SINGAPORE — The latest six-month Treasury Bill (T-bill) to be issued on January 9, 2024 had a cut-off yield of 3.74% per annum and a cut-off price of $98.135.
The application amount was S$12.8 billion, with a total of S$6.1 billion allocated, of which S$2.4 billion was allocated to non-competitive applications.
The latest T-bill maturity date is July 9, 2024, according to an announcement by the Monetary Authority of Singapore (MAS).
In the December 20th auction, the cutoff yield for six-month government bonds had previously been 3.73% per year. All non-competitive bids were 100% allocated.
What is a T-bill and how does it work?
T-bills are short-term Singapore Government Securities (SGS) issued at a discount to face value with a fixed interest rate. The Singapore government is issuing six-month and one-year government bonds with a minimum bid of S$1,000, which is a multiple of S$1,000.
Investors receive the full face value at maturity. So, for example, if an investor buys S$10,000 worth of six-month Treasury bills with a yield of 3% per annum, he only needs to pay S$9,850 upfront. At the end of the tenor, he will receive his full S$10,000, thus he will have an income of S$150.
T-Bills are fully backed by the government and have a credit rating of AAA. As such, Treasury bills are considered a very low-risk short-term investment option that can be used to diversify your portfolio.
You can invest in cash, Central Provident Fund (CPF) funds or Supplementary Retirement Scheme (SRS) funds with no aggregate limit.
How do I buy national tax in Singapore?
T-Bills are available for bidding at the primary auction, which is typically held three business days prior to issuance and announced on the SGS website five business days prior to auction. Check the publication calendar for upcoming auctions, announcements, and results.
The first thing you need to do is make sure you have enough funds in your account. If you apply for a new issue in cash, the full bid amount will be debited from your account at the time of application. Also, he must have an account with one of the three local banks: DBS/POSB, OCBC, UOB.
Applications via ATM, internet banking, and mobile banking apps may close 1-2 business days prior to auction. Therefore, you should check with your bank for the exact cut-off times for the various application channels.
If you wish to purchase using SRS funds, you will need an SRS account with one of the three SRS operators (DBS/POSB, UOB, OCBC). You can apply for a T-bill through your SRS operator’s internet banking portal.
If your transaction is successfully completed, you will see it reflected on your statement issued by your SRS operator.
If you want to use the CPF Investment Scheme (CPFIS) funds, you will need a CPF investment account with one of the three CPIF agent banks (DBS/PSOB, UOB or OCBC).
However, unlike the two options above, you will need to submit your application in person at a CPFIS bond dealer branch. Upon successful completion, you will see the transaction reflected on his CPFIS statement issued by the agent bank.
If your bid is unsuccessful or invalid, your bid will be refunded to the account you used to make the application. Refunds will be posted to your account 1-2 business days after the auction.
What is competitive bidding and non-competitive bidding?
When applying for Treasury bills, two bidding options are available: competitive bidding and non-competitive bidding.
If you only want to invest in T-Bills if the yield is above a certain level, then competitive bidding will take place. You can specify the yield to accept as a percentage to two decimal places. Lower yields mean more competitive bidding. This type of bid is typically reserved for institutional or knowledgeable investors.
If you only want to specify the amount you want to invest, not the yield, please submit a non-competitive bid. Choose this if you want to invest in T-bills regardless of the return, or if you are unsure of the bid yield.
Non-competitive bids will be given priority allocation of up to 40% of the total issue amount. If the amount of non-competitive bids exceeds 40%, the deposit will be allocated on a pro-rata basis.
What is the difference between T-bill and SSB?
|
Treasury bills |
SSB |
|
|
tenor available |
6 months or 1 year |
up to 10 years |
|
Sales method |
Flat price auction – competitive or non-competitive bidding |
Quantity limit format |
|
Publication frequency |
Biweekly or quarterly according to publication calendar |
monthly for at least 5 years |
|
Minimum investment amount |
S$1,000 and multiples of S$1,000 |
S$500 and multiples of S$500 |
|
Investment limit |
None; up to auction quota limit |
Total amount: 200,000 Singapore dollars |
|
Do you want to buy using SRS and CPF funds? |
yes |
SRS: Yes |
|
Type of interest payment |
There are no coupons.Issued and traded at a discount from face value |
Fixed coupon; step up every year |
|
How often is interest paid? |
at maturity |
Every six months from the month of issue |
|
secondary market transactions |
At DBS, OCBC or UOB main branch |
no |
|
Transferable |
yes |
no |
|
Maturity and redemption |
There is no early redemption. Investors receive the face value at maturity. |
You can use it any month without penalty. |
Are government bills taxed in Singapore?
There is no capital gains tax in Singapore. For individuals, interest income earned on Treasury bills is tax-free.
Non-residents who do not have a permanent establishment in Singapore do not have to pay tax on their interest income.
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