I am applying for the 12 month T-bills with CPF OA again.

If you have been following my post, I did my first OA investment on Oct 2022 for the 12 month T-bills.

I have split my investible OA amount into 3 tranches for the T-bill application when the T-bill interest shot up due to interest rate hike. So now I have 2 left. 

For the 2nd tranche, I will be going for the 12 month T-bill again. The 12 month T-bills will be opened on 17 Jan 2023.

This time round, because the Maturity date is so close to end of Jan 2024, It is likely going to be February 2024 before the money can be transferred back to my CPF OA. So essentially I will not be getting the 2.5% CPF OA interest from Jan 2023 to Feb 2024, a total of 14 months.

 
Based on an invested amount of $50k and a cut-off yield of 3.9%, I did a quick comparison between CPF and T-bill interest money I will be getting in the table below for this T-bill. We are looking at around $500 gain for the 14 months duration where the money for the 12 months T-bill will not be in my CPF OA.


 

CPF

12 month T-bill @ 3.9%

Interest for 14 months

$ 1459

$ 1950

Fees (estimate)

$ 0

- $ 12

Interest from upfront Yield

$ 0

$ 56.8

Total

$ 1459

$ 1994.8

Gain from T-bill

$ 535.8


I do get quite a bit of questions from friends on why I am not applying for the 6 months T-bills instead. 

I prefer the 12 months to a 6 month just because I'm lazy to visit the bank that frequently to cycle the 6 months T-bills since application of T-bills via OA need to be in person.

Also some of the 6 months T-bill maturity date will result in a 8 months loss of CPF OA interest which will reduce the gain further making cycling more complicated.

For me, I am happy to get a few hundred dollars gain on top of the 2.5% from CPF OA and not complicate things too much.

If you are also interested in applying for it, do so a few days before the Auction date of 26 Jan 2023. Also do read this post on Things to consider before using your OA to invest in T-bills before you decide.

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As always, thanks for reading and do support me on my referral page. Stay Safe and Happy CPFing!

I am applying for the 12 month T-bills with CPF OA again. I am applying for the 12 month T-bills with CPF OA again. Reviewed by Valuewarrior on January 16, 2023 Rating: 5

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