T-bill yield falls further to 2.38% as demand stays high

What happened?

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

The cut off yield for the 6-month Singapore T-bill (BS25108N) auction on 24 April fell to 2.38% from 2.50% in the previous auction.

This follows the fall in the 1-year Singapore T-bill yield to 2.29% earlier, amid a fall in bond yields in recent weeks with the trade tariff uncertainty. 

In this post, I will dive deeper to find out more about the results of the latest 6-month Singapore T-bill auction. 

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

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

The total applications for the 6-month Singapore T-bill dropped to S$16.6 billion from S$17.2 billion in the previous auction.

This represents a fairly elevated level of demand for the T-bill, even though it is lower than the recent high of S$23.3 billion during the auction on 13 February 2025. 

The amount of competitive bids decreased to S$15.2 billion from S$15.6 billion in the previous auction. 

If you placed a competitive bid below 2.38%, you would receive 100% of your requested T-bill allocation.

If you bid at exactly 2.38%, the allocation would be around 17%. 

The amount of non-competitive bids also decreased to S$1.4 billion from S$1.6 billion in the previous auction.

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 remains unchanged

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

With total applications declining slightly from S$17.2 billion in the previous auction to S$16.6 billion, the ratio of applications to T-bills issued decreased from 2.32x to about 2.24x

The elevated number of T-bill applications relative to the unchanged issuance size likely contributed to the further decline in the T-bill yield.

#3 - Median yield of bids submitted fell

The median yield of bids submitted fell further to 2.32% from 2.40% in the previous auction.

The average yield of bids submitted increased slightly to 2.16% from 2.10% 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 2.32% to 2.38% range, below the best 6-month fixed deposit rate in Singapore. 

What would Beansprout do? 

The decline in the T-bill cut-off yield to 2.38% appears to be driven by the fall in the short term government bond yields, as reflected in the lower median yield of bids submitted. 

At the same time, demand for T-bills has remained elevated despite the fall in T-bill yield in recent auctions. 

With this fall in the cut-off yield on the T-bill, it is now below the best 6-month fixed deposit rate in Singapore. 

It would also be below the break-even yield for CPF OA applications, based on calculations using our CPF T-bill calculator.

As such, I would be looking for ways to allow my savings to earn a higher yield in a relatively safe way.

For example, many in the Beansprout community have been discussing the UOB Stash account, which offers an interest rate of up to 3.0% p.a. for $100,000 of deposits.

I also shared how bond funds allow us to gain exposure to a basket of bonds which may see potential price appreciation if interest rates come down. 

I would also consider selected high quality Singapore REITs which may offer a higher dividend yield compared to the T-bill yield too. Find the best Singapore REITs here. 

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