Going To Try US-T Bills

[pai000000]

I have surveyed a few of them. The bid ask spread can be 2% difference. Kind of no point buying at low discount of 1+% where Singapore T-Bills are offering 3+%. Any recommendation which one is good?

Foreigners can buy from Treasurydirect.gov but I am not exactly sure of the details to register. Who can help?

When I open the order entry for some t-bills on TWS, the spread is very small, like only 0.1% different in bid and ask yield. Where did you see the 2% spread?

 

[bearkia]

If buy using IBKR, is the minimum 5 dollars? Then cannot buy too little.

 

[reddevil0728]

If buy using IBKR, is the minimum 5 dollars? Then cannot buy too little.

ya need to buy enough

 

[revhappy]

It seems lot of talk on this thread about buying T Bills using IBKR but no action
I am planning to put 80K SGD into IBKR and convert to USD and then buy 6 month T-bills.
Current yield is around 4.7% which seems awesome.
Imagine if you try to replicate this with a USD fixed deposit with a Singapore bank, you get hit on both sides with commission and then you are locked in with penalties if you break early.

With IBKR, fx fee is like a fraction. commission to buy the bonds is 2bps.
Minimum size is $1000.

I just wonder on maturity, will the bond proceeds automatically be credited to our IBKR account?

 

[milkfish]

It seems lot of talk on this thread about buying T Bills using IBKR but no action
I am planning to put 80K SGD into IBKR and convert to USD and then buy 6 month T-bills.
Current yield is around 4.7% which seems awesome.
Imagine if you try to replicate this with a USD fixed deposit with a Singapore bank, you get hit on both sides with commission and then you are locked in with penalties if you break early.

With IBKR, fx fee is like a fraction. commission to buy the bonds is 2bps.
Minimum size is $1000.

I just wonder on maturity, will the bond proceeds automatically be credited to our IBKR account?

I recommend selling before maturity, because last 1 month the yield is probably way lower, so you can "save some time" so to speak.

 

[revhappy]

I recommend selling before maturity, because last 1 month the yield is probably way lower, so you can "save some time" so to speak.

Yes, yield is a function of price. So provided there is high demand from others to buy this just before maturity, the yield will be low. Very interesting. I have seen bonds on FSM, but never traded them. But IBKR seems much more liquid and hence more feasible.

 

[reddevil0728]

It seems lot of talk on this thread about buying T Bills using IBKR but no action
I am planning to put 80K SGD into IBKR and convert to USD and then buy 6 month T-bills.
Current yield is around 4.7% which seems awesome.
Imagine if you try to replicate this with a USD fixed deposit with a Singapore bank, you get hit on both sides with commission and then you are locked in with penalties if you break early.

With IBKR, fx fee is like a fraction. commission to buy the bonds is 2bps.
Minimum size is $1000.

I just wonder on maturity, will the bond proceeds automatically be credited to our IBKR account?

Actually not sure how you conclude no action leh. Not everybody likes to post about their action what

But unless you are needing of USD in future, it may not make sense?

you are changing sgd into usd at a high rate. In future when yield starts to go down, the exchange rate will also likely go down, you might end yo with a FX loss.

and not sure why so anybody ppl seems to have qns over what will happen at maturity. Ain’t it quite straight forward that it will just be auto?

 

[revhappy]

Actually not sure how you conclude no action leh. Not everybody likes to post about their action what

But unless you are needing of USD in future, it may not make sense?

you are changing sgd into usd at a high rate. In future when yield starts to go down, the exchange rate will also likely go down, you might end yo with a FX loss.

and not sure why so anybody ppl seems to have qns over what will happen at maturity. Ain’t it quite straight forward that it will just be auto?

Not sure, how IBKR treats maturing T bills. But clearly this is not a popular investing option here in Singapore. I haven't seen any blogger blog about it. Very uncharted territory.

Regarding why keep USD, it is useful in case of markets crash USD goes up. Right now markets in fomo mode and wants to go up. VIX is at the bottom. But if markets crash, for sure USD will shoot up and then we can use it to buy IWDA also. So it is very useful.

 

[milkfish]

Having said that, for small amount perhaps DBS fixed deposit for USD is fine, already 4+% also, without any hassle if you already have USD.

 

[milkfish]

Not sure, how IBKR treats maturing T bills. But clearly this is not a popular investing option here in Singapore. I haven't seen any blogger blog about it. Very uncharted territory.

Regarding why keep USD, it is useful in case of markets crash USD goes up. Right now markets in fomo mode and wants to go up. VIX is at the bottom. But if markets crash, for sure USD will shoot up and then we can use it to buy IWDA also. So it is very useful.

People who would go this route is probably less than 5% of people who would do SGD Tbills. Only more sophisticated folks do this, as IB also have some requirements. And people who are sophisticated investors probably don't need to read such blogs.

Regarding USD vs SGD, right now USD is quite high against SGD. Whether that risk is worth the ~0.8% in yield, is up to you. I personally hedge my bets so I have both USD and SGD. I'm trying to maximize both my USD and SGD returns.

 

[reddevil0728]

Not sure, how IBKR treats maturing T bills. But clearly this is not a popular investing option here in Singapore. I haven't seen any blogger blog about it. Very uncharted territory.

Tbh not conclusive. Ppl not posting about it does not necessary mean it’s not popular in terms of sure scale of investment which we wouldn’t know.

Regarding why keep USD, it is useful in case of markets crash USD goes up. Right now markets in fomo mode and wants to go up. VIX is at the bottom. But if markets crash, for sure USD will shoot up and then we can use it to buy IWDA also. So it is very useful.

Oh am not doubting that.

man just saying on makes sense if you need usd in future. In your use case it makes sense.

make zero sense if ppl want to change to usd just for higher yield then change back later.

 

[reddevil0728]

People who would go this route is probably less than 5% of people who would do SGD Tbills. Only more sophisticated folks do this, as IB also have some requirements. And people who are sophisticated investors probably don't need to read such blogs.

Regarding USD vs SGD, right now USD is quite high against SGD. Whether that risk is worth the ~0.8% in yield, is up to you. I personally hedge my bets so I have both USD and SGD. I'm trying to maximize both my USD and SGD returns.

Tbh any % is just a wild guess without any stats

 

[revhappy]

BTW, it seems we can also buy new primary issuances of T-bill also from brokerages.
Fidelity is much more popular in the US and hence there are more videos and examples of how to buy new T-bills from Fidelity, rather than from IBKR. But I would imagine the process should be the same for IBKR and also for Singapore residents? @BBCWatcher @celtosaxon

 

[revhappy]

I did some searching. It seems IBKR doesnt offer primary issuance of T-bill or T-Bonds
Why is that?
Only Fidelity, Schwab, Vanguard can offer? @BBCWatcher @celtosaxon

 

[milkfish]

I did some searching. It seems IBKR doesnt offer primary issuance of T-bill or T-Bonds
Why is that?
Only Fidelity, Schwab, Vanguard can offer? @BBCWatcher @celtosaxon

Difference is quite small between primary issuance and secondary market. Easier to use secondary market because you can pick from any issuance and expiry.

 

[Niaoson]

Also thinking about it but tried typing US-T and too many options appeared hahah

 

[reddevil0728]

Also thinking about it but tried typing US-T and too many options appeared hahah

it's actually easier to identify using https://www.treasurydirect.gov/ to look at the yield and maturity date. then search the CUSIP to buy

 

[BBCWatcher]

I did some searching. It seems IBKR doesnt offer primary issuance of T-bill or T-Bonds
Why is that?
Only Fidelity, Schwab, Vanguard can offer? @BBCWatcher @celtosaxon

Of course TreasuryDirect.gov works if you’re eligible for an account (U.S. Social Security Number, U.S. mailing address, U.S. bank or credit union account).

TD Ameritrade might also offer new issue U.S. Treasuries. They say they do, but I haven’t seen any reports of anyone in Singapore with a TD Ameritrade account opened in Singapore who has tried it. (Reports welcome!)

Firstrade offers U.S. Treasuries, but it’s unclear if they offer new issues or only secondary market access. However, Firstrade doesn’t facilitate any currency conversions. You’ll need a bank (usually) to handle that part.

Schwab operates in certain countries outside the U.S., but unfortunately Singapore isn’t one of them. They offer new issue U.S. Treasuries.

HSBC and Citibank may be able to arrange new issue U.S. Treasuries for you from Singapore since they have U.S. affiliates that are primary dealers. However, you’ll probably have to be a wealth management client.

 

[gnooliew]

Actually would it also make sense to buy a ETF that holds US T bills or short term govt bonds?

 

[reddevil0728]

Actually would it also make sense to buy a ETF that holds US T bills or short term govt bonds?

bond fund and the bond itself got diff features. best to understand what you are getting yourself into