Dear readers, the auction results of BY24100T (1-Year Treasury Bill (T-Bill)) was released earlier on 25 Jan 24!
I believe many will be more familiar with 6-month T-Bills since 6-month T-Bills are issued twice per month. On the other hand, 1-Year T-Bills are issued on a quarterly basis, every 3 months.
The last 1-year T-bill was issued in Oct 2023, and back then, the cut-off yield was pretty decent at 3.7% per annum.
Fast forward to the auction result of BY24100T 1-year T-bill. There is high demand as application was at $14.4billion versus an allotment of $4.5 billion, which gave rise to a 3.19 Bid-to-Cover ratio.
The Bid-to-Cover ratio for the latest 6-month T-bill, BS24101Z, which closed at 3.70% per annum was 2.12. Hence, the higher Bid-to-Cover ratio of BY24100T goes to show that more savers are now looking at securing higher and decent interest rates for a longer period, knowing the trend of interest rates this year is likely to be downward.
This has always been my calls to savers: make hay while the sun shines. Secure high interest rates for a longer period while these rates are still available!
The cut-off yield interest rate of BY24100T is 3.45%, lower than the previous 1-year T-Bill, which is not a surprise in this current market environment. But this is a decent interest rate, as compared to the 3.07% average interest rate of the most recent GX24010F Singapore Savings Bonds which has closed.
The current bank interest rates is around 3.1% per annum, hence anything above 3.1% per annum makes for a decent interest in current times in my belief.
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