Not so long ago, cash management is simply placing it a high yield bank account such as DBS Multiplier, OCBC 360 or UOB One. But with the rising interest rate, there are now a few other viable options such as fixed deposits, SSBs and T-bills.

These options came at the right time for me since I am having 3 years of cash for liquidity as I set out to explore my new phase of life. So instead of just 1+% interest just half a year ago, now I can get more than 3% interest for my cash! So I was thinking how I am going to manage the cash so that it can work with my draw down plan. The two factors that affect my decision is liquidity and interest rate. Given that I am not going to have any regular income, I must ensure I will have sufficient cashflow for daily living and earning higher interest for cash not for immediate use.

The table summarises the two factors for the various options.

LiquidityLatest Interest
UOB OneAvailable immediately~1.4%
Singapore Saving BondsAvailable in one month3.26%
T-billsAvailable in 6 months4.19%

While one can earn up to 3.6% with UOB One account, for the amount I am going to leave with them and my transactions with the bank, the interest I am likely to get would be around 1.4%, including the cash rebate from credit card.

Based on the above factors, this will be my plan. I will have about 6 months of expense in my various bank accounts but mainly in UOB One. 18 months of expenses in Singapore Saving Bonds and 12 months of expenses in T-bills. Obviously it will not stay this way throughout the year as I draw down on my savings. Hopefully I am able to hit the target return for my investment and then this model can recur annually.

Currently I have about 15 months of expenses in SSB and 7 months in T-bills. Given the current high demand for SSB and I am redeeming my earlier tranches, I hope I can achieve the above allocation by next March.