1 year T-bill yield falls to 1.68%. What's driving the decline?
Bonds
By Gerald Wong, CFA • 24 Jul 2025
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The cut-off yield on the latest 1-year Singapore T-bill auction on 24 July 2025 declined to 1.68%.

What happened?
If you've been eyeing T-bills as a place to park your cash, the latest numbers might be a letdown.
The cut-off yield for the 1-year Singapore T-bill (BY25102X) has dropped to 1.68% in the latest auction on 24 July.
The cut-off yield for the 6-month T-bill has also been trending lower.
This has led to some concerns in the Beansprout community, especially amongst investors who are looking for somewhere safe to park their savings.
This latest 1-year T-bill yield is lower compared to the yield of 2.29% in the previous 1-year T-bill auction.
Let us find out what may be driving the decline in the 1-year T-bill yield.
What we learnt from the latest 1-year Singapore T-bill auction
#1 – Slightly stronger demand for 1-year T-bill
Total applications for the latest Singapore 1-year T-bill increased to S$11.3 billion, up from S$11.2 billion in the previous T-bill auction in April 2025.
The amount of non-competitive bids rose slightly to S$0.477 billion from S$0.473 billion in the previous auction.
Since the S$0.477 billion in non-competitive bids fell within the allocation limit, eligible non-competitive bids received a full 100% allocation at a cut-off yield of 1.68%.
The amount of competitive bids rose to S$10.82 billion from S$10.73 billion billion in the previous auction.
This runs counter to the demand for the 6-month T-bill in the recent auction on 17 July where applications declined.
#2 – Lower average and median yield for bids submitted
The average yield of bids submitted fell to 1.44%, down from 2.11% in the April auction.
Similarly, the median yield dropped to 1.60%, from 2.13% previously.
This reflects the sharp decline in short term bond yields we have seen over the past few months, with increasing expectations of potential interest rate cuts by the US Federal Reserve.
#3 – Cut-off yield lower than breakeven yield for CPF OA applications
The cut-off yield of 1.68% 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.
The latest 1-year T-bill yield of 1.68% is also lower the best 1-year fixed deposit rate in Singapore of 2.45% p.a.
With the decrease in the 1-year T-bill yield, the gap between the best deposit rate and the T-bill yield has widened in the latest auction.
What would Beansprout do?
The decline in cut-off yield for the latest 1-year Singapore T-bill to 1.68% appears to be driven by elevated demand as well as lower yields of bids submitted.
With the drop in T-bill yields, the cut-off rate is now below the best 1-year fixed deposit rate in Singapore of 2.45% p.a.
The 1-year T-bill yield of 1.68% is also lower than that of the 6-month T-bill.
As our CPF-Tbill calculator would show, the cut-off yield of the latest 1-year T-bill is below the breakeven for investing our CPF-OA funds in the T-bill.
As such, we would also start to look for other ways to earn a higher yield on our cash.
One of the ways to secure a potentially higher yield is to consider the Singapore Savings Bonds (SSB), which offers a 1-year return of 1.82% and average annual return of 2.29% over 10 years, while having the flexibility to redeem prior to maturity.
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.
If you are looking to invest in a money market fund, you can earn an exclusive $50 Fairprice voucher, a 6% p.a interest boost coupon (worth ~S$30) + 8% p.a interest boost coupon (worth S$263) with Longbridge Cash Plus when you sign up for a Longbridge account via Beansprout. Learn more about the Longbridge promo here.
I also shared how bond funds allow us to gain exposure to a basket of bonds which may see 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.
If you are interested in applying for the T-bill, there will be an upcoming 6-month T-bill auction on 31 July 2025.
You can set a reminder by signing up for our free email alert below
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