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Updated plan as yield plunged on 6 months T-bill!

Thursday, February 1, 2024

It could be a sign of things to come.

Cut-off yield in the latest 6 months T-bill auction was 3.54% p.a.

That is a huge decline from 3.7% p.a. seen in the prior auction.

100% of my non-competitive bid was filled.

3.54% p.a. is still decent but it is similar to what I am able to get from 6 months fixed deposits now.

I have a few fixed deposits maturing this month and I will be renewing them at 3.55% p.a. interest rate for a 6 months tenure with CIMB.

I have talked to myself about when to dismantle the T-bill ladder.

The plan is to dismantle the ladder when Mr. Market goes into a depression.

However, if the cut-off yield becomes significantly lower than what I could get from 6 months fixed deposits, then, I could dismantle the ladder too.

Place fixed deposits instead of buying T-bills.

Still laddering but with fixed deposits instead.

As for CPF OA money, I would simply leave the money undeployed if cut-off yield goes under 3.5% p.a. which is where I would place my competitive bids.

This is why I said it makes sense to transfer the funds from CPF IA to CPF OA when I did.

It is for in case I am unsuccessful in getting T-bills at the cut-off yield which is meaningful to me.

Where are things going?

So, it seems that T-bill cut-off yield is trending lower.

This is probably in response to dovish statements from the Fed and also the ECB on possible interest rate cuts this year.

Just have to roll with the punches and adapt.

If AK can roll, so can you!

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Yv said...


AK, as my last two bids was not fully allotted, I was afraid that history would repeat itself and so stashed half of what I had originally set aside and placed with CIMB at 3.5% yesterday.

To my surprise, I got full allotment this time round at 3.54%. Quite disappointing.

Time to explore OCBC360 but that one; many hoops to jump

AK71 said...

Hi Yv,

I much prefer UOB ONE.

5% p.a. on a $100K deposit.

Easier to attain 5% p.a. too.

CIMB makes it very easy to place FDs with their phone app and I like that they are more generous with interest rates too. :)

Well, don't feel too bad.

50% at 3.5% p.a. and 50% at 3.54% p.a. gives you an average of 3.52% p.a.

Still good. :D

C wong said...


I saw std chartered is offering 3.6% which is higher that CIMB.

AK71 said...

Hi C wong,

Thanks for sharing this.

However, CIMB is really convenient for me since I have an existing relationship with them.

So, I will settle for 3.55% p.a. especially when I don't have that much excess cash to park this month.

s2nw2g said...

Hi AK,

I currently invest in 6 mths T Bill, using my CPF OA. It will mature on 2nd Apr. To compare interest earned from the next tbill vs OA, can I assume I don't lose any for OA? So that my cut off yield if based on 6 vs 6, and not 6 (Tbill) vs 7 (OA).

AK71 said...

Hi s2nw2g,

We will lose out on at least 7 months of OA interest whenever we buy a 6 months T-bill using CPF OA money.

We run the risk of losing 8 months of OA interest if we buy a 6 months T-bill that matures at the end of the month.

This is because CPF uses the lowest balance in any month for the purpose of calculating interest for that month.

So, the cut-off yield in order to breakeven is a minimum of 2.92% p.a but I would go for 3.33% p.a. to be safer.

s2nw2g said...


AK, but since I already have it out of my OA, I already lost that 1 mth earlier. Subscribing t bill again or put back, I thought I at least get some interest in Apr fr Tbill, vs nothing for OA.

AK71 said...

Hi s2nw2g,

As long as it works for you and you feel happy with the strategy, all is well. :)

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