Here's what to expect for the T-bill auction on 28 August

What happened?

There will be an upcoming 6-month Singapore T-bill auction (BS25117E) on 28 August 2025.

The cut-off yield for the most recent 6-month Singapore T-bill declined to 1.59%. We have also seen fixed deposit rates falling in Singapore. 

Many investors have been using Singapore T-bills as a way to generate passive income,so you might be wondering whether it’s worth applying for this latest auction.

In this post, I’ll walk you through some of the latest indicators to help us gauge what the upcoming cut-off yield might be, and if its still be worthwhile applying for the T-bills. 

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Here's what to expect for the Singapore T-bill auction on 28 August

#1 – US bond yields have declined 

The 10-year US government bond yield stood at 4.27% as of 25 August 2025, below levels on 7 August.

While still elevated, bond yields haven fallen on increased expectations of a Fed rate cut. 

According to CME Fedwatch Tool as of 25 Aug 2025, there is a 82.9% probability that the US Federal Reserve will cut interest rates by 0.25 bp in the upcoming meeting.

Likewise, the 1-year US government bond yield moderated at 3.91% as of 25 August 2025.

#2 – Singapore bond yields have dipped further

The 10-year Singapore government bond yield dipped to 1.86% as of 25 August 2025, down from 1.90% recorded on 14 August.

Yields have retreated once again and now sit near their lowest levels in over a year, underscoring continued investor preference for safer assets amid lingering global uncertainties.

The closing yield on the 6-month T-bill was 1.60% on 22 August 2025,  which is close to the cut-off yield of 1.59% in the previous T-bill auction on 14 August.

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 1.60% in the auction on 19 August 2025, below the yield of 1.68% in the auction on 12 August 2025.

#3 – Issuance size higher than the previous auction

The issuance size of the upcoming 6-month Singapore T-bill is $7.7 billion, slightly higher than the previous auction size of $7.5 billion.

We saw a substantial increase in the amount of T-bill applications to S$17.9 billion in the auction on 14 August 2025 from S$12.9 billion in the auction on 31 July 2025.

If demand stays unchanged compared to the previous auction, the larger amount of T-bill issued may help to provide some support to the cut-off yield in the auction.
 

What would Beansprout do?

The closing yield on the 6-month Singapore T-bill was at 1.60% on 22 August 2025. It is close to the cut-off yield in the previous auction.

The closing yield on the 6-month Singapore T-bill is close to the best 6-month fixed deposit rate of 1.60% p.a.

One of the ways to secure a potentially higher yield is to consider the Singapore Savings Bonds (SSB), which offers a 1-year return of 1.82% and average annual return of 2.11% over 10 years, while having the flexibility to redeem prior to maturity. 

The closing yield on the 6-month Singapore T-bill would also be below the interest rates currently offered by the best savings accounts in Singapore. 

As such, I may want to consider more concretely where to park my cash for a better yield, and apply for the upcoming auction only if I've already looked at all my other alternatives. 

To find out other ways to make your savings work hard, check out our guide to best ways to earn a passive income in Singapore.

For CPF investors, the closing yield remains below the breakeven cut-off yield for CPF-OA funds. 

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The 6-month Singapore auction will be held on 28 August (Thursday). We would need to put in our cash applications for the T-bills by 9 pm on 27 August (Wednesday).

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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 27 August (Wed). Read our step-by-step guide to applying via DBS.
• Application for T-bills online using CPF OA via OCBC close at 9pm 27 August (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 26 August (Tues). 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.

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