In today’s volatile economic climate, finding safe, predictable, and low-risk investment instruments can be a challenge. Yet, amidst the dizzying array of financial products lies a simple, time-tested option that has gained renewed popularity among cautious investors: Treasury Bills, or T-Bills.
For the average Singaporean or resident investor in 2025, T-Bills have become more than just an obscure government-issued note—they now represent a cornerstone in conservative portfolio planning. This guide will walk you through the fundamentals of T-Bills in Singapore, explain why they’re gaining traction, and help you decide whether they’re a right fit for your financial goals.
What Are T-Bills?
Treasury Bills (T-Bills) are short-term debt securities issued by the Singapore Government and sold through the Monetary Authority of Singapore (MAS). When you buy a T-Bill, you are essentially lending money to the government for a fixed period—either 6 months or 1 year—in exchange for a guaranteed return.
Unlike bonds, which pay interest regularly (also known as coupon payments), T-Bills are issued at a discount and redeemed at their face (par) value upon maturity. The difference between the purchase price and the maturity amount represents the investor’s return.
Key Characteristics of Singapore T-Bills
| Feature | Description |
|---|---|
| Issuer | Government of Singapore |
| Tenure | 6 months or 1 year |
| Return Type | Non-coupon; issued at discount |
| Risk Level | Very low (backed by AAA-rated government) |
| Minimum Investment | S$1,000, in multiples of S$1,000 |
| Application Modes | Cash, SRS, or CPF Investment Scheme |
| Liquidity | Can be sold before maturity, but secondary market is thin |
Why Are T-Bills Popular in 2025?
With global interest rate trends experiencing fluctuations, Singapore T-Bills are once again in the spotlight. Here are several reasons why they’ve become especially attractive:
1. Rising Yields
Due to tightening monetary policies and inflationary pressures over the past two years, short-term yields have climbed significantly. In early 2025, 6-month T-Bills were yielding around 3.65% per annum, compared to barely 1% just a few years prior.
2. Safe Haven Asset
Amidst global market uncertainty, risk-averse investors are turning to government-backed securities. With Singapore’s rock-solid credit rating (AAA by S&P and Moody’s), T-Bills are seen as one of the safest places to park idle funds.
3. Better Than Savings Accounts
Many high-yield savings accounts, despite attractive promotional rates, require hoops like salary crediting or minimum monthly spends. T-Bills, on the other hand, offer competitive risk-free returns without such commitments.
How Do T-Bills Work?
Example:
- Let’s say you apply for a 6-month T-Bill with a yield of 3.60% p.a.
- Par Value (Face Value): S$10,000
- Discounted Purchase Price: ~S$9,823
- Maturity Amount: S$10,000
- Return Earned: S$177
At the end of 6 months, you will receive the full S$10,000, representing your principal and interest rolled into one.
How to Apply for T-Bills in Singapore
Step 1: Choose Your Mode of Application
You can apply for T-Bills using:
- Cash via DBS/POSB, OCBC, or UOB Internet Banking or ATMs
- SRS (Supplementary Retirement Scheme) via your SRS operator’s platform
- CPF Investment Scheme (CPFIS-OA) via selected bank branches
Note: CPFIS-OA can only be used for 6-month T-Bills, not 1-year.
Step 2: Select Non-Competitive or Competitive Bid
- Non-Competitive Bidding – You agree to accept the cut-off yield decided at auction. This is suitable for beginners.
- Competitive Bidding – You specify the minimum yield you’re willing to accept. If your bid is too high (i.e. demanding a higher yield than the market rate), it may be rejected.
Step 3: Wait for Allotment
T-Bills are issued every two weeks. Once your bid is successful, the amount is deducted from your account and your T-Bills will be credited into your CDP account (for cash applications) or respective scheme account (for CPF/SRS).
Interpreting the T-Bill Auction Results
Each T-Bill issuance is determined via an auction process. The final yield—also known as the cut-off yield—is announced after the auction closes. Factors influencing the cut-off yield include:
- Market demand
- Prevailing interest rates
- Overall liquidity
- Global macroeconomic sentiment
You can view past results and upcoming auctions on the MAS website.
Where Do T-Bills Fit In Your Portfolio?
T-Bills should be seen not as high-growth investments, but as capital preservation tools. They are especially useful for:
1. Short-Term Cash Parking
If you’re setting aside funds for a home down payment, tuition, or an upcoming travel expense, T-Bills allow your money to work harder than in a bank account.
2. Emergency Fund Parking
While liquidity is slightly constrained (you need to wait for maturity or sell in the thin secondary market), the guaranteed return makes T-Bills a potential component of a tiered emergency fund strategy.
3. Diversification
Even in a diversified investment portfolio, T-Bills offer counterbalance to more volatile instruments like equities or REITs. During market downturns, they help cushion losses.
Pros and Cons of Investing in T-Bills
✅ Pros
- Virtually risk-free (backed by SG government)
- Decent yields for short tenure
- No fees or charges
- Simple and transparent process
- Available for CPF and SRS usage
❌ Cons
- Limited tenure (max 1 year)
- No compounding of interest
- Funds are locked in until maturity unless sold
- Lower returns than equities or long-term bonds
- Competitive bids may result in failed applications
How Do T-Bills Compare to Alternatives?
| Instrument | Tenure | Return | Risk | Liquidity |
|---|---|---|---|---|
| T-Bills | 6 or 12 months | ~3.5% | Very low | Low |
| Fixed Deposits | 6–24 months | ~2.5%–3.2% | Low | Moderate |
| Singapore Savings Bonds (SSB) | Up to 10 years | Step-up to ~3.4% | Very low | High (monthly redemption) |
| CPF Ordinary Account | N/A | 2.5% guaranteed | Very low | Restricted |
| High-Yield Savings Account | N/A | Up to 4%* (conditional) | Very low | High |
*Often subject to salary crediting, minimum card spend, etc.
Common Misconceptions About T-Bills
“They’re only for retirees or ultra-conservative investors.”
Not true. In fact, many young adults in Singapore are using T-Bills for strategic cash parking, especially when market returns are uncertain.
“I can’t use CPF to buy T-Bills.”
You can—but only your CPF Ordinary Account (OA) and only for 6-month T-Bills. It’s a great way to optimise idle CPF funds, especially if the T-Bill yield exceeds CPF’s 2.5%.
“You need a large sum to get started.”
Wrong. The minimum investment is just S$1,000. And there are no brokerage fees or platform charges, making it accessible to retail investors.
Final Thoughts: Are T-Bills Right for You?
T-Bills are not the flashiest asset class. They won’t make you rich overnight, nor do they promise high-octane growth. But what they do offer is rare in today’s financial landscape: clarity, safety, and predictability.
Whether you’re a young working adult planning your wedding, a retiree safeguarding capital, or a CPF investor looking to optimise returns, T-Bills can play a meaningful role in your financial toolkit. With yields hovering above 3.5% in 2025, they are more than just a safe choice—they are a smart one.
