How To Buy Treasury Bills Issued by MAS Without Going to the Bank

Today's wired society with internet access 24x7 sees everyone working at the speed of thought, as bits and bytes are transmitted virtually simultaneously through computer networks and systems.

How can we leverage on the available technology for our personal investments?

Let me share how we can buy and sell 3 month Singapore Government treasury bills issued by MAS using Poems. For those who have not heard of poems, it is Phillips Securities Online Electronic Mart system. Those who buy and sell stocks and shares in SGX online will know what is poems. The beauty of poems is that it is one of the more progressive electronic trading plaforms catering to retail investors and they have added the feature of being able to apply for the 3 month treasury bills issued every week by MAS.

The steps are simple:

1. Apply for a poems trading account - you can download the form online and sending it them them along with the required documents and deposit. You can also do it at any of their investor centres.
   
2. Apply for a cash management account online using the Online Forms option under > Stocks > Account Management
3. Once Phillips Securities has approved your (1) and (2) you are ready to participate in the 3 month treasury bills issuance market

Do note that poems does charge a bid-ask spread between what is offered by MAS on the cut-off yield vs the actual yield you receive. This is effectively the commission that Phillips earns from allowing you to do this electronically. Personally, I think this is worth the effort since it saves us time and effort and time IS money.

Take note that you should have sufficient funds when you are buying the treasury bills. Once purchased, you may sell the treasury bill anytime before maturity to Phillips of course at a slight discount. As treasury bills work as a zero coupon basis, this means if you deposit buy $1,000 worth of treasury bills, you will be deducted upfront for say, $990 and when the treasury bill matures, you will receive $1,000. Hence, your yield (or interest) is computed by this formula:

• Yield = 365 x (100-Price) / number of days.

Example. A 91 day treasury bill is priced 99.30. Hence yield = 365x(100-99.30)/91= 2.808%

Transferring money to and from poems is also quite easy. Once you have set up the poems account and also the EPS (electronic payment for shares) with Poems, you may:

1. Transfer money to Poems using internet banking or ATM via EPS feature
2. Transfer money from Poems using Online Forms to pay via direct credit (POSB/DBS) or via quick cheque to any local bank in Singapore
   

For those of us who wish to have more alternative lower risk investment instruments, treasury bills are a good complement to fixed deposits and savings and let your fingers help you do the investing!

May you live long and prosper.

Treasury Bills: Getting a yield that is close to fixed deposits for low balances of $1,000

Many risk-adverse salary-man/women tend to only know of fixed deposits and savings accounts as the main instruments we can use to put away our savings and to see them grow. But if you had checked out the interest rates given by your local bank, you will be appalled at the low interest rate being paid by them. It is even lower than inflation, i.e. your savings is shrinking every year in terms of the amount of things you can buy as the Consumer Price Index is increasing.

I learnt from surfing the Hardwarezone forum that Treasury Bills are another form of instrument available to us small investors to pool our monies into relatively low risk and reasonable yielding instruments. The Singapore Government borrows money from the market by issuing Singapore Government Securities. These come in the form of treasury bills (typically with period of 3 months to 1 year) or Bonds.

You can get reasonably safe returns that are even safer than Fixed Deposits by applying for Treasury Bills at the local banks or buying it through a financial intermediary such as Philips Securities through POEMS.

Make your money work for you. Consider treasury bills issued by the Singapore Government through MAS.