The results for the 6 months T-bill auction came out at 5pm or so.
I made a short video on this soon after.
In a nutshell, I was disappointed.
I did make a video a few days ago saying that we could see 3.88% p.a. based on the daily SGS prices and yields published by the MAS.
Of course, I didn’t expect an exact match but 3.75% is even lower than the auction that took place one month ago.
That gave 3.87% p.a.
The last time it was lower was 2 months ago in September at 3.73% p.a.
Anyway, as I was using cash, I just placed a non-competitive bid.
This is so that I would get at least some of my application filled if there was a high level of interest.
Well, only 95% were allotted.
This means that if we had applied for $20K, we would get a refund of $1K.
To be fair, a cut-off yield of 3.75% p.a. is not bad.
It is still more than what most 6 months fixed deposits would pay, and if we consider the fact that the interest is paid at the start of the duration, it is actually more than 3.75% p.a.
So, disappointed I may be but not too much so.
Think positive!
Better for my mental health!
As for people using CPF-OA money, I always say to do competitive bidding because we do not want to be a victim of the unthinkable.
I have said in the past that a sensible competitive bid would be one that would not cause us to lose out on interest income in the end.
So, using CPF-OA money, the break-even is about 3.33% p.a. and since we should be aiming for more than breakeven, a competitive bid of 3.5% p.a. makes sense.
(3.33% p.a. takes into consideration the possibility of losing 8 months of CPF-OA interest.)
To be honest, unless the amount is significant, the difference in interest income is not going to be very meaningful.
I think this is not hard to understand.
So, I wouldn’t be too worried if the amount of CPF-OA money involved is, say, less than $50K.
So, until the next T-bill auction, it is back to my games.
If AK can do it, so can you!
