Singapore Treasury bills (T-bills)

reddevil0728

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How is it that u only lose 7 mths of CPF interest? I tot the months where your CPF $$ gets deducted or credited back in will not have any interest? So effectively moving in & out CPF monies from CPF acct in separate months, u will lose at least 2mths of interest.
Eg. Let's say in Sep u applied for T-bills & was successful, if CPF gets deducted in Sep to pay Tbills, regardless of any period in Sep, tat amt will not earn interest for CPF in Sep. After 6 mths, redeem from Tbills, that month when CPF credits back in, also no CPF interest. So its 2 mths of no interest fr CPF.
lets use 2 examples

BS22118H
Auction Date: 15 Sep 22
Issue Date: 20 Sep 22
Maturity Date: 21 Mar 23

Assume you apply 14 Sep and it gets deducted the same day
No interest in

Sep - 1
Oct - 2
Nov - 3
Dec - 4
Jan - 5
Feb - 6
Mar - 7

BS22119T
Auction Date: 29 Sep 22
Issue Date: 4 Oct 22
Maturity Date: 4 Apr 23

Assume you apply 18 Sep and it gets deducted the same day
No interest in

Sep - 1
Oct - 2
Nov - 3
Dec - 4
Jan - 5
Feb - 6
Mar - 7
Apr - 8
 

milkfish

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Just realised that amount offered next 6mo tbill is only 4billion. Couple months ago it was about 4.6billion. I think they're trying to control the rate a bit, not letting it go too high too quickly.
 

F1ngolf2012

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There are no fees for cash and SRS account when it comes to T-bills. Fees only apply to CPF application.

Oh that's nice to hear! Thanks. First time applying. Submitted non competitive bid. Hopefully bidders all bid higher than last issue's cut off yield.

I thought for sure there will be fee involved lor
To be exact, there is a $2 fee which is waived for T-bill application. ;) The banks reserve the rights to do away the fee waiver as and when they decide to do so.
 

F1ngolf2012

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Actually deducting gross or nett not really a big thing.

The real damage is DBS deduct on date of application and OCBC 2 days after auction date. Take the current issue as an example. DBS will deduct in Sep while OCBC has good chance of deducting 1 Oct. So those on DBS lose 8 mths CPF interest.
Do you mean people who apply via DBS lose additional 1 month of CPF interest versus applying via OCBC? :unsure:
 

reddevil0728

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Do you mean people who apply via DBS lose additional 1 month of CPF interest versus applying via OCBC? :unsure:
because apparently DBS deduct upfront. so depending on which issue of T-bill you applied, they might deduct in the last few days of the month and then you kena 1 less month of CPF interest
 

F1ngolf2012

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because apparently DBS deduct upfront. so depending on which issue of T-bill you applied, they might deduct in the last few days of the month and then you kena 1 less month of CPF interest
Yup! I'm aware of this i.e. lose additional 1 month CPF interest for those applying via DBS versus OCBC/UOB.
I first read vsvs24's post which seems to be saying those applying via DBS will lose 8 months CPF interest versus applying via OCBC/UOB. :)
 

reddevil0728

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Yup! I'm aware of this i.e. lose additional 1 month CPF interest for those applying via DBS versus OCBC/UOB.
I first read vsvs24's post which seems to be saying those applying via DBS will lose 8 months CPF interest versus applying via OCBC/UOB. :)
ya depending on circumstances
 

F1ngolf2012

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Actually deducting gross or nett not really a big thing.

The real damage is DBS deduct on date of application and OCBC 2 days after auction date. Take the current issue as an example. DBS will deduct in Sep while OCBC has good chance of deducting 1 Oct. So those on DBS lose 8 mths CPF interest.
I spoke to DBS via the hotline again, and this time got them to look into how they've been handling the CPF deduction. After they looked into the process, they acknowledged that they were using the old method (deduct on application date) and will switch to the new method (deduct on auction date) starting with this week's T-Bill.

I also asked about the CDP affirmation fee and that the other banks don't charge it. The customer service staff asked for a screenshot showing the fees from either of the other two banks so that he can look into the matter. Can anyone share a screenshot?
Just fyi, it might still be safer not to apply for this week's T-Bill if using DBS CPF investment account. They said they'd deduct on auction date (misheard as option date) rather than application date, and this T-Bill auction date is 29 Sep. Might still have the same problem of losing 8 months interest instead of 7 months, but it'll hopefully be the discounted amount instead of the full amount.
Am I correct to say that DBS is going to deduct on auction date only for applications which are successful in the auction? This is a huge difference for people who apply large amount using comp bid especially when their bids are unsuccessful.
 

reddevil0728

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Am I correct to say that DBS is going to deduct on auction date only for applications which are successful in the auction? This is a huge difference for people who apply large amount using comp bid especially when their bids are unsuccessful.
according to experience, DBS deducts on application date and credit the discount later.

while ocbc and Uob (screenshot of a facebook), deducts the net amount a few days before issue date
 

F1ngolf2012

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according to experience, DBS deducts on application date and credit the discount later.

while ocbc and Uob (screenshot of a facebook), deducts the net amount a few days before issue date
I did not consider using CPF to apply for T-bill because of DBS's deduction is on application date as I would only want to submit comp bid.

@Geralt posted that DBS is going to change their old method of deducting on application date to deducting on auction date. :unsure: If they have indeed changed to deducting on auction date for those who are successful, then I would consider applying. Just want to know if this is the case. :unsure:
 

reddevil0728

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I did not consider using CPF to apply for T-bill because of DBS's deduction is on application date as I would only want to submit comp bid.

@Geralt posted that DBS is going to change their old method of deducting on application date to deducting on auction date. :unsure: If they have indeed changed to deducting on auction date for those who are successful, then I would consider applying. Just want to know if this is the case. :unsure:
tbh i wonder how long it will take for them to make the change. cause it seems like from customer service. it might just be a holding reply
 

Geralt

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according to experience, DBS deducts on application date and credit the discount later.

while ocbc and Uob (screenshot of a facebook), deducts the net amount a few days before issue date
DBS staff that I spoke to on the phone said that they'll change the way they deduct the money, starting with this week's T-bill application, after I had sent in my CPF statement which showed that they deducted on application date. For some reason their records showed that the deduction was to happen on auction date for the discounted amount, but I told them that that the full amount was deducted earlier and I had to transfer the refund myself back to CPF, and so had to email them the CPF statement with dates. I flagged that the other banks deducted only discounted amount closer to settlement date, and that DBS customers ultimately will lose out and potential customers would obviously go for other banks. The staff told me that the team had a discussion on that very day after my email and decided to change it to take place on auction date.

I will be doing another T-bill application next month to test whether it still deducts on application date, auction date, or some other date. Given that the auction date for this week's T-bill is this month rather than next month, this new change by DBS doesn't solve the 8 month loss for interest, but hopefully it's no longer the full amount.
 

F1ngolf2012

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tbh i wonder how long it will take for them to make the change. cause it seems like from customer service. it might just be a holding reply
I'm leaning to similar thought as yours. I may ask my RM officially on this as I don't want to have a unsuccessful comp bid using CPF OA and lost the 1 month CPF interest + fees.
 

reddevil0728

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DBS staff that I spoke to on the phone said that they'll change the way they deduct the money, starting with this week's T-bill application, after I had sent in my CPF statement which showed that they deducted on application date. For some reason their records showed that the deduction was to happen on auction date for the discounted amount, but I told them that that the full amount was deducted earlier and I had to transfer the refund myself back to CPF, and so had to email them the CPF statement with dates. I flagged that the other banks deducted only discounted amount closer to settlement date, and that DBS customers ultimately will lose out and potential customers would obviously go for other banks. The staff told me that the team had a discussion on that very day after my email and decided to change it to take place on auction date.

I will be doing another T-bill application next month to test whether it still deducts on application date, auction date, or some other date. Given that the auction date for this week's T-bill is this month rather than next month, this new change by DBS doesn't solve the 8 month loss for interest, but hopefully it's no longer the full amount.
wah they action so fast. please update if that's really the case. thanks!
 
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