T-bill yield falls further to 2.20% as demand continues to rise

What happened?

Results for the latest 6-month Singapore T-bill auction have just been announced.

At the auction on 22 May 2025, the cut off yield for the 6-month Singapore T-bill (BS25110H) declined to 2.20%,  down again from 2.30% in the previous auction.

This drop comes on the back of a broader fall in bond yields in recent weeks, including the 1-year Singapore T-bill yield that dipped to 2.29% earlier.  

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

Stay updated on the next T-bill

Sign up to receive a free email reminder when the next Singapore T-bill auction is open.

Subscription preferences

• Reminder for Tbill

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

#1 -Demand for the Singapore T-bill increased again

The total applications for the 6-month Singapore T-bill rose to S$18.1 billion, up from S$17.1 billion in the previous auction.

This shows continued strong demand. That said, the demand is lower than the recent high of S$23.3 billion during the auction on 13 February 2025. 

The amount of competitive bids increased to S$16.6 billion from S$15.6 billion in the previous auction. 

If you placed a competitive bid below 2.20%, you would receive 100% of your requested T-bill allocation.

If you bid at exactly 2.20%, the allocation would be around 59%. 

The amount of non-competitive bids remained the same at S$1.5 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 increased slightly.

The amount of T-bills issued was at $7.5 billion, higher the previous auction of $7.4 billion. 

With total applications rising from S$17.1 billion in the previous auction to S$18.1 billion, the ratio of applications to T-bills issued (bid-to-cover ratio) increased from approximately 2.31x to 2.41x.

The elevated demand for T-bills, alongside a slight increase in issuance size, likely contributed to the cut-off yield of 2.20% p.a.

#3 - Median yield of bids submitted fell

The median yield of bids submitted fell further to 2.18% from 2.24% in the previous auction.

The average yield of bids submitted also fell to 2.07% from 2.09% 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 2.18% to 2.20% 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 2.20% seems to reflect falling short-term government bond yields, as seen in the lower median yield of bids submitted.

Despite the lower yields in recent auctions, demand for T-bills has remained elevated.

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

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.

One option that's been actively discussed in the Beansprout community is the UOB Stash account, which offers an interest rate of up to 3.0% p.a. for $100,000 of deposits.

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. 

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 2.56% p.a. 

Join the Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs.