Not long ago, Singapore Treasury Bills (T-Bills) were the hottest short-term investment in town. When yields touched 3.7% in mid-2024, investors queued in droves to secure a piece of the action. But fast forward to August 2025, and the story has completely changed. The most recent six-month T-Bill auction closed at just 1.59%—a rate that now trails many fixed deposit offerings.
This sharp drop has left investors questioning whether T-Bills still deserve their reputation as a go-to safe haven. If you’re grappling with the same doubts, you’re not alone. Here are the 12 most common questions Singaporeans are asking about T-Bills today—and what the answers mean for your money.
1. Are T-Bills worth considering at 1.59%?
The truth: T-Bills remain among the safest instruments in Singapore, backed by the Government’s AAA credit rating. However, “safe” does not always equal “smart.”
At current yields, you’re barely keeping pace with inflation. The drop from 3.7% to 1.59% within a year represents a 57% decline in returns, showing just how volatile auction outcomes can be. Meanwhile, fixed deposits now offer up to 2.45% for 12 months—meaning you might be better off elsewhere.
Quick takeaway: T-Bills are still safe, but they’re no longer the most rewarding short-term option.
2. Is it wise to use CPF-OA funds for T-Bills?
Not anymore. Using your CPF Ordinary Account (CPF-OA) for T-Bills today guarantees a loss.
CPF-OA pays 2.5% per year, risk-free.
T-Bills are at 1.59%.
That’s a shortfall of 0.91% annually.
You’ll also temporarily lose access to CPF funds for housing payments, miss out on compounding, and pay bank fees. Unless yields climb back above 2.5%, CPF-OA is better left untouched.
3. What’s the deal with competitive vs non-competitive bidding?
The rules haven’t changed, but the impact feels different when yields are this low:
Competitive bids: You set your minimum acceptable yield, with the risk of rejection.
Non-competitive bids: You accept the final auction yield and are allocated up to 40% of the issue.
When returns are slim, the difference between the two approaches matters less—you’re essentially deciding whether you want control or certainty over what are now modest yields.
4. How do T-Bills compare to fixed deposits today?
This is where things get interesting. Fixed deposits have suddenly become the more attractive option.
6-month T-Bills: 1.59%
Best 6-month fixed deposits: Up to 2.15%
12-month fixed deposits: Up to 2.45%
Fixed deposits also come with SDIC protection (up to S$100,000 per depositor, per bank). While T-Bills are tax-free and backed by the Government, fixed deposits currently deliver better guaranteed returns with similar liquidity constraints.
5. Can my T-Bill application be rejected?
Yes, though rejections usually stem from application errors:
Invalid or missing CDP account details
Joint CDP accounts (not permitted)
No Direct Crediting Service activated
Breaching the S$1 million cap on non-competitive bids
That said, rejections may be the least of your worries. Recent auctions saw a bid-to-cover ratio of 2.39 times, meaning demand remains strong despite weak yields.
6. When might yields bounce back?
No one has a crystal ball, but near-term recovery looks unlikely.
The US Federal Reserve is signalling possible rate cuts, keeping Singapore yields suppressed.
The Monetary Authority of Singapore projects easing inflation and a steady economy, reducing pressure to push rates higher.
Global uncertainty has driven investors into safe assets, boosting demand and capping yields further.
Bottom line: Don’t count on T-Bill rates recovering quickly.
7. How do I check if my application went through?
The process hasn’t changed:
Cash applications: CDP notifications after 6 pm on issuance date
SRS applications: Statements from your SRS operator
CPF-OA/SA applications: CPFIS or CPF statements
Checking matters more now—not just to confirm allocation, but to calculate whether the returns are actually worth it.
8. Can I exit T-Bills before maturity?
Yes, but liquidity is limited. You can sell through the secondary market at DBS, OCBC, or UOB branches, but:
Trading volumes are thin.
Bid-ask spreads are wide.
Transaction costs eat into returns.
If flexibility is important, consider Singapore Savings Bonds (SSBs) instead. They allow monthly redemption without penalties and currently pay better long-term averages.
9. What alternatives should I look at?
Plenty of options now outshine T-Bills:
| Alternative | Returns | Key Benefits |
|---|---|---|
| SSBs | ~2.11% (10-year average) | Redeem anytime, flexible |
| Fixed deposits | 1.6–2.45% | Guaranteed, SDIC insured |
| High-yield savings accounts | Up to 8.05% (with conditions) | High liquidity |
| Money market funds | 1.8%+ | Professional management, daily access |
Top fixed deposit offers—like Citibank (1.8% for 3 months) and HSBC (1.6%)—outperform T-Bills today.
10. Can non-residents invest in T-Bills?
Yes, but the real question is: should they?
Non-residents can open a CDP account and apply through local banks, but they receive the same 1.59% yield. In many cases, USD fixed deposits or money market funds in their home markets offer better risk-adjusted returns.
11. How are T-Bills taxed?
This remains one of T-Bills’ strongest features:
Singaporeans and PRs: No tax on interest income.
Non-residents: Also exempt.
Secondary trades: No capital gains tax.
It’s a genuine advantage, though less impactful when the underlying returns are already low.
12. Should I invest now or wait it out?
This is the big question—and the answer depends on your priorities.
You might wait if:
You want higher returns (fixed deposits, SSBs, and high-yield accounts are superior today).
You don’t need ultra-safe liquidity right now.
You might invest if:
You prioritise government backing above all else.
You’re building a T-Bill “ladder” with staggered maturities.
You have idle cash sitting at 0% that you simply want working.
For most people, however, waiting makes more sense until T-Bill yields climb above 2.5%—the CPF-OA benchmark.
Conclusion
T-Bills are not “bad”—they’re just a poor fit for the current environment. The same government guarantee that made them irresistible at 3.7% does not justify accepting 1.59% today, especially when alternatives like fixed deposits and SSBs provide better value.
The smarter move in 2025 may be to redirect funds into higher-yield, equally safe products until conditions shift. T-Bills will become attractive again—but that time hasn’t arrived.
Before you apply, ask yourself:
👉 Am I choosing T-Bills because they’re the best option today—or because they were attractive yesterday?