Equity is a practical way to generate good returns for myself being a "kaisu" of me. However "kiasi" of me, no matter how good equity is, I need emergency fund and reserve fund for my property installments if I am unemployed permanently.
After maximizing Singapore Saving Bond ( SSB ) in the range of 2%+, I start to explore ways to optimize my cash other than fixed deposits. One way is Government Treasury Bills which I can apply locally through internet banking easily. The recent allocation is 1.35%. For people who is unfamiliar, here's the information I tried to get from the web. So dyodd. Easy money for me !
Treasury Bills
When I applied say $50K, the gov pays me for this example 1.38% returns for 1 year tenor bill, $690 ( coupon ) upfront immediately into my saving account ( below table ). After one year, they return $50K back to me. Internet application through internet banking account is a fly. MAS has done a good job in this area.
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| MAS Auction Result |
There are few other things to know before applying.
1. Competitive and non-competitive bids.
As individual investor, use non-competitive. What this mean is that I will be allocated whatever the auction result is, to make my life simple. Is like a blind bid. So far I know, the return
2. Government Security
Treasury bill is one of government security. So is safer than bank
3. Returns
Much better than Fixed Deposit for similar terms.
4.
"Interests" are paid upfront. Principal return to you after period is up. Do note carefully the lockup term.
(You can sell in secondary market but could be a hassle to explore)
(Treasury bills are sold at a discount to face value, and the investor receives the face value when the T-bill matures)
5. Priced Local Dollar
S$ exposure when applied Singapore Gov Treasury Bills.
6. Quarterly Application
Bidding is open only on certain date quarterly
7. Tax
" Capital gains are not taxed in Singapore, and SGS interest income accrued to individual investors is currently exempt from tax. Furthermore, for all SGS issued after 28 Feb 1998, interest on SGS earned by non-residents who do not have any permanent establishments in Singapore is also tax-exempt. "
This is good place for parking money temporary as war chest as part of portfolio allocation. Is also a good way to have them tuck here for my property installment reserve.
This is Not emergency or immediate fund which I can tap. For long term, this is nowhere near CPF which maybe much better, and consideration of higher allocation for legacy and retirement needs.
Recently, I heard about Maxigain from Citibank which I can get 2% after lock up period like a year with some fine prints. I will research later.
Cory
20180128
