T-bill yield jumps to 1.46% with lower rate cut hopes

What happened?

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

The cut-off yield of the 6-month Singapore T-bill was at 1.46% in the auction on 26 March 2026. 

This represents a fairly significant increase from the yield of 1.37% in the previous auction on 12 March.

Earlier, I shared that we have seen US government bond yields moving higher with an escalation of the Middle East conflict and lower expectations of interest rate cuts. 

I have also seen more discussion in the Beansprout community about whether it is better to park their cash in T-bills or fixed deposits in the uncertain environment. 

In this article, I'll look at what is driving the increase in T-bill yield, as well as how it compares to the best fixed deposit rates in Singapore as a place to park your cash to earn a higher yield. 

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

#1 - Demand for the Singapore T-bill fell  

Total applications for the 6-month Singapore T-bill fell to S$16.4 billion in the latest auction on 26 March from S$17.3 billion on 12 March.

This would be the lowest level of T-bill applications so far in 2026, on par with the auction on 29 January, and below the recent high of S$19.2 billion on 15 January. 

The amount of competitive bids fell to S$15.1 billion on 26 March from S$16.1 billion two weeks ago.

If you placed a competitive bid below 1.46%, you would receive 100% of your requested T-bill allocation.

If you bid at exactly 1.46%, the allocation would be around 68%.

The amount of non-competitive bids increased slightly to S$1.3 billion on 26 March compared to S$1.2 billion in the auction on 12 March.

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

The amount of T-bills issued was $8.2 billion, decreasing slightly from the S$8.3 billion in previous auction on 12 March.

With the more significant decline in the amount of T-bill applications, the ratio of applications to T-bills issued (bid-to-cover ratio) fell to 2.00x. 

#3 - Median and average yield of bids submitted rose

The median yield of submitted bids rose to 1.39% from 1.29%.

Similarly, the average yield of bids submitted increased to 1.30% from 1.23% in the previous auction.

This follows the bounce in US government bond yields in recent weeks, following the escalation in the Middle East conflict and growing concerns on how the spike in oil prices will lead to higher inflation again. 

At the same time, expectations for interest rate cuts by the US Federal Reserve have also moderated. 

Given the median yield and the cut-off yield, this suggests that a substantial number of bids were placed in the 1.30% to 1.39% range, which is lower than the best 6-month fixed deposit rate in Singapore. 

What would Beansprout do?  

The 6-month T-bill yield jumped to 1.46% in the latest auction.

This is in line with the bounce in US government bond yields, as higher oil prices have led to inflation concerns once again. 

At the same time, demand for the Singapore T-bill has also fallen, likely reflecting the lower yields in the previous auctions. 

With the recent global geopolitical tensions, I have been evaluating my financial plan to make sure it offers me sufficient security and peace of mind.

The first step is to make sure I have sufficient cash put aside for emergency uses through my liquidity pot, where 

Then, I would see how I can earn a higher yield on this pot of emergency cash, while maintaining the liquidity I may need.

Despite the bounce in the T-bill yield to 1.46%, it is still slightly lower than the current best 6-month fixed deposit rate of 1.5%. However, it higher than the best 3-month, 6-month, and 1-year fixed deposit rate.

One other option to consider the Singapore Savings Bonds (SSB), which offers a 1-year return of 1.36% and average annual return of 1.99% over 10 years, while having the flexibility to redeem prior to maturity. We project the 10-year average return of the SSB to rise in the next issuance, reflecting the higher Singapore government bond yields in March.

There are also some savings accounts in Singapore that offer an interest rate of above 1.46% p.a. 

I compare savings accounts, fixed deposits, T-bills, SSBs and money market funds. to find the best places to park your cash in March 2026 here.

By finding the best place to park my cash, I know that I have a stable base for the rest of my portfolio to stay invested through markets ups and downs. 

When this pot is properly set up, I know I can ride through market volatility without being forced to sell my investments at the wrong time.

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