Will the T-bill yield fall further in the upcoming auction on 17 Aug?



By Beansprout • 12 Aug 2023 • 0 min read

The closing yield on the 6-month Singapore T-bill has stayed at about 3.75% since the previous auction.

t-bill singapore auction 17 aug 2023

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What happened?

The fall in the cut-off yield on the 6-month Singapore T-bill to 3.75% in the previous auction on 3 August 2023 led to some disappointment amongst investors.

As a result, many in the Beansprout community asked if we might see a further decline in the yield for the upcoming 6-month T-bill auction BS23116F on 17 August 2023. 

Let us look at the latest indicators to find out if it might be worthwhile applying for the upcoming 6-month Singapore T-bill.

Source: MAS


Will the 6-month Singapore T-bill yield fall further in the upcoming auction on 17 Aug?

#1 – US bond yields have fallen slightly

We saw a jump in US government bond yields after the US Federal Reserve raised its benchmark rates in July.

In addition, Fitch’s downgrade of the US credit rating also led to higher US government bond yields.

However, US government bond yields have fallen from recent highs as a moderation in inflation has July has led to increasing conviction amongst investors that the Fed is unlikely to raise rates further at its next meeting in September.  

For example, the US 1-year government bond yield has fallen to 5.35% on 11 August from a recent peak of 5.45%. 

Source: Tradingview


#2 – Singapore T-bill yields have stayed relatively unchanged

Compared to the volatility in US government bond yields, the closing yield on the Singapore T-bill has been relatively stable. 

The closing yield on the Singapore 1-year T-bill has fallen slightly to 3.67% on 11 August from 3.71% on 3 August. 

The closing yield on the Singapore 6-month T-bill was at 3.75% as of 11 August, having stayed at that level for the past week. 

It appears that the Ministry of Trade & Industry’s (MTI) narrowing of Singapore economic growth forecast for 2023 to 0.5% to 1.5% from 0.5% to 2.5% previously has had a fairly limited impact on Singapore government bond yields. 

Source: MAS


The cut-off yield on the 3-month MAS note has gone up slightly to 4.02% in the auction on 8th August from 3.94% on 1st August, but still remains below the recent high of 4.18% in July.  

Source: MAS


#3 – Higher amount of Singapore T-bills available for subscription

We shared earlier that the decline in cut-off yield in the previous 6-month T-bill auction on 3 August is likely due to a combination of more applications received and lower amount of T-bills offered.

The good news for investors in the upcoming 6-month T-bill auction on 17th August is that the total amount of T-bill offered for auction is S$5.6 billion, an increase from S$5.5 billion in the previous auction. 

Source: MAS


This would also be on-par with the amount of T-bill offered for auction on 20th July, when the cut-off yield was at 3.85%.


What would Beansprout do?

The cut-off yield on the Singapore 6-month T-bill has fallen consistently to reach 3.75% in the auction on 3rd August from a recent high of 3.99% on 6th July. 

Thankfully, we have seen a stabilisation in the closing yield on the 6-month T-bill at this level over the past few days, even as the yields on the US government 1-year bond and the Singapore 1-year T-bill have fallen. 


Despite a decline in the cut-off yield in the 6-month government T-bill, it still remains above the current best 6-month fixed deposit rate of 3.50% per annum. For investors who are looking for a better fixed deposit rate, CIMB recently raised its 9-month fixed deposit rate to 3.55% per annum. 

It is also above the promotional interest rate of 3.50% per annum offered by the CIMB FastSaver account, and much higher than the interest rate offered by the GXS Savings Pockets with the cut in interest rate to 2.68% per annum with effect from 17 August.

One of the recent topics of discussion in the Beansprout community is whether investors should make a competitive or non-competitive bid in the T-bill auction.

As a quick recap, all eligible non-competitive bids received 100% allocation in the auction on 3 August, as the total amount of non-competitive bids was below the allocation limit. 

However, investors who put in competitive bids with a bid yield above the cut-off yield were not able to receive their desired allocation for the T-bill. 


There are pros and cons to putting competitive and non-competitive bids, which we have summarized below.

 Competitive bidsNon-competitive bids
What is it?Specify the yield you are willing to accept Specify the amount you want to invest, not the yield
Who might choose this?If you will only invest in the T-bill when the cut-off yield is above your bid yield If you wish to invest in the bond regardless of the return or are unsure of what yield to bid
ProsWill have option to invest elsewhere if the cut-off yield in the auction is lower than the bid yieldWill be allocated first, up to 40% of the total issuance amount
ConsMay not get allocated if bid yield is above the cut-off yield

-May not get full allocation if total non-competitive bids exceed allocation limit 

-Will have to invest in the T-bill even if the cut-off yield is very low in the auction


At the end of the day, we’d decide on putting competitive or non-competitive bids based on whether there are other options that we can consider if we do not get the 6-month T-bill.

If there are other options we are willing to consider such as high yield savings accounts or cash management accounts, then we would not be too worried about not getting our desired allocation of the T-bill and can consider using competitive bids.  Find out how you can make competitive bids here. 

For CPF applications, we can calculate how much more interest we can potentially earn by investing our CPF funds into the T-bill at different interest rates using our T-bill calculator

If we are unsure about how to bid for the T-bill or have limited alternative options, then we can consider non-competitive bids instead.

The auction will be held on 17 Aug (Thur), which means that we would need to put in our cash applications by 9pm on 16 Aug (Wed).

The closing date for T-bill applications using CPF-OA differs across the three local banks.

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