T-bill yield edges up to 1.37%. What's driving the bounce?

What happened?

I've seen more discussion about the Singapore T-bill in recent weeks.

With the spike in market uncertainty amid the Middle East conflict, it seems like some members in the Beansprout community are starting to look at the Singapore T-bill as a place to park their cash once again. 

This is why I paid more attention to the latest Singapore 6-month T-bill auction on 12 March 2026, where the cut-off yield was at 1.37%.

This represents a slight increase from the yield of 1.36% in the previous auction on 26 February, and  in the auction on 12 February.

In this article, I'll look at what is driving the slight increase in T-bill yield, as well as how it compares to the best fixed deposit rates in Singapore as a place to park your cash to earn a higher yield. 

What we learnt from the latest 6-month Singapore T-bill auction

#1 - Demand for the Singapore T-bill dropped 

Total applications for the 6-month Singapore T-bill fell to S$17.3 billion in the latest auction on 12 March from S$17.6 billion on 26 February. 

Despite the lower T-bill demand compared to the previous auction, applications for the T-bill remain elevated, and above levels seen for most of the past six months. 

The amount of competitive bids dropped to S$16.1 billion on 12 March from S$16.4 billion two weeks ago.

If you placed a competitive bid below 1.37%, you would receive 100% of your requested T-bill allocation.

If you bid at exactly 1.37%, the allocation would be around 2%.

The amount of non-competitive bids remains the same at S$1.2 billion on 12 March as the auction on 26 February.

Since the amount of non-competitive bids was within the allocation limit, all eligible non-competitive bids received full allocation for the T-bill. 

#2 - T-bills issued increased

The amount of T-bills issued was $8.3 billion, increasing slightly from the previous auction on 26 February.

With the drop in the amount of T-bill applications but increase in amount of T-bill issued, the ratio of applications to T-bills issued (bid-to-cover ratio) dropped to 2.08x. 

#3 - Median and average yield of bids submitted fell

The median yield of submitted bids dropped to 1.29% from 1.32%.

Similarly, the average yield of bids submitted dropped to 1.23% from 1.25% in the previous auction.

Interestingly, Singapore government bond yields have remained low despite the bounce in the US government bond yields we have seen in the previous weeks, following the escalation in the Middle East conflict and growing concerns on how the spike in oil prices will lead to higher inflation again. 

Given the median yield and the cut-off yield, this suggests that a substantial number of bids were placed in the 1.23% to 1.29% range, which is lower than the best 6-month fixed deposit rate in Singapore. 

What would Beansprout do?  

The 6-month T-bill yield has edged up slightly to 1.37% in the latest auction.

However, this is due mainly to the larger T-bill issuance size as well as lower demand for the T-bill.

Compared to the bounce in US government bond yields, Singapore government bond yields remain low despite the concerns about how higher oil prices may lead to higher inflation.

With the recent global geopolitical tensions, I have been evaluating my financial plan to make sure it offers me sufficient security and peace of mind.

The first step is to make sure I have sufficient cash put aside for emergency uses through my liquidity pot, where I would then put into a mix of savings accounts, fixed deposits, T-bills, SSBs and money market funds.

Then, I would see how I can earn a higher yield on this pot of emergency cash, while maintaining the liquidity I may need.

From what I see in the latest auction, the T-bill cut-off yield of 1.37% is lower than the current best 6-month fixed deposit rate in Singapore of 1.50% p.a..

One other option to consider the Singapore Savings Bonds (SSB), which offers a 1-year return of 1.36% and average annual return of 1.99% over 10 years, while having the flexibility to redeem prior to maturity. 

As the T-bill yield remains low, we would be looking for other places to park our spare cash. You can check out our guide to the best places to park your cash in March 2026.

For example, we were still able to find savings accounts in Singapore that offer an interest rate of above 1.37% p.a. 

By finding the best place to park my cash, I know that I have a stable base for the rest of my portfolio to stay invested through markets ups and downs. 

When this pot is properly set up, I know I can ride through market volatility without being forced to sell my investments at the wrong time.

[Beansprout Exclusive Longbridge Promotion] Get bonus S$50 FairPrice voucher within 5 working days, plus 5% p.a. interest boost coupon (worth ~S$100) when you sign up for a Longbridge account via Beansprout. Plus, stand a chance to win a 1g gold bar worth S$260. Promo ends on 31 March 2026. T&Cs apply. Learn more about the Longbridge promotion here. 

Enjoyed this insight? Follow Beansprout on Telegram, Youtube, Facebook and Instagram, and add Beansprout as your preferred source on Google so you never miss an update.