Will the T-bill yield stay above 3% in the auction on 13 Feb?

What happened?

There seems to be more investors looking at Singapore T-bills in recent weeks.

This may be because we have seen a rebound in the yield on the previous 6-month T-bill auction to 3.04%, 

This is also higher than the best fixed deposit rate in Singapore of 2.90% p.a. 

As a result, there have been questions in the Beansprout community about whether it might be worthwhile applying for the upcoming 6-month Singapore T-bill auction (BS25103S) on 13 February 2025.

In this post, I will be looking at the latest indicators to find out what might be the expected yield in the T-bill auction. 

Stay updated on the T-bill

Sign up to receive a free email reminder when the next Singapore T-bill auction is open.

Subscription preferences

• Reminder for Tbill

Here's what to expect for the Singapore T-bill auction on 13 Feb

#1 – US bond yields have declined slightly

The 10-year US government bond yield was at 4.4% on 7 February, having declined from the close of 4.5% at the end of January.

This would be below the recent peak of 4.8%, and also below where it was at the start of the year. 

The decline could be due to a flight to safety and buying of US government bonds due to concerns about the impact of US President Trump's tariff war. 

On the other hand, US short-term bond yields have remained stable. 

The 1-year US government bond yield has stayed at around 4.2% in the past few weeks.

#2 – Closing yield on 6-month Singapore T-bill has fallen slightly

We have seen a similar trend in Singapore government bond yields, where longer term bond yields have retreated. 

The Singapore 10-year government bond yield declined to 2.8% from 2.9% at the end of January, and is also now below where it was at the start of the year. 

At the same time, shorter maturity bond yields have also declined slightly. 

The closing yield on the 6-month T-bill was 2.98% on 6 February, below the cut-off yield of 3.04% in the previous T-bill auction on 28 January.

The yield on the 3-month MAS bill can also give an indication of the yields for shorter-maturity Singapore government bonds.

The cut-off yield was at 3.05% in the auction on 4 February, falling from 3.08% in the auction on 27 January, and representing the lowest level in the past two months. 

#3 – Slightly larger issuance size compared to the previous auction

The issuance size of the upcoming 6-month Singapore T-bill is $7.3 billion, higher than S$7.2 billion in the previous auction. 

This would also represent the largest amount of 6-month T-bills being auctioned. 

We saw a decline in the amount of T-bill applications to $15.3 billion in the auction on 28 Jan, likely due to fewer CPF applications on concerns about potential loss of additional CPF interest. 

Should applications rebound significantly in the upcoming auction, this may put further downward pressure on the cut-off yield for the T-bill. 

What would Beansprout do? 

The closing yield on the 6-month Singapore T-bill was at 2.98% on 6 February, slightly below the cut-off yield in the previous auction.

This is because of the broad decline in bond yields we have seen in the past two weeks, with a flight to safety towards US government bonds following the escalation in tariff war.  

At the same time, a rebound in T-bill applications in the upcoming auction may further put pressure in the T-bill yield. 

Despite the fall in the closing yield on the 6-month Singapore T-bill yield, it remains above the best 6-month fixed deposit rate of 2.75% p.a., as banks have cut their interest rates in February 2025. 

The yield on the 6-month Singapore T-bill would be close to the interest rates offered by the best savings account in Singapore. 

For CPF investors, the closing yield is also above the breakeven cut-off yield for CPF-OA funds. 

You can find out how much more interest you can potentially earn on the Singapore T-bill using our CPF-T-bill calculator.

The 6-month Singapore auction will be held on 13 February (Thursday). We would need to put in our cash applications for the T-bills by 9 pm on 12 February (Wednesday).

Stay updated on the next T-bill

Sign up to receive a free email reminder when the next Singapore T-bill auction is open.

Subscription preferences

• Reminder for Tbill

Applications for the T-bills using CPF-OA will close 1-2 business days before the auction date, and the dates differ across the three local banks.

• Applications for T-bills online using CPF OA via DBS close at 9pm on 12 Feb (Wed). Read our step-by-step guide to applying via DBS.
• Application for T-bills online using CPF OA via OCBC close at 9pm on 12 Feb (Wed). Read our step-by-step guide to applying via OCBC
• Applications for T-bills online using CPF OA via UOB close at 9pm on 11 Feb (Tue). Read our step-by-step guide to applying via UOB. 

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

Join our Beansprout Telegram group for the latest insights on Singapore stocks, REITs, bonds and ETFs.