T-bill yield falls to 2% as demand eases

What happened?

The results for the latest 6-month Singapore T-bill auction are out. 

At the auction on 19 June 2025, the cut off yield for the 6-month Singapore T-bill (BS25112X) fell to 2.0%.

This represents a further decline from 2.05% in the previous auction, and reflects the lower yields we have seen in recent weeks. 

Looking back, this would also be the lowest 6-month T-bill yield since June 2022.

In this post, I'll explore the latest 6-month Singapore T-bill auction results and what they mean for investors.

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

#1 -Demand for the Singapore T-bill fell further

The total applications for the 6-month Singapore T-bill fell to S$15.9 billion in the latest auction on 19 June from S$17.9 billion recorded on 5 June.

This represents a significant fall from the recent peak of S$23.3 billion on 13 February 2025, as yields have come down significantly in recent months.

The amount of competitive bids decreased to S$14.6 billion from S$16.4 billion in the previous auction. 

If you placed a competitive bid below 2%, you would receive 100% of your requested T-bill allocation.

If you bid at exactly 2%, the allocation would be around 11%. 

The amount of non-competitive bids decreased to S$1.3 billion.

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 decreased slightly

The amount of T-bills issued was at $7.5 billion, lower the previous auction of $7.6 billion. 

With total applications decreasing from S$17.9 billion in the previous auction to S$15.9 billion in this latest auction, the ratio of applications to T-bills issued (bid-to-cover ratio) decreased from approximately 2.35x to 2.13x.

#3 - Median yield of bids submitted fell

The median yield of bids submitted fell further to 1.95% from 1.99% in the previous auction.

The average yield of bids submitted also fell slightly to 1.88% from 1.90% in the previous auction.

The fall in the median and average yield of bids submitted would be consistent with the fall in short term bond yields we have seen in recent weeks. 

Given the median yield and the cut-off yield, this suggests that a substantial number of bids were placed in the 1.95% to 2% range, below the best 6-month fixed deposit rate in Singapore. 

What would Beansprout do? 

The drop in the T-bill cut-off yield to 2.0% seems to reflect falling short-term government bond yields, as seen in the lower median and average yield of bids submitted.

At the same time, the lower yields in recent auctions also led to a decline in demand for the T-bill.

Following the  decline in T-bill cut-off yields, yields have now dipped below the best 6-month fixed deposit rate in Singapore of 2.15% p.a. 

They also fall short of the break-even yield for CPF OA applications, based on calculations using our CPF T-bill calculator.

In light of this, I would consider exploring alternative ways to grow my savings by earning a higher yield in a relatively safe way.

For example, some savings accounts continue to offer an interest rate of above 2.0% p.a, even though banks have been cutting the interest rates in recent months. 

Another popular option amongst investors is money market funds, which aim to provide higher potential returns compared to savings accounts, and greater flexibility compared to fixed deposits. 

There are a few ongoing promotions which will end this month:

• Syfe Cash+ Flexi is now offering promotional 4.1% p.a. fixed returns for 90 days on the first S$20,000 for new users. Learn more Syfe Cash+ Flexi here. 

• Longbridge is currently running a promotion offering a 6% p.a. interest boost coupon for 60 days and a bonus 6% p.a on your first S$2,000. Learn more about how you can also earn welcome rewards including a $50 exclusive voucher here. 

If you are looking to lock in higher interest rates for a longer period of time, the latest Singapore Savings Bonds (SSB)s offer a 10-year average return of 2.49% p.a. 

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