Using CPF OA to buy Treasury Bills

The current 6-mths Treasury bills gives an interest of 2.9% to 3% while CPF OA is at 2.5%. I am just wondering, does anyone uses CPF OA to buy Treasury bills to earn that extra 0.4-0.5%? It may seems little, but the changing hands of $100k from CPF to T-bills (still within government, so still very safe) will still net you an extra of $250 for a 6-mth period. Thats literally free money at no risk isnt it?

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DunSayBojioHor

04 Dec 2022

You have to consider the liquidity too.

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Tan Choong Hwee

Edited 03 Sep 2022

Investor/Trader at Home

The thing is you don't know the yield at the time of application to the 6-month T-bills. The yield is determined after the auction results come out.

One thing to take note, CPF interest is calculated based on the lowest balance of the month. When the $100k is deducted from CPF for T-bill application, and that $100k is credited back into CPF at T-bill maturity, you would lose 7 or 8 months of 2.5% CPF interests, and you need enough yield premium from T-bill to cover that.

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