Treasury Bill Singapore: A Comprehensive Guide to Investing

What are Treasury Bills in Singapore?

Treasury bills (T-bills) are short-term government securities issued by the Monetary Authority of Singapore (MAS). They are considered one of the safest investments available in Singapore due to their low risk and back by the Government of Singapore.

T-bills have maturities of 3, 6, or 12 months. They are sold at a discount to their face value and repay at face value upon maturity. The difference between the purchase price and the face value represents the interest earned.

Why Invest in Treasury Bills Singapore?

1. Low Risk:
As government-backed securities, T-bills are considered to have extremely low risk. This makes them an ideal investment for risk-averse investors seeking capital preservation.

2. High Liquidity:
T-bills are highly liquid and can be traded easily in the secondary market. This means that investors can access their funds quickly if needed.

3. Competitive Returns:
While T-bill yields are generally lower than other investments, they offer a competitive return relative to other low-risk assets. The interest rates on T-bills are determined by the Singapore Interbank Offered Rate (SIBOR).

4. Diversification:
T-bills can provide diversification to an investment portfolio by adding a low-risk asset class.

Types of Treasury Bills in Singapore

There are two main types of T-bills in Singapore:

1. Negotiable Treasury Bills (NTBs):
NTBs are large-value T-bills with denominations of S$1 million or more. They are typically traded electronically through a central depository system.

2. Retail Treasury Bills (RTBs):
RTBs are smaller-value T-bills with denominations ranging from S$1,000 to S$1 million. They are available to both retail and institutional investors through local banks and brokerage firms.

How to Invest in Treasury Bills Singapore

1. Open a Securities Account:
To invest in T-bills, you will need to open a securities account with a local bank or brokerage firm.

2. Place an Order:
Once you have an account, you can place an order to buy T-bills through your broker. You will need to specify the amount you wish to invest and the maturity date of the T-bills.

3. Settlement:
When your order is executed, the T-bills will be settled into your securities account. You will receive payment for the interest earned upon maturity.

Tables and Data

Table 1: Historical T-Bill Yields in Singapore

Source: Monetary Authority of Singapore

Table 2: NTB Issuance Calendar 2023

Source: Monetary Authority of Singapore

Table 3: RTB Issuance Calendar 2023

Source: Monetary Authority of Singapore

Table 4: Comparison of Treasury Bills with Other Investments

Conclusion

Treasury bills are a low-risk and liquid investment option for individuals and institutions in Singapore. Their short maturities provide flexibility, while their government backing ensures low volatility. By understanding the different types of T-bills and the investment process, investors can leverage these securities to meet their financial goals.

Additional Information:

• The Monetary Authority of Singapore (MAS) is the regulatory body responsible for issuing T-bills in Singapore.
• T-bills are exempt from capital gains tax in Singapore.
• Investors can use T-bills to manage cash flow and optimize returns.