{"id":2941,"date":"2024-07-09T18:58:10","date_gmt":"2024-07-09T10:58:10","guid":{"rendered":"https:\/\/www.wealthfor.us\/article\/?p=2941"},"modified":"2024-07-09T18:58:10","modified_gmt":"2024-07-09T10:58:10","slug":"t-bill-bs24113n-cut-off-yield-declined-to-3-7","status":"publish","type":"post","link":"https:\/\/www.wealthfor.us\/article\/t-bill-bs24113n-cut-off-yield-declined-to-3-7\/","title":{"rendered":"T-Bill BS24113N Cut-Off Yield Declined to 3.7%"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The <\/span><a href=\"https:\/\/www.mas.gov.sg\/bonds-and-bills\/auctions-and-issuance-calendar\/auction-t-bill?issue_code=BS24113N&amp;issue_date=2024-07-09\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">auction<\/span><\/a><span style=\"font-weight: 400;\"> result for T-bill BS24113N concluded with a cut-off yield of 3.7%, a slight decline from the <\/span><a href=\"https:\/\/www.wealthfor.us\/article\/latest-t-bill-bs24112w-yield-steady-at-3-74\/\"><span style=\"font-weight: 400;\">previous auction&#8217;s 3.74%<\/span><\/a><span style=\"font-weight: 400;\">. Did you manage to get your desired allocation?<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2>Auction Result<\/h2>\n<p><span style=\"font-weight: 400;\">Please note that this T-bill BS24113N auction offered a slightly lower allotment of $6.5 billion, down from $6.6 billion in the previous auction.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Here is the result summary:<\/span><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-2942\" src=\"https:\/\/www.wealthfor.us\/article\/wp-content\/uploads\/2024\/07\/T-bill-BS24113N-auction-summary.png\" alt=\"T-bill BS24113N auction summary\" width=\"524\" height=\"715\" srcset=\"https:\/\/cdn.wealthfor.us\/uploads\/2024\/07\/T-bill-BS24113N-auction-summary.png 524w, https:\/\/cdn.wealthfor.us\/uploads\/2024\/07\/T-bill-BS24113N-auction-summary-220x300.png 220w\" sizes=\"auto, (max-width: 524px) 100vw, 524px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h2>Yield Fell Slightly<\/h2>\n<p><span style=\"font-weight: 400;\">The yield on this T-bill BS24113N declined slightly but stayed relatively steady at 3.70%. The previous auction saw the yield at 3.74%. Despite the decline, the current T-bill yield remains among the highest in recent years.<\/span><\/p>\n<figure id=\"attachment_2943\" aria-describedby=\"caption-attachment-2943\" style=\"width: 644px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2943 size-full\" src=\"https:\/\/www.wealthfor.us\/article\/wp-content\/uploads\/2024\/07\/T-bill-historical-yield-early-Jul-2024.png\" alt=\"T-bill historical yield early Jul 2024\" width=\"644\" height=\"343\" srcset=\"https:\/\/cdn.wealthfor.us\/uploads\/2024\/07\/T-bill-historical-yield-early-Jul-2024.png 644w, https:\/\/cdn.wealthfor.us\/uploads\/2024\/07\/T-bill-historical-yield-early-Jul-2024-300x160.png 300w\" sizes=\"auto, (max-width: 644px) 100vw, 644px\" \/><figcaption id=\"caption-attachment-2943\" class=\"wp-caption-text\">Source: <a href=\"https:\/\/www.wealthfor.us\/article\/singapore-t-bill-interest-rate\/\">Singapore T-bill Historical Interest Rates<\/a><\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">The above chart shows the historical T-bill yield chart back to early 2022. The yield was still below 1% then! The current yield of 3.70% has been in the range we have been in since early 2023. The question is, how much longer will we see this higher yield?<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While there is no way to predict with certainty, we can see where the Fed and the market expect interest rates to go.<\/span><\/p>\n<figure id=\"attachment_2932\" aria-describedby=\"caption-attachment-2932\" style=\"width: 483px\" class=\"wp-caption aligncenter\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2932 size-full\" src=\"https:\/\/www.wealthfor.us\/article\/wp-content\/uploads\/2024\/07\/Market-interest-rate-expectations-Jul-2024.png\" alt=\"Market interest rate expectations Jul 2024\" width=\"483\" height=\"248\" srcset=\"https:\/\/cdn.wealthfor.us\/uploads\/2024\/07\/Market-interest-rate-expectations-Jul-2024.png 483w, https:\/\/cdn.wealthfor.us\/uploads\/2024\/07\/Market-interest-rate-expectations-Jul-2024-300x154.png 300w\" sizes=\"auto, (max-width: 483px) 100vw, 483px\" \/><figcaption id=\"caption-attachment-2932\" class=\"wp-caption-text\">Source: <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html\" target=\"_blank\" rel=\"noopener\">CME Group<\/a><\/figcaption><\/figure>\n<p><span style=\"font-weight: 400;\">The chart above shows where the market expects interest rates to be for the next several months. The market expects interest rates to reverse toward the end of this year and even further rate cuts in 2025. The Fed has also hinted at possible rate cuts toward the end of this year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Do you agree with this expectation? If so, now can be your opportunity to lock in the higher rates while they last.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2>Demand Climbed Further<\/h2>\n<p><span style=\"font-weight: 400;\">We saw yet another high-demand auction, this time for T-bill BS24113N, at $15.6 billion. This is even higher than the previous auction&#8217;s $15.5 billion, which recorded a jump of $1.3 billion! This higher demand can be attributed to the relatively higher yield from T-bills and the lack of alternatives for short-term &#8216;almost&#8217; risk-free investment.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We also witnessed another elevated demand from non-competitive bidders as the cap was hit again. Non-competitive bidders only got ~70% of their allocation. This trend of higher non-competitive bids has been occurring for quite a while, so if you want to ensure that you can secure your full desired allocation, competitive bids may be the option that you should consider.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2>Alternatives<\/h2>\n<p><span style=\"font-weight: 400;\">As mentioned, T-bills have had little competition recently, as alternatives with similar risk profiles offer less competitive rates. Let&#8217;s look into some of them.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Fixed Deposits<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Fixed deposits have been one of the more prevalent alternatives to T-bills due to their short-term nature and guaranteed rates. Unfortunately, <\/span><a href=\"https:\/\/www.wealthfor.us\/article\/best-fixed-deposit-rates-singapore\/\"><span style=\"font-weight: 400;\">fixed deposit rates in Singapore<\/span><\/a><span style=\"font-weight: 400;\"> have not been too competitive recently. As of this writing, the best 6-month fixed deposit rate is 3.35%, offered by CIMB Bank. The best 3-month fixed deposit rate is 3.5%, provided by the Bank of China. Yeah, they could be more competitive.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Cash Management Accounts<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Although their risk profiles differ, we also like to look into <\/span><a href=\"https:\/\/www.wealthfor.us\/article\/cash-management-accounts\/\"><span style=\"font-weight: 400;\">cash management accounts<\/span><\/a><span style=\"font-weight: 400;\"> with guaranteed payouts, such as Syfe Cash+ Guaranteed or StashAway Simple Guaranteed. Both offer 3.6% for the 6-month lock-in period. Now we are talking! They are pretty competitive compared to T-bills.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There is also a new contender in this space: Chocolate Finance, which runs a promotion offering a fixed return of 4.2% for the first $20,000 deposit and a $3.5 % target rate after that. There is no lock-in period.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are interested in cash management accounts, please remember that they are considered investments and not insured by the SDIC.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Singapore Savings Bonds (SSB)<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">SSB has seen quite attractive rates recently. <\/span><a href=\"https:\/\/www.wealthfor.us\/article\/singapore-savings-bond-ssb-aug-2024-3-22-for-the-10-year-average\/\"><span style=\"font-weight: 400;\">This month&#8217;s SSB offers 3.22% for its 10-year average and 3.19% for the first-year rate<\/span><\/a><span style=\"font-weight: 400;\">. These rates are competitive, considering SSB locks in the rates for ten years. If you think interest rates may start to reverse soon, it may be worth considering locking in these higher rates for longer by getting into longer-duration investments such as SSB.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2>What Would We Do?<\/h2>\n<p><span style=\"font-weight: 400;\">We have been parking our short-term cash allocation into T-bills and will likely continue to do so while these higher rates last. However, as we believe the current interest rates may have peaked and may start to reverse soon, we have migrated some of our short-term cash allocations from T-bills to SSBs to lock in the higher rates for much longer.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you are interested in applying for the next T-bill auction, you may follow our guide on <\/span><a href=\"https:\/\/www.wealthfor.us\/article\/how-to-buy-t-bills-singapore\/\"><span style=\"font-weight: 400;\">how to buy T-bills<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">If you plan to apply with CPF, you can estimate the additional interest you may earn using our <\/span><a href=\"https:\/\/www.wealthfor.us\/article\/tools\/cpf-t-bill-calculator-singapore\/\"><span style=\"font-weight: 400;\">CPF T-bill calculator<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The auction result for T-bill BS24113N concluded with a cut-off yield of 3.7%, a slight decline from the previous auction&#8217;s 3.74%. Did you manage to get your desired allocation? &nbsp; Auction Result Please note that this T-bill BS24113N auction offered a slightly lower allotment of $6.5 billion, down from $6.6 billion in the previous auction.&hellip; <a class=\"more-link\" href=\"https:\/\/www.wealthfor.us\/article\/t-bill-bs24113n-cut-off-yield-declined-to-3-7\/\">Continue reading <span class=\"screen-reader-text\">T-Bill BS24113N Cut-Off Yield Declined to 3.7%<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":2944,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[101,102],"tags":[],"class_list":["post-2941","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-fixed-income","category-singapore","entry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>T-Bill BS24113N Cut-Off Yield Declined to 3.7% - WealthFor.Us<\/title>\n<meta name=\"description\" content=\"T-bills continue to offer decent yield. 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