Want a low-risk investment with better returns than savings accounts? Singapore Treasury Bills (T-bills) might be the answer. These short-term, government-backed securities offer stable yields and capital preservation, making them a smart choice for investors seeking safety and liquidity in uncertain times.
Recently, T-bills have been making headlines with fluctuating yields—drawing more interest from Singaporeans. On Jan 28, 2025, the six-month T-bill yield hit 3.04%, up from 2.99% earlier. But by Feb 13, it dropped to 2.9%, showing how market demand impacts returns. With interest rates shifting, many Singaporeans are looking at T-bills to maximize short-term gains while avoiding stock market volatility.
This guide covers everything you need to know about T-bills—how they work, their risks and benefits, historical yields, and how to invest. Whether you’re a seasoned investor or just starting, you’ll get practical insights to make informed decisions.
What Are Singapore Treasury Bills (T-Bills)?
Singapore Treasury Bills (T-bills) are short-term government securities issued by the Monetary Authority of Singapore (MAS). They are backed by the Singapore government, making them one of the safest investment options available.
T-bills are among the four types of Singapore Government Securities SGS, and you only buy them at a discount. T- bills in Singapore mature either after six months or after one year, but the 6 months bills are more common.
Unlike fixed deposits or bonds, T-bills do not pay periodic interest. Instead, they are zero-coupon securities, meaning investors buy them at a discount and receive the full face value at maturity. The difference between the purchase price and redemption value represents the investor’s return.
Types of T-Bills in Singapore
MAS currently offers two types of T-bills:
- 6-Month T-Bill: The most commonly traded option, auctioned every two weeks.
- 1-Year T-Bill: Offered less frequently than the 6-month version but follows the same structure.
Who Issues T-Bills and Why?
T-bills are issued by MAS on behalf of the Singapore government as part of its monetary policy and debt management strategy. The key reasons for issuing T-bills include:
- Public Sector Financing: Helps the government manage short-term cash flow needs.
- Liquidity Management: MAS uses T-bills to regulate money supply and stabilize short-term interest rates in the financial system.
- Investment & Reserve Management: Institutions, banks, and retail investors use T-bills to park excess cash securely while earning returns.
By issuing T-bills, the government ensures financial stability while providing investors with a low-risk way to earn passive income.
How Do T-Bills Work?
Singapore Treasury Bills (T-Bills) are issued through a uniform-price auction conducted by the Monetary Authority of Singapore (MAS). Investors can participate via two bidding methods:
- Competitive Bids: Investors specify the yield they’re willing to accept. Successful bids are those at or below the cut-off yield determined by the auction.
- Non-Competitive Bids: Investors agree to accept the cut-off yield resulting from the auction, ensuring allocation without specifying a desired yield. Investors specify the amount they want to invest, not the yield.
Once purchased, T-bills are held until maturity (either 6 or 12 months), at which point investors receive the full face value. Since they don’t pay interest, the returns come from the difference between the discounted purchase price and face value.
Applications can be made through local banks such as DBS/POSB, OCBC, and UOB, either online or at branches. It’s essential to check with your bank for specific application deadlines, as they may close 1 to 2 business days before the auction date.
Interest Rate Determination: Factors Influencing T-Bill Yields
T-Bill yields are influenced by various factors, including:
- Market Demand: High demand can lead to lower yields, while low demand may result in higher yields.
- Inflation Rates: Rising inflation often leads to higher yields as investors seek compensation for decreased purchasing power.
- Monetary Policy: MAS’s policy decisions, such as adjusting the Singapore dollar’s appreciation rate, can impact interest rates and, consequently, T-Bill yields.
For instance, recent auctions have shown fluctuations in average yield:
- January 28, 2025: The 6-month T-Bill had a cut-off yield of 3.04%.
- February 13, 2025: The yield decreased to 2.9%.
Maturity & Redemption: What to Expect
T-Bills are short-term instruments with maturities of 6 months or 1 year. Upon maturity, investors receive the full face value of the T-Bill. For example, if you purchase a T-Bill at a discount, you’ll receive its full nominal value at maturity, with the difference representing your earnings.
Can T-Bills be redeemed before maturity?
It’s important to note that T-Bills cannot be redeemed before maturity. However, if you need to liquidate your investment early, you have the option to sell the T-Bill on the secondary market trading T-bills. Keep in mind that selling before maturity may result in a price different from the original purchase price, depending on prevailing market conditions.
Upon maturity, the principal amount is credited to your designated account by the end of the day, typically after 6 pm. For cash applications, this would be your bank account linked to the Central Depository (CDP).
Benefits of Investing in Treasury Bills
Here are the many benefits you get after investing in treasury bills.
1. Treasury Bills Are Risk-Free
Treasury bills are popular short-term Singapore government securities backed by the central government. They are a liability to the government and need to be repaid within the set date.
You enjoy comprehensive security for your funds as they are backed by the Singapore government and are always paid, even during an economic crisis.
2. Short-Term Maturity
Since government treasury bills are short-term fundraising tools, they must be repaid for a maximum of one year. They are a perfect option to generate short-term gains in a secure environment.
You can also sell them in a secondary market, thus allowing you to convert them into cash in an emergency.
3. Non-Competitive Bid
T bills are auctioned by the Monetary Authority of Singapore every week through competitive and non-competitive bidding. This method allows small–scale and retail investors to participate without quoting the price or yield rate.
4. Attractive Yields
T-bills often provide higher returns than traditional savings accounts or fixed deposits (FDs). Their yields fluctuate based on market demand and monetary policy, but recent auctions have shown rates around 2.9% to 3.04%—a strong return compared to:
| Investment Option | Estimated Returns (as of writing) |
| 6-Month T-Bill | 2.9% – 3.04% |
| 1-Year T-Bill | 2.95% |
| Fixed Deposits (FDs) | 2.5% – 3.0% (varies by bank) |
| CPF Ordinary Account (CPF-OA) | 2.5% (fixed) |
| Cash Management Accounts | ~2.5% – 3.2% (varies by provider) |
5. Tax-Free & Hassle-Free Returns
Unlike dividends or other investment income, returns from T-bills are completely tax-free in Singapore, maximizing your earnings. Additionally, banks do not charge fees for cash or SRS applications, making T-bills a cost-effective investment.
Singapore T-Bills vs. Other Investment Options
When considering where to allocate your funds, it’s essential to understand how Singapore Treasury Bills (T-Bills) compare to other low-risk investment options. Below is a comparison of T-Bills with Fixed Deposit (FD), CPF Special Account (CPF-SA), Cash Management Account, and Singapore Savings Bond (SSB).
Comparison Table
| Feature | T-Bills | Fixed Deposits (FDs) | CPF Special Account (CPF-SA) | Cash Management Accounts | Singapore Savings Bonds (SSBs) |
| Issuer | Singapore Government | Banks | Central Provident Fund (CPF) Board | Financial Institutions | Singapore Government |
| Tenure | 6 months or 1 year | 3 months to 12 months | Until retirement age | No fixed tenure | Up to 10 years |
| Interest Rate | Varies by auction; recent yields around 2.9% to 3.04% | Approximately 2.62% per annum, depending on bank and tenure | 4% per annum (fixed) | Approximately 2.5% to 3.2% per annum, depending on the product | 2.97% (average return over 10 years) |
| Minimum Investment | S$1,000 | Varies by bank; typically S$1,000 to S$20,000 | N/A | Varies by provider | S$500 |
| Liquidity | Tradable in secondary market; no early redemption | Penalty for early withdrawal | Withdrawable under specific conditions | High liquidity; funds can be withdrawn anytime | Redeemable monthly plus accrued interest without penalty |
| Risk | Low; backed by Singapore Government | Low; insured up to S$75,000 by SDIC | Low; guaranteed by Singapore Government | Low to moderate; depends on underlying assets | Low; backed by Singapore Government |
| Tax Treatment | Interest is tax-free | Interest is tax-free | Interest is tax-free | Depends on the specific product | Interest is tax-free |
| Funding Sources | Cash, Supplementary Retirement Scheme (SRS), Central Provident Fund (CPF) | Cash | CPF contributions | Cash | Cash, SRS |
Which One Should You Choose?
Your choice depends on your investment horizon, liquidity needs, and risk tolerance:
- Short-Term (≤ 1 year): Consider T-Bills or Fixed Deposits for predictable, low-risk returns.
- Medium to Long-Term (> 1 year): Singapore Savings Bonds or CPF Special Account offer stable returns with government backing.
- High Liquidity Needs: Cash Management Accounts provide flexibility with competitive, though variable, returns.
T-Bill Yields: Historical Trends & Market Performance
T-bill yields have fluctuated in recent months, reflecting shifts in demand, economic conditions, and monetary policy. As of January 28, 2025, the 6-month T-bill cut-off yield stood at 3.04%, but it declined to 2.9% by February 13, 2025. The 1-year T-bill cut-off yield has also varied, settling at 2.95% in the latest auction.
These fluctuations highlight how T-bill rates respond to macroeconomic factors, investor sentiment, and central bank policies.
Historical T-Bill Yield Data (Past 12 Months)
The table below provides a snapshot of T-bill cut-off yields over the last year:
| Auction Date | Tenor | Cut-Off Yield (%) |
| Jan 28, 2025 | 6 months | 3.04% |
| Jan 23, 2025 | 1 year | 2.95% |
| Oct 24, 2024 | 6 months | 2.99% |
| Sep 26, 2024 | 6 months | 2.97% |
| Aug 29, 2024 | 6 months | 3.13% |
These rates reflect the market dynamics of each auction, influenced by supply and demand forces, investor expectations, and central bank actions.
What Affects T-Bill Yields?
1. Economic Conditions
T-bill yields are closely tied to Singapore’s economic environment. Key influencing factors include:
- Inflation Rates: When inflation is high, investors demand higher yields to preserve their purchasing power.
- MAS Monetary Policy: If the Monetary Authority of Singapore (MAS) tightens monetary policy (e.g., by strengthening the Singapore dollar), short-term interest rates may rise, pushing T-bill yields higher.
- Global Interest Rates: Singapore’s yields often follow U.S. Federal Reserve rate decisions, as global capital flows impact demand for safe-haven assets.
2. Demand & Supply in Auctions
- Bid-to-Cover Ratio: A high bid-to-cover ratio (more demand than supply) typically leads to lower yields, as investors are willing to accept lower returns.
- Investor Preferences: T-bills compete with fixed deposits, savings bonds, and money market funds. If these alternatives offer higher or more stable returns, T-bill demand may drop, causing yields to rise to attract investors.
Future Outlook: Will T-Bill Yields Rise or Fall in 2026?
Forecasting T-bill yields requires considering economic trends and monetary policy signals:
- If inflation remains stable and MAS keeps a neutral stance, T-bill yields may stabilize around 2.9%–3.1%.
- If global interest rates rise further, Singapore’s T-bill yields could trend higher, offering investors better returns.
- If demand for T-bills increases due to economic uncertainty, yields may decline as investors accept lower returns for safety.
While yields have fluctuated, T-bills remain an attractive option for short-term investors seeking low-risk, government-backed returns.
How to Apply for Singapore T-Bills
Investing in Singapore Treasury Bills (T-Bills) is a straightforward process, but it’s essential to follow the correct steps to ensure a successful application. Here’s how you can apply:
1. Determine Your Investment Amount
The minimum investment for T-Bills is S$1,000, and purchases must be made in multiples of S$1,000. There is no official maximum limit, but individual allotments may be capped at S$1 million for large investors.
2. Choose Your Application Method
T-Bills can be purchased through three main funding sources:
Cash Purchase
- Available through DBS/POSB, OCBC, and UOB.
- Can be applied via internet banking, ATMs, or bank branches.
- Funds are debited from your bank account upon successful allotment.
SRS (Supplementary Retirement Scheme) Funds
- Investors can use their SRS account to buy T-Bills.
- Applications must be made through the SRS operator (DBS, OCBC, or UOB).
- No fees are charged for T-Bill purchases via SRS.
CPF Investment Scheme (CPFIS)
- CPF-OA (Ordinary Account) funds can be used for T-Bill investments under CPFIS.
- Investors must set up a CPF Investment Account with one of the CPFIS-approved banks (DBS, OCBC, or UOB).
- Some banks may impose administrative fees for CPFIS applications.
3. Application Process & Deadlines
When to Apply?
- T-Bill auctions take place every two weeks for 6-month T-Bills and less frequently for 1-year T-Bills.
- Applications typically close 1-2 business days before the auction date, depending on the bank.
Fees
- No application fees for cash and SRS applications.
- CPFIS applications may incur administrative charges depending on the bank.
4. Auction Results & Allotment
How to Check If You Secured T-Bills?
- MAS publishes auction results on its website on the same day as the auction.
- Investors can check their bank accounts or CDP (Central Depository) account to confirm allotment.
Settlement Process
- Funds are deducted from the investor’s account on the issue date.
- For CPFIS and SRS purchases, T-Bills are reflected in the investment account statement.
- Upon maturity, the principal amount is credited back to the original funding source.
By following these steps, you can efficiently apply for Singapore T-Bills and enjoy their low-risk, short-term returns.
Risks of Investing in Treasury Bills
Although investing in T bills is a good idea, some risks are associated. Some of these risks include:
1. Inflation Risk
Like any other economy, Singapore experiences inflation from time to time. Since T bills are short-term investments, a little inflation can affect your returns negatively.
2. Interest Rate Risk
Generally, when the interest rate rises, the market’s value in debt securities will drop. This makes it hard to sell your T bills without losing your investment.
3. Market Risk
When a country’s economy expands, the equity performance of the stocks appears less risky. Many investors invest in stocks because they offer higher returns than T Bills.
When a country is experiencing a tough economic environment, the T bills become attractive to investors who want to invest in a less-risky environment.
4. Opportunity Cost
Although T bills are considered to be risk-free, they offer low returns on your investment compared to other investment options. When you invest in T bills, you lose a chance to invest your money in a place with a higher interest rate.
Who Should Consider Investing in T-Bills?
T-Bills are ideal for low-risk investors seeking capital preservation with returns that often exceed traditional savings accounts. Retirees and conservative savers benefit from T-Bills’ stable returns without exposure to stock market volatility.
They also suit short-term savers looking for a safe place to park extra cash for 6–12 months while earning competitive yields. Additionally, CPF and SRS investors can use their funds to invest in T-Bills, maximizing returns on idle CPF-OA and SRS balances.
For those prioritizing safety, liquidity, and short-term gains, T-Bills present a low-risk, government-backed investment option.
Conclusion
Singapore T-Bills provide a low-risk, government-backed investment with stable, short-term returns. Offering competitive yields, tax-free earnings, and multiple funding options, they are a smart alternative to fixed deposits and CPF savings. While yields fluctuate with market demand and economic conditions, T-Bills remain ideal for capital preservation and liquidity.
Key Takeaways:
- Singapore T-Bills are government-backed securities that offer capital preservation and short-term returns, making them a safe alternative to fixed deposits and savings accounts.
- T-Bill yields vary based on demand, inflation, and MAS monetary policy, with recent auctions showing rates between 2.9% and 3.04%.
- Investors can buy T-Bills using cash, CPF-OA, or SRS funds through DBS, OCBC, and UOB, with no early redemption but the option to sell on the secondary market.
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