SSB or T-Bills?

If you mentioned T-bills a year ago, you will get pretty much excitement. I remembered telling my friends and colleagues about this and they were surprised that it paid out interest greater than fixed deposit.

One year has passed and the awareness of T-bills is a lot higher now, with sharing not only on the financial community but also on mainstream media. So the current feeling towards it is probably more “meh” than excitement.

Personally, I think that is a correct feeling as at the end of the day, it is just a fixed income instrument with a short duration, so there is no reason to be too excited about it. Having said that, together with Singapore Savings Bonds (SSB), they are good instruments to park cash temporary.

One tranche from my OCBC fixed deposit just matured a few days ago. I received a courtesy call from a bank officer and asked if I would like to renew the fixed deposit. For a moment, I thought he was going to offer me a special rate. Alas, I am not “The Special One” and he told me the current rate which is 2.7%.

Well, thats definitely not attractive enough, given that I am already getting 3.0% from my UOBOne account. Also, SSB and T-bill are yielding above that too. So the question for me is to decide where I should place this cash?

A check online shows the latest SSB is yielding at 3.16%, which is pretty attractive rate to lock in for 10 years. A closer look shows that the rate jumps from year 8 onwards.

On the other hand, the recent yield of 6-month T-bill hovers around 3.7%. It’s higher than SSB but duration is only a mere 6 months and we will not know what will be the rate half a year later.

Considering how I am going to use this amount of cash, I decided that I do not need to choose either option. Embracing the genius of AND, I am just going to go for both this time round. Erm, with a bit more on T-bills.

Why not just invest in equities and get a higher yield from dividend? Simply because I am likely to utilise this amount next year. So nope, this money is not meant for equities.

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