T-bill yield stays at 1.40% in latest 7 May auction as demand declines

What happened?

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

The cut-off yield of the 6-month Singapore T-bill (BS26109N) was at 1.40% in the auction on 7 May 2026. 

This was unchanged from the yield of 1.40% in the previous auction on 23 April.

This means the T-bill yield has remained at a lower level after falling from 1.47% p.a. in the 9 April auction.

I have seen some discussion in the Beansprout telegram community about how the T-bill compares to the best fixed deposit rates in Singapore as a place to park our cash to earn a higher yield. 

In this article, I’ll look at what is keeping the T-bill yield at this lower level, and whether there are better alternatives for investors looking to park their cash.

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

#1 - Demand for the Singapore T-bill declined

Total applications for the 6-month Singapore T-bill declined to S$17.5 billion in the latest auction on 7 May from S$19.2 billion in the T-bill auction on 23 April.

The weaker demand for the T-bill yield is likely due to the lower yield in the previous auction.

The amount of competitive bids fell to S$16.1 billion on 7 May from S$17.9 billion on 23 April.

If you placed a competitive bid below 1.40%, you would receive 100% of your requested T-bill allocation.

If you bid at exactly 1.40%, the allocation would be around 39%.

The amount of non-competitive bids increased to S$1.4 billion from S$1.3 billion in the T-bill auction on 23 April.

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 rose

The amount of T-bills issued was $8.5 billion, increasing from the S$8.4 billion in previous auction on 23 April.

With the decrease in T-bill applications, the ratio of applications to T-bills issued (bid-to-cover ratio) decreased to 2.05x from 2.29x in the previous auction.

#3 - Median and average yield of bids submitted declined

The median yield of submitted bids declined to 1.34% from 1.37% in the previous auction.

Similarly, the average yield of bids submitted decreased to 1.25% from 1.30% in the previous auction.

This suggests that many investors were willing to accept a lower yield in the latest auction.

While US and Singapore government bond yields had edged higher before the auction, the latest T-bill result shows that actual submitted bids remained fairly conservative.

Given the median yield and the cut-off yield, this suggests that a substantial number of bids were placed in the 1.34% to 1.40% range, which is lower than the best 6-month fixed deposit rate in Singapore. 

What would Beansprout do?  

The 6-month T-bill yield has remained at 1.40% in the latest auction.

This was unchanged from the previous auction, even though the larger issuance size could have helped to support the cut-off yield.

The key reason appears to be that investors submitted bids at lower yields, with the median and average yield of bids both declining from the previous auction.

While demand for the Singapore T-bill was still higher than the 9 April auction, it moderated from the previous auction after yields fell back to 1.40%. 

With the recent global geopolitical tensions, I have been reviewing my financial plan to make sure it gives 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. Then, I would see how I can earn a higher yield on this pot of emergency cash, while maintaining the liquidity I may need. Learn more about the liquidity pot here. 

With the T-bill yield remaining at 1.40%, it is lower than the current best 6-month and 9-month fixed deposit rate of 1.50% p.a. and 12-month fixed deposit rate of 1.52% p.a. However, it is still higher than the best 3-month fixed deposit rate.

Another option to consider is the Singapore Savings Bonds (SSB), which offers a 1-year return of 1.46% and average annual return of 2.11% over 10 years, while having the flexibility to redeem prior to maturity.

There are also some savings accounts in Singapore that offer an interest rate of above 1.40% p.a. 

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 market 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.

[Beansprout Exclusive Longbridge Promotion] Get a bonus S$50 FairPrice voucher within 5 working days, plus 10% p.a. interest boost coupon (worth ~S$98) when you sign up for a Longbridge account via Beansprout. Plus, stand a chance to win S$150 CapitaVouchers weekly and the grand prize of S$600 CapitaVouchers. Promo ends on 31 May 2026. T&Cs apply. Learn more about the Longbridge promotion here. 

Do you prefer to park your cash in T-bills or fixed deposits? Share with us in the comments below or in our Telegram group!

If you are new to investing in the T-bill, check out our comprehensive guide to Singapore T-bills to learn more.

Enjoyed this insight? Follow Beansprout on Telegram, Youtube, Facebook and Instagram, and add Beansprout as your preferred source on Google so you never miss an update.