Will the T-bill yield rebound in the auction on 5 June?

What happened?

There will be an upcoming 6-month Singapore T-bill auction (BS25111T) on 5 June 2025.

Recently, we've seen the cut-off yield for the Singapore T-bill decline to 2.20%. However, demand for the T-bill remains high even with the fall in the T-bill yield.

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 it might still be worthwhile applying for the T-bills. 

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Here's what to expect for the Singapore T-bill auction on 5 June

#1 – US bond yields have declined slightly compared to two weeks ago

The 10-year US government bond yield was at 4.47% as of 28 May 2025, a slight decline from 4.54% two weeks earlier.

This indicates a modest retreat after a brief upward trend that began in early April, as markets reassess the likelihood of delayed Federal Reserve rate cuts amid US trade tensions and persistent inflationary concerns.

Nonetheless, yields appear to be stabilising following the sharp spike triggered by the earlier tariff announcements made by US President Donald Trump.

However, yields on shorter-term US government bonds have edged higher. 

The 1-year US government bond yield stood at 4.17% as of 28 May 2025, up slightly from 4.14% two weeks earlier.

#2 – Singapore bond yields have pulled back

The 10-year Singapore government bond yield declined to 2.42% as of 28 May 2025, down from 2.63% on 15 May 2025 and reversing the earlier rebound seen in early May.

Yields remain well below the 2.90% levels observed in February, suggesting that investor expectations for rate cuts may still be influencing the market.

The closing yield on the 6-month T-bill was 2.20% on 27 May 2025, it is the same as the cut-off yield of 2.20% in the previous T-bill auction on 22 May.

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 2.19% in the auction on 27 May 2025,  continuing its decline from 2.48% in the auction on 22 April 2025.

#3 – Higher issuance size compared to the previous auction

The issuance size of the upcoming 6-month Singapore T-bill is $7.6 billion, higher than the previous auction which was at $7.5 billion.

We saw a slight increase in the amount of T-bill applications, increasing to S$18.1 billion in the auction on 22 May 2025, up from S$17.1 billion on 7 May 2025.

If demand continues to rise, we may see downward pressure on the cut-off yield in the upcoming T-bill auction.

What would Beansprout do?

The closing yield on the 6-month Singapore T-bill was at 2.20% on 27 May 2025. It is the same as the cut-off yield of 2.20% in the previous auction.

The closing yield on the 6-month Singapore T-bill yield is now slightly below the best 6-month fixed deposit rate of 2.35% 

However, bond yields globally remain highly volatile with uncertainty on the trade tariffs, and the cut-off yield in the T-bill auction will depend on the eventual demand for the T-bill.  

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. 

You can find out the best places to park your savings by comparing between T-bills, fixed deposits and savings accounts here, or join the Beansprout community to get the latest updates on latest rates in June. 

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

You can find out what is the breakeven yield on the Singapore T-bill for CPF applications using our CPF-T-bill calculator.

The 6-month Singapore auction will be held on 5 June (Thursday). We would need to put in our cash applications for the T-bills by 9 pm on 4 June (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 4 June (Wed). Read our step-by-step guide to applying via DBS.
• Application for T-bills online using CPF OA via OCBC close at 9pm 4 June (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 3 June (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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