1 year T-bill yield rises to 1.44%. What's driving the bounce?

What happened?

The results of the latest 1-year Singapore T-bill auction are out.

The cut-off yield for the 1-year Singapore T-bill (BY26100S) rose to 1.44% in the auction on 22 January.

Earlier, we shared that the 1-year Singapore T-bill yield is close to the 6-month Singapore T-bill yield.

This latest 1-year T-bill yield is higher compared to the yield of 1.35% in the previous 1-year T-bill auction.

In this article, we will find out what is driving the bounce in the Singapore T-bill yield, and if there are other ways to earn a yield of above 1.44%.

What we learnt from the latest 1-year Singapore T-bill auction

#1 – Weaker demand for 1-year T-bill compared to the previous auction

Total applications for the latest Singapore 1-year T-bill decreased to S$12.1 billion, down from S$13.1 billion in the previous 1-year T-bill auction on 15 Oct 2025.

The amount of non-competitive bids rose slightly to S$417 million from S$362 million in the previous auction.

Since the S$417 million in non-competitive bids fell within the allocation limit, eligible non-competitive bids received a full 100% allocation at a cut-off yield of 1.44%. 

The amount of competitive bids fell to S$11.7 billion from S$12.7 billion in the previous auction.

However, demand remains elevated compared to the auctions in January, April, and July 2025.

#2 – Higher average and median yield for bids submitted

The average yield of submitted bids rose to 1.27%, up from 1.16% in last October's auction.

Similarly, the median yield increased to 1.33%, from 1.20% previously.

This marks a reversal from the general decline in short-term bond yields seen for most of 2025. 

#3 – Cut-off yield lower than breakeven yield for CPF OA applications

The cut-off yield of 1.44% is lower than the breakeven cut-off yield for T-bills applications using CPF OA.

As a recap, the breakeven cut-off yield for T-bill applications using CPF is higher than the current CPF OA rate of 2.5%, due to the potential loss of additional CPF interest when applying for T-bill using CPF savings. 

What would Beansprout do? 

The rise in cut-off yield for the latest 1-year Singapore T-bill to 1.44% appears to be driven by weaker demand compared to the previous auction. 

We have also seen an increase in the yields of bids submitted, inline with the bounce in Singapore T-bill yields in recent months. 

With the bounce in the 1-year T-bill yield, the cut-off rate is now close to the best 1-year fixed deposit rate in Singapore of 1.45% p.a.

The 1-year T-bill yield of 1.44% is also slightly higher than that of the latest 6-month T-bill yield of 1.39% on 15 January. Earlier, we shared that the 1-year T-bill has lower reinvestment risks compared to the 6-month T-bill, especially if interest rates were to decline further in the coming months. 

While the yield has edged higher, we remain keen on exploring alternative instruments that may offer a higher yield.

One of the ways to secure a lock in higher yields over the long-term is to consider the Singapore Savings Bonds (SSB), which offers a 1-year return of 1.35% and average annual return of 2.25% over 10 years, while having the flexibility to redeem prior to maturity. 

To compare between fixed deposits, T-bills, savings account and SSBs, check out our guide to the best places to park your cash in January 2026.

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