The Lowest of the Low? – 3 Month Treasury Bills at 0.40% per annum!
3 Month Singapore Treasury Bills yields have dropped to as low as 0.40% in the recent auction. At this interest rate, $1,000 deposited would need 180 years to double to $2,000. Sobering, isn’t it?
Such a low returns regime coupled with the stock market performing at below 3000 level makes obtaining positive returns beating inflation a challenge among those who manage our own investment monies.
So what can one do in the era of 7.5% inflation coupled with 0.4% yields on risk-free investments in treasury bills?
Seek greater returns by taking on more risk through reviewing other types of assets such as equities, bonds or property. Each type of asset carries with it corresponding risk-return trade-off. Minimally, place your free cash in Fairprice Plus Savings that at least yields 1% returns. That is 2.5x the return on risk-free 3 month treasury bills and would constitute a good start.
The low interest rate regime cannot last forever. Only time can tell.
