The times have changed. Not too long ago, everyone was queuing up for T-Bills when yields hit 3.7% in mid-2024. Fast forward to Aug 2025, and the latest 6-month T-Bill yields have plummeted to just 1.59%, which is below many fixed deposit rates.
Suddenly, the once-coveted government-backed investment isn’t looking so attractive. If you’ve been wondering whether T-Bills still make sense, you’re asking the right questions. Here are the 12 most pressing concerns that savvy Singaporeans are grappling with right now.
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1. Are T-Bills still worth it with such low yields?
The short answer? It depends on what you’re comparing them against and what you’re trying to achieve.
T-Bills remain one of Singapore’s safest investments, backed by the government’s AAA credit rating. But “safe” doesn’t always mean “smart” when yields are this low. At 1.59%, you’re barely keeping up with inflation, let alone growing your wealth.
T-Bill yields dropped from 3.7% to 1.59% in just 1 year—that’s a massive 57% decline that shows how unpredictable they can be. You’re facing serious opportunity cost since fixed deposits offer up to 2.45% for 12-month placements, and your real returns after inflation are practically negligible.
| Pros | Cons |
| Government-backed safety | Yields now below many fixed deposits |
| No lock-in period anxiety | Significant yield volatility |
| Tax-free returns | Opportunity cost vs other investments |
| Low minimum investment (S$1,000) | Returns barely beat inflation |
2. Should I still use my CPF-OA for T-Bills?
Here’s the uncomfortable truth: using CPF-OA for T-Bills now means you’re guaranteed to lose money.
Your CPF-OA earns a guaranteed 2.5% annually. With T-Bill yields at 1.59%, you’re essentially paying 0.91% for the privilege of lending money to the government. It makes absolutely no financial sense.
The CPF opportunity cost breakdown:
- CPF-OA guaranteed return: 2.5% p.a.
- Current T-Bill yield: 1.59% p.a.
- Your loss: 0.91% p.a.
Additional considerations:
- Your CPF-OA funds won’t be available for housing payments during the T-Bill tenure
- You’ll miss out on the additional interest that could compound over time
- Banks charge transaction fees of $2.50 per transaction plus quarterly service fees
Keep your CPF-OA earning its guaranteed 2.5% until T-Bill yields recover above this threshold.
3. What’s competitive and non-competitive bidding?
This hasn’t changed, but the stakes feel different when yields are low.
| Competitive Bidding | Non-Competitive Bidding |
| You specify your minimum acceptable yield | You accept whatever yield the auction determines |
| Risk: Your bid might be rejected if too high | Priority allocation up to 40% of total issuance |
| Better for experienced investors | Safer for beginners |
| More control over returns | Less control, but guaranteed allocation |
With yields so low, the difference between competitive and non-competitive bidding feels less meaningful anyway. You’re essentially fighting over scraps either way.
4. How do T-Bills compare to fixed deposits now?
This is where things get interesting. Fixed deposits have suddenly become the more attractive option for many investors.
Current rates comparison (Aug 2025):
- 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 have stepped up their game with higher guaranteed returns and deposit insurance coverage up to S$100,000. Plus, you know exactly what you’re getting—no auction uncertainty or nasty surprises. The liquidity constraints are pretty much the same as T-Bills anyway.
That said, T-Bills still hold their ground with full government backing, which technically trumps bank deposits. They’re also completely tax-free, and if you need to exit early, the secondary market won’t slap you with withdrawal penalties like some fixed deposits do.
5. Can I get rejected from T-Bills?
Yes, but rejection isn’t your biggest worry right now—it’s whether you should even apply.
Common rejection reasons:
- Invalid or incorrect CDP account number
- Using joint CDP accounts (only individual accounts accepted)
- CDP account without Direct Crediting Service activated
- Exceeding the S$1 million cap per auction for non-competitive bids
Here’s what’s more concerning: recent auctions have seen overwhelming demand with bid-to-cover ratios of 2.39x, which suggests many investors haven’t realised there are better alternatives out there.
6. When will T-Bill yields recover?
The honest answer: nobody knows for certain, but the outlook isn’t promising in the near term.
Multiple forces are working against T-Bill yields right now. Fed policy expectations around US rate cuts are keeping a lid on Singapore yields, whilst Singapore’s central bank projects easing inflation and economic strengthening—which reduces pressure for higher rates.
Meanwhile, global uncertainty has investors flocking to government bonds for safety, and the limited T-Bill supply isn’t helping yields find their footing either.
7. How do I check my application status?
The process remains the same, but you’ll want to verify you’re not losing money:
- Cash applications: Check your CDP notification statement after 6pm on issuance date
- SRS applications: Review statements from your SRS operator
- CPFIS-OA applications: Check CPFIS statement from agent bank
- CPFIS-SA applications: Review your CPF statement
Worth checking: use this time to calculate whether your actual returns justify the investment, especially if you’re considering CPF funds.
8. Can I sell T-Bills before maturity?
Yes, through the secondary market at DBS, OCBC, or UOB branches. But here’s the catch: trading volume is extremely low, making T-Bills relatively illiquid.
Here’s where things get tricky: prices fluctuate with interest rate movements, but finding buyers when you need them is another story entirely. Trading volume is painfully low, which means wider bid-ask spreads and higher transaction costs that can eat into your already modest returns.
For better liquidity, consider Singapore Savings Bonds with their monthly redemption options and no penalties.
9. Are there better alternatives right now?
Absolutely. The low T-Bill environment has made other options more attractive:
| Alternative | Returns | Key Features |
| Singapore Savings Bonds | 2.11% (10-year average) | Monthly redemption flexibility; higher returns than T-Bills across all time horizons |
| Fixed deposits | 1.6% to 1.8% (3-month) | Guaranteed returns; SDIC coverage up to S$100,000; predictable income |
| High-yield savings accounts | Up to 8.05% (with conditions) | Better liquidity than T-Bills; often higher base rates than current T-Bill yields |
| Money market funds | Typically 1.8%+ | Professional management; daily liquidity |
Fixed deposits are making a comeback. Top performers like Citibank (1.8% for 3 months), State Bank of India (1.75%), HSBC (1.6%), and BEA (1.6%) are now offering better rates than T-Bills with complete certainty about your returns. Unlike T-Bills, you know exactly what you’re getting upfront, and your deposits are protected under Singapore’s deposit insurance scheme.
10. What about non-residents?
Non-residents can still buy T-Bills, but the question is why they’d want to at current yields.
The process hasn’t changed: you’ll still need a Central Depository (CDP) account and can apply through the standard banking channels. You’ll get the same disappointing yields as everyone else, though.
Non-residents might want to look at USD fixed deposits or money market funds in their home currency instead—they often offer superior risk-adjusted returns right now.
11. How are T-Bills taxed?
The tax treatment remains favourable, which is about the only bright spot:
- Singapore citizens and residents: T-Bill returns are completely tax-exempt
- Non-residents: Also enjoy tax-free returns on T-Bills
- No capital gains tax on secondary market transactions
This tax advantage becomes more meaningful when yields eventually recover, but right now it’s hardly compensation for the low absolute returns.
12. Should I wait for better rates or invest now?
This is the million-dollar question that depends on your specific situation.
Reasons to wait:
Current yields are sitting near historical lows, whilst fixed deposits and other alternatives are offering genuinely better returns. The economic uncertainty we’re seeing suggests we’re in for more rate volatility ahead, and frankly, there’s no opportunity cost if you’re already earning higher returns elsewhere.
Reasons to invest now:
Maybe you need government-backed safety above all else, or you’re methodically building an investment ladder with regular maturities. Perhaps you’re taking a contrarian view that yields will go even lower, or you simply have truly idle cash earning 0% elsewhere.
The straightforward move? Start with alternatives like SSBs or high-yield savings accounts that actually make financial sense right now. Only consider T-Bills when yields recover above 2.5% (the CPF-OA threshold) or when you specifically need their particular liquidity profile.
Final words
T-Bills aren’t inherently bad investments—they’re just poorly suited to the current low-yield environment. The same government backing that made them attractive at 3.7% doesn’t automatically justify accepting 1.59% when better alternatives exist.
The smart way for short-term investing is now flowing toward fixed deposits, SSBs, and high-yield savings accounts that offer superior risk-adjusted returns. T-Bills will have their day again, but today isn’t that day.
Before you invest, ask yourself: Am I choosing T-Bills because they’re genuinely the best option, or simply because they were good 6 months ago?
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About the author
Caleb Leong is passionate about travelling the world and getting involved in cross-cultural works. Freelance digital marketing and content writing is a way for him to express himself creatively while earning his keep. He unwinds by diving into a variety of music genres. Living in a digitally disrupted world, he’d like to offer a different perspective on finances to show people the possibilities of what goes beyond a typical “Singaporean life”.
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