Friday, December 8, 2023
HomePassive IncomeUtilizing CPF-OA for 4% T-bills in January 2023.

Utilizing CPF-OA for 4% T-bills in January 2023.

I utilized for each 6 months T-bills this month.

The primary one had a cut-off yield of 4.2% p.a.

The second had its public sale right now.

Reduce-off yield at 4.0% p.a.

My non-competitive bid was totally crammed.

I proceed so as to add to the bond part of my portfolio. 

I’m utilizing dividends from my investments and in addition some cash from maturing mounted deposits to take action.

Right this moment, I additionally utilized for the 1 yr T-bill which, in contrast to the 6 months T-bills, is simply provided 4 occasions a yr.

The public sale outcomes for this month’s 1 yr T-bill will probably be introduced on 26 January.

Why did I apply for the 1 yr T-bill?

I did not plan to do it however I needed to meet my banker on the financial institution to gather Chinese language New Yr notes.

It’s the common yearly go to to the financial institution for me.

Then, I assumed I’d as effectively apply for the 1 yr T-bill with my CPF-OA cash.

I imply I used to be already on the financial institution.

Not having to affix a protracted queue on the financial institution additionally helped in making the choice to make the applying in individual simpler for me.

As it’s costlier and nonetheless extra troublesome to make use of CPF-OA cash to use for T-bills, a 1 yr T-bill can also be extra engaging than a 6 months T-bill, every part else being equal, I really feel.

I’ll very seemingly lose an extra 2 months of CPF-OA curiosity revenue however so long as this 1 yr T-bill cut-off yield isn’t too low, I’ll get some further pocket cash.

Sure, I do know, the cash can solely be in my pocket virtually 4 years from now once I flip 55.

This can be a motive for accounting for my CPF curiosity revenue individually and never lumping it along with my yearly passive revenue updates.

The curiosity earned is not cash I can make the most of straight away.

It is not close to cash.

Nonetheless, good to have, I assume.

Shifting cash from the CPF-OA into T-bills does not do something to my funding portfolio when it comes to the bonds to equities ratio, after all.

It simply signifies that my CPF account which I contemplate a part of my bond holdings will get a slight increase.

How a lot may this increase be?

Effectively, allow us to assume I moved $200,000 and the 1 yr T-bill cut-off yield was 4% p.a.

Doing a again of the envelope calculation, 1 yr CPF-OA curiosity revenue would have been $5,000.

4% p.a. 1 yr T-bill would yield $8,000.

So, could be grossing $3,000 extra.

Nonetheless, as I in all probability wouldn’t get any curiosity revenue from the CPF-OA for an extra 2 months, I might lose one other $833 in CPF-OA curiosity revenue.

So, the online acquire could be nearer to $2,166.

For an entire yr and with a comparatively giant sum of $200,000, I do not suppose the acquire is a giant deal.

After all, if we had been to maneuver a sum twice or thrice as a lot, in absolute greenback phrases, it could be extra fascinating.

If I didn’t have the form of cash I’ve in my CPF-OA and if I needed to be a part of a protracted queue on the financial institution, I do not suppose I might have bothered to make the applying.

I do know some persons are fairly delicate about this subject.

I hope I didn’t offend anybody by saying this.

Simply me speaking to myself, after all.

Anyway, will anticipate the public sale outcomes now.

Hopefully, my software is totally crammed or else the fee could be even increased.

We aren’t risking a lack of 0.05% p.a. curiosity however 2.5% p.a. after we use our CPF-OA cash.

So, going for aggressive bidding makes higher sense.

That is in case the unthinkable occurs.

The unthinkable?

Think about a lot of individuals positioned their bids for a 2% p.a. yield and picture if the cut-off yield was 2.01% p.a.

That may be a most gorgeous OMG second!

Simply pondering of the likelihood is giving me an nervousness assault!

Do not play, play!

Having stated this, I put in what I felt was a wise bid and didn’t put in an especially low bid.

I do know some persons are nonetheless ready for me to say one thing else.

You need to know what was my bid?

I do know.

AK shy lah.

OK, I let you know.

Increased than 3% however decrease than 4%. 

Win liao lor!

Good luck to us all!


1. T-bill at 4.2% p.a. investor profile.
2. My largest investments up to date.
Just lately printed:
$1.3m! Common however wealthy!



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