The next 6 months T-bill's auction is happening this Thursday.
So, if we are building or maintaining a T-bill ladder, don't forget to put in a bid.
I will be putting in a non-competitive bid again.
No reason to agonize over how much to bid for in a competitive bid when chances are any cut-off yield is likely to be higher than offers from the banks for a 6 months fixed deposit for now.
I just produced a video on a 3.6% per annum offer for a fixed deposit but that is for a 9 months tenure.
This is the link to the video for readers who do not follow me on YouTube:
Locking in 3.6% per annum for the next 9 months.
Cut-off yields for 6 months T-bill so far have stayed above 3.7% per annum.
However, it seems to be declining.
In January, we saw a 4.2% cut-off yield.
This month, we saw 3.73% which was the lowest cut-off yield this year.
Like I said in a podcast, interest rates are higher now but they are unlikely to stay high forever.
As investors for income, I did not get to where I am by relying on fixed income to grow my wealth.
However, I am not going to reject relatively attractive risk free and volatility free returns while they stick around.
If AK can do it, so can you!
Hi AK! I have an outstanding mortgage and monies in my OA. I've tried for Tbills but not so lucky when putting in competitive bid - either I put too high, or not all my CPF OA was used. My mortgage is floating on SORA+0.7 which brings me to about 4.2% and climbing! Please talk to yourself... should I use CPF OA to pay back. my mortgage partially?
ReplyDeleteHi gagmewithaspoon,
ReplyDeleteAlamak! You are a regular reader of my blog.
You know I cannot give personalized advice like this.
So scared I kena invited by the authorities to lim kopi. -.-"
I can only say I cannot be sure that interest rates will stay relatively high forever.
Experts I have read are expecting interest rates to decline in 2024. Hmm.
heh that is why I said talk to yourself... my heart pain when I see my mortgage payments. last time I read experts, they said 2023 decline.. my neck too long.
ReplyDeleteHi gagmewithaspoon,
ReplyDeleteAK can understand heart pain.
I remember the time when I had a pretty large mortgage when I bought my first home.
Interest rate went from 2.1% to 5.1% in a just 3 years.
On a larger sum of money, it was a big deal.
I always say peace of mind is priceless and if you feel better paying off the mortgage, maybe, you should.
Frankly, if the mortgage is a smaller sum, the increase in monthly payment isn't too bad.
It is those people who overstretch their finances to buy their dream home who should worry.
Hi hi
ReplyDeleteToday's results still decent at 3.7%.
Hi Yv,
ReplyDeleteIn a recent video, I said I would be quite happy if the cut-off yield was 3.7% too.
So prophetic. ;p