Executive Summary

The HardwareZone forum discussions around Money Mind reveal a diverse range of perspectives on personal finance, investment strategies, and retirement planning in Singapore. The community actively discusses various financial instruments, including T-bills, fixed deposits, Singapore Savings Bonds (SSBs), and REITs. There’s a noticeable interest in maximizing returns while managing risks, with many users sharing their experiences and strategies. Key discussions revolve around the recent *3%* cut-off yield for T-bills, the attractiveness of higher fixed deposit rates, and the long-term implications of inflation. The forum also highlights a growing interest in achieving financial independence and retiring early (FIRE), with users exploring different approaches.

Users are actively comparing various options, weighing the pros and cons of each. The conversation shows a keen awareness of the need to optimize returns, manage expenses, and make informed financial decisions. A significant portion of the discussion focuses on strategies for retirement planning, including the use of SRS accounts and CPF funds. One user highlighted a recent T-bill auction where the cut-off yield reached *3%, and only approximately 4%* of competitive applications were allotted.

Key Developments

T-Bill Yields and Auctions

Recent discussions have focused heavily on the fluctuating yields of T-bills. The community noted a significant increase in cut-off yields, with one auction reaching a *3% cut-off yield. This led to a surge in interest and application volumes. Users observed that competitive applications only had approximately 4%* allotment.

“F***, tbill chionging up = my reits gg” – User comment

“Allotment Total Amount Allotted SGD 7.1 billion Amount Allotted to Non-Competitive Applications SGD 2.4 billion Total Amount Applied SGD 17.4 billion % of Competitive Applications at Cut-off Allotted Approximately 4%” – User quoted auction results

The high demand and low allotment rate for competitive bids prompted many to consider non-competitive applications, which were allotted *100%. Some users expressed concern that the increased T-bill yields might negatively impact other investments, such as REITs. The auction results on 2nd December 2024 showed a cut-off yield of 3% with a bid-to-cover ratio of 2.45*.

Singapore Savings Bonds (SSBs) and Projections

The community actively discussed the interest rates and projections for SSBs. Users referenced websites like ilovessb.com for yield projections. The SBJAN25 and SBFEB25 bonds were specifically mentioned. The SBJAN25 bond’s projected average return per year was *2.88% by year 10 as of 21st November 2024, and revised to 2.86%* by 29th November 2024.

“Projection by https://www.ilovessb.com/projection/SBJAN25, as of 21/11/2024: SBJAN25…Average return per year %2.732.772.792.802.802.812.832.852.862.88” – User posted SSB projection

The discussion also included the SBFEB25 bond, with a projected average return of *2.71%* by year 10 as of 11th December 2024. Users noted that the interest rates for SSBs are generally lower compared to the recent T-bill yields, leading to debates about the suitability of each instrument. The community also discussed the pros and cons of different SSB options, weighing the guaranteed returns against the potential for higher yields elsewhere.

Fixed Deposit (FD) Rates

Users noted that some banks, like Maybank and HL Bank, are offering competitive fixed deposit rates. HL Bank’s offer of *3.2% for 6 months with a minimum deposit of SGD 100,000 was specifically mentioned. RHB was also mentioned for offering 3% for premier customers with varying tenors of 3, 6, 12, or 18 months. OCBC and DBS were mentioned as offering 3%* for 3 months.

“Some FD are 3% , so why the trouble if Tbill is too much lower. might be for CPF?” – User asking about FD vs T-bill
“Check out HL Bank: 3.2%, 6m, 100k min” – User sharing a FD option

These higher FD rates were compared to T-bill and SSB yields, prompting users to consider different options for parking their cash. The discussions also highlighted the need to compare terms, minimum deposit amounts, and flexibility when choosing between FDs and other instruments. Maribank saveplus was mentioned as an option with around *3.03%* interest and the ability to withdraw instantly.

Community Insights

User Experiences

Users shared a variety of experiences related to investment and financial planning. One user mentioned successfully paying off their mortgage by selling their Bitcoin, moving closer to their FIRE goal. Another user shared their experience of receiving refunds for T-bill applications, noting the varying interest amounts received and the speed of refunds from different banks.

“Just sold off all my BTC, my own stay property mortgage is essentially fully paid off now. One step closer to FIRE!” – User achieving FIRE goals

“Just for the update refunds received. 50k got 748 and 2k got 29.92 interests. The amounts refunded separately.” – User sharing T-bill refund experience

A user also detailed their struggle to break free from a cycle of poverty, highlighting the importance of financial planning and a change in mindset. Another user shared their positive experience with an NTUC whole life policy, achieving returns of *3.5%*+ CAGR over a long period, treating it like a bond. These diverse experiences highlight the varied financial situations and strategies within the community.

Tips and Recommendations

The forum also provided many practical tips and recommendations. Several users suggested considering REITs now that they are low due to the increase in T-bill yields. One user highlighted the importance of understanding the difference between SRS and non-SRS investments and that opening an SRS account with just *SGD 1* can lock in an early withdrawal age.

“Another way to look at it – an opportunity to buy some reits now that they are low.” – User suggesting REIT investment

“Also note that if you don’t have a SRS account yet it doesn’t hurt to open one with SGD 1 to lock in your earliest qualified withdrawal age.” – User recommending SRS account opening

Users emphasized the need to accumulate a 3-to-6 month emergency fund in liquid, low-volatility assets before investing. They also advised against falling for insurance agent sales pitches, especially for whole life policies, at a young age. A “4% or 3% rule” was mentioned for FIRE planning, suggesting that *3%* of one’s net worth should be greater than projected annual expenses. Users also suggested investing in index funds or using services like Endowus to maximize returns from CPF OA funds.

Important Considerations

The discussions also raised several important considerations. The forum touched upon the potential risks of inflation eroding the value of cash and fixed-income investments. Users highlighted the need to account for increased healthcare costs and insurance premiums in retirement planning. The OCBC Financial Wellness report was criticized for suggesting a retirement lifestyle with a HDB flat, high-end car, and domestic helper for *SGD 6,150* per month, which some deemed unrealistic.

“In today’s high cost Singapore, budgeting 6.1k SGD a month is attainable in the private property+high end car+domestic helper setting provided you have no burden such as parents, parents-in-laws, wife, schooling children, mortgage, car loan etc.” – User highlighting the unrealistic nature of the report.

Users also discussed the importance of diversifying investments and not relying solely on dividends. The forum cautioned against making speculative investments, such as putting all funds into a single stock or gambling in a casino. The community also highlighted the challenges of obtaining a BTO or SBF flat as a single individual.

Looking Ahead

The community expects continued fluctuations in T-bill yields and interest rates. There’s a general anticipation that T-bill yields may not remain at the recent *3%* level. Users are likely to continue exploring various options to maximize their returns, including fixed deposits, SSBs, and other investment instruments. The discussion around FIRE and retirement planning is expected to remain active, with users continuing to share their experiences and strategies.

The forum also anticipates that the discussion on the impact of inflation and the need for adequate retirement planning will continue. Users are expected to closely monitor updates on various financial instruments and adapt their strategies accordingly. The community also expects more discussions on the implications of CPF policies and options for maximizing returns from CPF funds.