T-bill yield falls to 1.85%. What's driving the decline?
Bonds
By Gerald Wong, CFA • 04 Jul 2025
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The cut-off yield for the latest 6-month Singapore T-bill on 3 July fell further to 1.85% p.a.

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 (BS25113W) fell to 1.85% in the auction on 3 July 2025
Earlier, we shared that the yield on the Singapore T-bill has been falling as investors look for safe haven assets to park their cash.
Despite the fall in yield, the T-bill still remains a popular option for investors to earn passive income in Singapore.
In this post, I'll explore the latest 6-month Singapore T-bill auction results and what they mean for investors.
What we learnt from the latest 6-month Singapore T-bill auction
#1 -Demand for the Singapore T-bill increased
The total applications for the 6-month Singapore T-bill increased to S$16.1 billion in the latest auction on 3 July from S$15.9 billion recorded on 19 June.
Despite the increase, it is still far from the recent peak of S$23.3 billion on 13 February 2025, as yields have come down significantly in recent months.
The amount of competitive bids remained the same at to S$14.6 billion.
If you placed a competitive bid below 1.85%, you would receive 100% of your requested T-bill allocation.
If you bid at exactly 1.85%, the allocation would be around 41%.
The amount of non-competitive bids increased to 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 remained the same
The amount of T-bills issued was at $7.5 billion, which is the same as the previous auction.
With total applications increasing from S$15.9 billion in the previous auction to S$16.1 billion in this latest auction, the ratio of applications to T-bills issued (bid-to-cover ratio) increased from approximately 2.13x to 2.15x.
#3 - Median yield of bids submitted fell
The median yield of bids submitted fell further to 1.76% from 1.95% in the previous auction.
The average yield of bids submitted also fell to 1.64% from 1.88% 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 1.76% to 1.85% 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 1.85% seems to reflect falling short-term government bond yields, as seen in the lower median and average yield of bids submitted.
Following the decline in T-bill cut-off yields, yields have now dipped below the best 6-month fixed deposit rate in Singapore of 2.20% p.a.
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 earn passive income in Singapore
For example, some savings accounts continue to offer an interest rate of above 1.85% p.a, even though banks have been cutting the interest rates in recent months.
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 on S$2,000 for 90 days and a bonus 8% p.a on your deposits up to S$10,000. 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 2.29% p.a.
Join the Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs.
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