Singapore’s Treasury Bills, or T-Bills, have gained considerable traction among retail investors and high-net-worth individuals alike in recent years. As global interest rate volatility continues and economic uncertainty looms, many Singaporeans are turning to these short-term government securities for their attractive returns, low risk, and liquidity.
In this comprehensive 2025 guide, we delve into the intricacies of Singapore T-Bills—how they work, recent yield trends, how to invest, the pros and cons, and strategies to maximise your returns.
What Are Treasury Bills (T-Bills)?
Treasury Bills are short-term debt instruments issued by the Singapore Government through the Monetary Authority of Singapore (MAS). They are essentially IOUs—when you buy a T-Bill, you are lending money to the government for a fixed term, typically 6 months or 1 year.
Unlike bonds that pay periodic interest (or coupons), T-Bills are sold at a discount to their face value and redeemed at par upon maturity. The difference between the purchase price and the maturity value represents your return.
Example:
- You purchase a 6-month T-Bill with a face value of S$1,000 at S$975.
- At maturity, you receive S$1,000.
- Your return is S$25, or approximately 2.56% annualised.
Key Features of Singapore T-Bills
| Feature | Description |
|---|---|
| Issuer | Singapore Government |
| Tenure | 6 months or 1 year |
| Denomination | Minimum of S$1,000, in multiples thereof |
| Interest | Zero-coupon; returns through capital gain |
| Credit Risk | Extremely low; backed by AAA-rated government |
| Liquidity | Tradable in secondary markets but may have limited activity |
| Taxation | Returns are exempt from income tax in Singapore |
Recent Performance and Yields (As of Mid-2025)
T-Bill yields in Singapore have become increasingly attractive due to rising global interest rates and MAS’s policy stance on inflation. Here’s a snapshot of recent cut-off yields:
| Auction Date | 6-Month T-Bill | 1-Year T-Bill |
|---|---|---|
| June 2025 | 3.78% p.a. | 3.72% p.a. |
| May 2025 | 3.75% p.a. | 3.68% p.a. |
| April 2025 | 3.69% p.a. | 3.65% p.a. |
These rates rival, and in some cases outperform, fixed deposits and even certain CPF-related savings schemes—without the lock-in of longer-tenure instruments.
Why Are Singaporeans Flocking to T-Bills?
1. Safe Haven Amid Uncertainty
With global markets still reeling from post-pandemic fluctuations, geopolitical tensions, and inflation, T-Bills offer a government-guaranteed capital preservation strategy.
2. Competitive Yields
Current T-Bill yields surpass those of traditional fixed deposits from most local banks. For instance, while many 12-month fixed deposit rates hover around 3.2%–3.5%, T-Bills can offer over 3.7%.
3. Short Duration
The 6-month and 1-year durations make T-Bills ideal for short-term cash management—especially for individuals awaiting investment opportunities or large future expenses.
4. CPF-OA Enhancement Strategy
Investors can use their CPF Ordinary Account (OA) savings (which earn 2.5% interest) to purchase T-Bills, potentially achieving higher returns. However, this comes with caveats discussed later.
How to Apply for T-Bills in Singapore
T-Bills are issued via auction, usually every two weeks for 6-month bills, and quarterly for 1-year bills. You can participate through:
1. Cash Application
- Submit bids via internet banking or ATMs through DBS/POSB, OCBC, or UOB.
- Minimum investment: S$1,000.
2. Supplementary Retirement Scheme (SRS)
- Use your SRS funds for tax-efficient investing.
- Apply via your SRS bank (DBS, OCBC, UOB).
3. CPF Ordinary Account (OA)
- Submit an application through your bank branch.
- Note: Funds are temporarily deducted from your CPF OA and returned upon maturity.
Understanding Competitive vs Non-Competitive Bidding
When applying for T-Bills, you can choose either:
Non-Competitive Bid
- You accept the cut-off yield determined by the auction.
- Priority allocation (especially suitable for retail investors).
- Ensures full allocation, up to 40% of total issuance.
Competitive Bid
- You specify your desired yield.
- Allocation only if your bid is within the cut-off range.
- Risk of partial or no allocation.
Tip: Most retail investors prefer non-competitive bids for guaranteed participation.
CPF-OA vs Cash vs SRS: Which Is Best for T-Bills?
| Criteria | CPF-OA | Cash | SRS |
|---|---|---|---|
| Interest Benchmark | 2.5% | 0–3% (savings/fixed deposits) | 2–3% |
| Liquidity | Low (CPF funds locked until 55/65) | High | Medium |
| Tax Benefit | No | No | Yes (tax relief) |
| Best Use | Maximising OA returns | Parking idle funds | Tax planning |
CPF-OA applications have seen a surge lately, but they come with logistical downsides such as lost accrued interest and longer processing times. Investors should weigh whether the incremental yield from T-Bills outweighs the CPF’s 2.5% annual return, especially if their bid isn’t fully allocated.
Secondary Market Trading
T-Bills can technically be traded on the Singapore Exchange (SGX), but this is rarely done due to limited demand. Most retail investors hold to maturity to receive full principal and implied interest.
Risks and Considerations
Despite being one of the safest investments around, T-Bills are not completely risk-free. Here’s what to watch for:
1. Reinvestment Risk
Returns are fixed at purchase. If future T-Bill yields drop, reinvesting may not be as favourable.
2. Opportunity Cost
Locking funds into T-Bills means missing out on other investments—like equities or high-yield REITs—if markets rally.
3. CPF-OA Trade-Off
Losing out on CPF interest during the T-Bill holding period could mean lower returns if the cut-off yield is too close to 2.5%.
4. Allocation Uncertainty
You may not get full allocation, especially during periods of high demand. This is particularly pertinent with CPF-OA where funds may be “locked up” temporarily.
Tips to Maximise Your T-Bill Returns
- Use Non-Competitive Bids
Avoid missing out altogether due to overly aggressive yield expectations. - Apply Early (Especially with CPF-OA)
CPF-related applications can be rejected if not submitted in time. Banks recommend applying at least 3 working days before the auction deadline. - Ladder Your Investments
Stagger T-Bill purchases across multiple auctions for regular liquidity and to capture favourable yields over time. - Compare Across Instruments
Always benchmark T-Bill yields against fixed deposits, CPF interest, and short-term bond ETFs before committing. - Keep Track of Auction Dates
The MAS website provides an auction calendar. Mark your calendar to avoid missing opportunities.
Alternatives to T-Bills in Singapore
If T-Bills are oversubscribed or yields decline, consider these alternatives:
- Singapore Savings Bonds (SSBs) – Longer duration, step-up interest, redeemable anytime.
- Fixed Deposits – Simpler process, slightly lower yields.
- Money Market Funds – Highly liquid, potentially higher returns but with fund fees.
- Short-Term Bond ETFs – Tradable on SGX, diversified but subject to market risk.
Conclusion: Are T-Bills Right for You in 2025?
T-Bills are an excellent low-risk investment vehicle for Singaporeans seeking capital preservation and modest returns over a short horizon. With yields currently hovering near 4% and the backing of the Singapore Government, they remain one of the most accessible and secure savings tools available.
However, investors must be mindful of application procedures, CPF-OA implications, and the broader macroeconomic context. When deployed strategically, T-Bills can form a strong defensive layer in any diversified portfolio—particularly during times of uncertainty.
Whether you’re a retiree safeguarding your nest egg, a young adult managing CPF-OA funds, or simply a cautious investor waiting out market turbulence, Singapore T-Bills are worth your consideration in 2025.
