Here's what to expect for the 1-year T-bill auction on 15 October

What happened?

The next 1-year Singapore T-bill auction (BY26103X) is on 15 October.

We have seen the Singapore T-bill yield rising over the past few months with the latest 6-month Singapore T-bill cut-off yield reaching 1.90% in the latest auction.

Meanwhile, fixed deposit rates have continued to rise, giving us more options for earning interest on our spare cash.

I have seen some discussion in the Beansprout community about whether the 1-year T-bill yield could move even higher in the upcoming auction. 

In this article, I will be looking at some of the latest indicators to find out if it is worthwhile applying for the upcoming 1-year Singapore T-bill auction (BY26103X) on 15 October 2026, and how it compares with the 6-month Singapore T-bill, fixed deposits and Singapore Savings Bonds.

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What is the likely yield on the 1-year Singapore T-bill?

Like the 6-month Singapore T-bill yield, the 10-year Singapore government bond yield has generally moved higher over the past three months.

After hovering around 2.1% in early July, the yield rose through July before fluctuating in August and September. It subsequently climbed to about 2.49% as of 8 October 2026.

Despite some short-term fluctuations, the overall upward trend has brought the yield close to its highest level over the past year.

This upward trend comes against a backdrop of higher global bond yields, as rising oil prices amid geopolitical uncertainty have added to inflation concerns and expectations of further US interest rate hikes.

Turning to the 1-year Singapore T-bill, its closing yield was 1.74% p.a. as of 8 October 2026, slightly above the cut-off yield of 1.68% p.a. in the previous 1-year T-bill auction in July.

It is worth noting that the eventual cut-off yield in the auction may differ from the closing yield, as it will depend on the bids in the auction.

Is the 1-year Singapore T-bill better than the 6-month T-bill?

Rather than applying for the 1-year T-bill, one option to consider is to invest in two consecutive tranches of 6-month T-bills.

Specifically, we could invest in the upcoming 6-month T-bill auction on 22 October 2026, which would mature on 27 April 2027. We could then choose to reinvest based on the prevailing interest rates at that time.

This gives us the opportunity to earn a higher return if yields rise. However, if yields fall, the second 6-month T-bill could offer a lower return.

In comparison, a 1-year T-bill fixes the return for the full tenure, removing the need to reinvest after six months.

The choice therefore depends on whether I prefer certainty over a full year or the flexibility to reassess my options after six months.

You can find out how to to construct a T-bill and SSB bond ladder here. 

However, it is now less certain whether we will see further interest rate cuts, or potentially interest rate hikes in the next 6 months. 

With the current closing yield of 1.74% on the 1-year Singapore T-bill being lower than the cut-off yield of 1.90% in the most recent 6-month T-bill auction, I will ask myself if I would want to lock in this lower rate now for 12 months.

According to the latest US interest rate expectations, markets now expect the US Federal Reserve to keep interest rates unchanged at its October meeting. However, by December 2026, futures pricing suggests about a 83% probability of at least one 0.25 percentage point rate hike, with the most likely target range rising to 4.00% to 4.25%.

With significant economic uncertainty with global geopolitical developments, we will have to keep a close watch on interest rate trends.

With the US 1-year bond yield rising rapidly in the past few weeks, we may see a reflection of that in the upcoming 1-year T-bill auction as well.

Is the 1-year Singapore T-bill better than fixed deposits?

Some Singapore banks have raised their fixed deposit rates in October. Currently, the best 1-year fixed deposit rate we found is at 2.08% p.a. 

This would be higher than the latest closing yield of 1.74% on the 1-year T-bill.

For shorter tenures, the best 6-month fixed deposit rate is at 2.05%.

Is the 1-year Singapore T-bill better than Singapore Savings Bonds?

The current issuance of the Singapore Savings Bonds (SSB) offer a 1-year return of 1.67%.

This is close to the current closing yield on the 1-year Singapore T-bill.

Apart from offering a 1-year return of 1.67%, the latest SSB also allows us to lock-in a rate of 2.45% over 10 years, while having the flexibility to redeem prior to maturity. 

What would Beansprout do?

The closing yield on the 1-year Singapore T-bill was 1.74% p.a. as of 8 October 2026, above the cut-off yield of 1.68% in the previous 1-year T-bill auction in July.

This comes as government bond yields have risen globally, with the US 1-year government bond yield also moving higher in recent weeks.

Within my Four Pots of Wealth, I would consider T-bills alongside other options for my Liquidity Pot. My priority is to earn interest while keeping enough cash accessible for unexpected expenses and near-term needs.

For the 1-year T-bill, I would only set aside money that I am comfortable holding until maturity.

The current closing yield of the 1-year Singapore T-bill is 1.74%, which is lower than the recent 6-month T-bill cut-off yield of 1.90%. However, I may still consider it if I value the certainty of fixing my return for 12 months and do not want to make another reinvestment decision when a 6-month T-bill matures.

At the same time, the 1-year T-bill closing yield is also lower than the best 12-month fixed deposit rate, which is currently at 2.08% p.a.

One of the other options to consider is the Singapore Savings Bonds (SSB), which offers a 1-year return of 1.67% and average annual return of 2.45% over 10 years, while having the flexibility to redeem prior to maturity. 

Ultimately, the best option depends on whether I prioritise a locked-in yield today, or greater flexibility for my cash.

With my liquidity pot properly set up, I can stay invested through market ups and downs without worrying about being forced to sell my investments at the wrong time. Learn more about the liquidity pot here. 

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The 1-year Singapore T-bill auction is currently open.

As cash applications for the T-bill close one business day before the auction date, we would need to put in our cash applications for the T-bill by 9pm on 14 October (Wednesday).

To learn more about T-bills and find out how to apply, check out our comprehensive guide to T-bills.

For a broader introduction to bonds, read our beginner’s guide to bond investing in Singapore, including how coupons, yields and duration work.

Would you choose a 1-year T-bill, a shorter 6-month T-bill or a fixed deposit for your spare cash? Share with us in the comments below or in our Telegram group!

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