Will T-bill yields stay above 1.9%? What to expect at the Singapore T-bill auction on 8 October

What happened?

The next 6-month Singapore T-bill auction (BS26120W) will be on 8 October.

The previous auction on 24 September saw the cut-off yield for the 6-month Singapore T-bill rise sharply to 1.92%, from 1.70% in the auction on 10 September.

Since then, shorter-term Singapore yields have remained relatively elevated, while US government bond yields have continued to move higher after the US Federal Reserve raised interest rates for the first time since 2023.

This has led to more discussion in the Beansprout community about whether the 6-month T-bill yield could remain around current levels or move even higher in the upcoming auction.

In this article, I’ll look at some of the latest indicators to help us understand what the upcoming cut-off yield might be.

Here's what to expect for the Singapore T-bill auction on 8 October

#1 – US 10-year government bond yields rose sharply

The 10-year US government bond yield rose to 5.24% as of 1 October 2026, higher than its level of 4.95% two weeks ago.

US government bond yields have risen sharply as higher oil prices and resilient economic data added to concerns about inflation and the outlook for interest rates.

Concerns about the US fiscal outlook and the supply of government and corporate debt have also contributed to upward pressure on longer-term bond yields.

On 16 September, the Federal Reserve raised interest rates by 25 basis points to 3.75%–4.00%, its first rate hike since July 2023.

You can check the latest 10-year US government bond yield here.

Similarly, the 1-year US government bond yield rose to 4.45% as of 1 October 2026, from 4.38% two weeks earlier.

#2 – Singapore government bond yields stayed flat

The 10-year Singapore government bond yield was at 2.49% as of 1 October 2026.

You can check the latest 10-year Singapore government bond yield here.

More relevant for the upcoming auction, the closing yield on the 6-month T-bill was at 1.87% on 1 October 2026. This was slightly below the cut-off yield of 1.92% in the previous T-bill auction on 24 September.

The yield on the 3-month MAS bill can also indicate the yields for shorter-maturity Singapore government bonds.

The cut-off yield was at 1.88% in the auction on 29 September 2026, much higher than the cut-off yield of 1.75% on 22 September 2026.

#3 – T-bill issuance size is lower than the previous auction

The issuance size of the upcoming 6-month Singapore T-bill is $8.3 billion, which is lower than $8.4 billion in the previous auction on 24 September.

We saw a fall in T-bill applications to S$15.8 billion in the auction on 24 September, from S$16.6 billion in the auction on 10 September.

With the issuance size unchanged at S$8.4 billion between the two auctions, the bid-to-cover ratio fell in the previous auction on 24 September.

The higher cut-off yield may also have reflected investors submitting bids at higher yields, with the median submitted yield rising to 1.79% in the 24 September auction.

What would Beansprout do?

The closing yield on the 6-month Singapore T-bill was 1.87% on 1 October, slightly below the cut-off yield of 1.92% in the previous auction.

At the same time, short-term Singapore dollar yields have moved higher compared with earlier in September, while global bond yields have also risen.

This means that the cut-off yield for the upcoming 6-month Singapore T-bill auction on 8 October may remain elevated.

Within my Four Pots of Wealth, I would consider T-bills alongside other options for my Liquidity Pot, where my priority is keeping money for near-term needs relatively accessible while earning some interest.

Currently, the closing yield on the 6-month Singapore T-bill of 1.87% is lower than the best 6-month fixed deposit rate of 2.05% for a minimum deposit of $10,000.

With some banks starting to increase savings account interest rates, we were able to find savings accounts in Singapore that offer an interest rate of above 1.87% p.a.

The current Singapore Savings Bond (SSB) offers a first-year interest rate of 1.67% and an average return of 2.45% p.a. if held for 10 years, while offering the flexibility to redeem prior to maturity. 

The 6-month Singapore auction will be held on 8 October (Thursday). We would need to put in our cash applications for the T-bills by 9pm on 7 October (Wednesday).

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