singapore T-bill, then convert back to buy whatever you’re waiting to buy. Just use a U.S. T-bill for that. (I don’t recommend you speculate in financial markets, but this’d be one reasonable way to do it.)

Want to back some broker margin you’ve accumulated to avoid a margin call or margin-forced liquidation? U.S. Treasuries are great for that!

Want the world’s best inflation-indexed bond that even has some relevance to the cost of living in Singapore (since Singapore is such a small, open economy)? TIPS are really rather good in that role. The Monetary Authority of Singapore doesn’t offer any inflation-indexed bonds.

Buying a vacation home in the U.S., but not yet? U.S. Treasuries are great for parking funds.

Do you run an online business? Maybe you peddle stuff on eBay, and you’ll need some working capital to buy stuff a few months from now — stuff that’s priced in U.S. dollars. U.S. Treasuries are great for you, too, to park funds for a while.

Do you collect baseball cards (Major League Baseball)? Or DC comic books? And you expect to buy US$10,000 worth next year and want to park some U.S. dollars for a while to fund your hobby? U.S. Treasuries!

U.S. Treasuries really aren’t exotic. There are many reasons why you might buy some, and I’m just providing a partial list here.

Regardless of what others say, you got to be sure of all the variables and cost affecting your decision to buy US financial instruments. At bid price, the difference in yield compared to Sg bills is simply not attractive enough for the start for me to delve into it and take a bet or take an arbitrage position.

Henry, I think you’re assuming way too much here. In particular, U.S. dollars are often very useful even for “ordinary“ residents of Singapore. For example, someone who’s planning a Disney World vacation next year might very reasonably decide to buy a few thousand U.S. dollars worth of U.S. T-bills now so they can relax, knowing that their Disney World vacation is funded (and with some interest along the way). “Mickey, here we come!”

And did you know oil and gas are globally priced in U.S. dollars? Singapore imports all fossil fuels, and their prices vary right along with the U.S. dollar. People sign up for multi-year electricity contracts all the time. I don’t think it’s a crazy idea given the way energy markets work to hedge a bit via some U.S. dollars. To a small degree anyway.

How about university in the United States or other U.S. dollar-oriented country? Got 4 years of U.S. dollar tuition coming up starting next year? Parking some U.S. dollars might be a great idea.

Speculating in financial markets? Most securities are listed/quoted/traded in U.S. dollars. If you sell a security like that it really makes no sense to convert U.S. dollars to Singapore dollars, stuff the Singapore dollars in a 6 month Singapore T-bill, then convert back to buy whatever you’re waiting to buy. Just use a U.S. T-bill for that. (I don’t recommend you speculate in financial markets, but this’d be one reasonable way to do it.)

Want to back some broker margin you’ve accumulated to avoid a margin call or margin-forced liquidation? U.S. Treasuries are great for that!

Want the world’s best inflation-indexed bond that even has some relevance to the cost of living in Singapore (since Singapore is such a small, open economy)? TIPS are really rather good in that role. The Monetary Authority of Singapore doesn’t offer any inflation-indexed bonds.

Buying a vacation home in the U.S., but not yet? U.S. Treasuries are great for parking funds.

Do you run an online business? Maybe you peddle stuff on eBay, and you’ll need some working capital to buy stuff a few months from now — stuff that’s priced in U.S. dollars. U.S. Treasuries are great for you, too, to park funds for a while.

Do you collect baseball cards (Major League Baseball)? Or DC comic books? And you expect to buy US$10,000 worth next year and want to park some U.S. dollars for a while to fund your hobby? U.S. Treasuries!

U.S. Treasuries really aren’t exotic. There are many reasons why you might buy some, and I’m just providing a partial list here.

Actually somehow I think you are the one assuming too much? Just looking at the amount you typed vis-a-vis what you are reply to.

 

[henrylbh]

Who is assuming way too much and bringing in a host of irrelevant factors. If you are buying for purpose of visiting Disney Land for example, I got no say. Even if you are buying on hunch that USD is likely to go up, I got no say No need to add to a partial list of garbage