In my last blog post, I made a passing mention about a 6 month T-bill which I bought using money in my CPF-OA maturing in the same week.
I made a request to transfer the money back to my CPF-OA when I saw the funds sitting in my CPF-IA a day later.
It was all rather easy with DBS online banking.
I simply logged in and went to the “Invest” tab and selected “More investment services.”
Then, I chose “Refund to CPF Board.”
Clicked on “Refund Full Amount”, and it was basically done after clicking “Next” and “Submit.”
Today, I checked my CPF account and found that the funds are back in my CPF-OA.
Now, I am wondering whether I should buy another 6 months T-bill with the money.
To be quite honest, I am not as enthusiastic as before because the cut-off yield has reduced so much since the start of the year for 6 months T-bills.
In January, it was as high as 4.2% p.a.
The T-bill that matured last week had a cut-off yield of 3.93% p.a.
I am hazarding a guess that the cut-off yield for this week’s auction is probably going to be around 3.7% p.a. or similar to what we got in the last auction.
For a sum of $50,000, we are looking at an additional interest income of less than $200 compared to what the CPF-OA would pay for a 7 months period.
Nothing to write home about.
Anyway, with CPF-OA money, I will not go the path of non-competitive bids just in case the unthinkable happens.
I will put in a competitive bid of 3.5% p.a. because I don’t think I am interested in anything lower than that.
If the cut-off yield should come in at 3.5% p.a., the difference in interest income is going to be less than $120.
The cut-off yields for 6 months T-bills are declining but the CPF-OA still pays 2.5% p.a.
So, the difference is shrinking and it is really not a big deal.
There is quite a bit of talk in social media that we should all use our CPF-OA money to buy T-bills.
To be honest, unless the sum of money is relatively large, it isn’t anything to worry about.
If we do not have a large amount of money sitting in our CPF-OA, we really are not missing out on any meaningful passive income.
I think some people would say don’t sweat the small stuff.
Of course, I am just talking to myself.
If AK can talk to himself, so can you!