Singapore T-bill Interest Rate

T-bills are short-term Singapore government bonds issued and guaranteed by the Singapore government. Singapore government issues 6-month T-bills every two weeks and 1-year T-bills every quarter. Here you will find the historical Singapore T-bill interest rate for 6-month and 1-year T-bills.

Singapore T-bill Historical Interest Rates

Here we summarize the Singapore T-bill auction results up to the latest auction.

6-Month Singapore T-bill Interest Rate

Here are the historical interest rates for 6-month T-bills:

1-Year Singapore T-bill Interest Rate

Here are the historical interest rates for 1-year T-bills:

What is Singapore T-bill?

Singapore T-bills are short-term government bonds issued and fully backed by the Singapore government, which has one of the highest credit ratings in the world. Investing in T-bills guarantees your principal and interest payout; therefore, T-bills are usually considered low-risk investments.

If you want to learn more about T-bills, you can read our comprehensive guide on Treasury Bills (T-bills) Singapore.

How Competitive is Singapore T-bill Interest Rate?

We can measure the current Singapore T-bill interest rate competitiveness in two ways:

Compared to Historical Rates

By looking at the historical interest rates chart or table above, we can see where we are compared to historical rates. As of this writing, the T-bill interest rate is at one of the highest levels in recent times.

In a normal economic environment, bonds with shorter-term maturity usually have lower interest rates than those with longer-term maturity. The higher rates for longer-term bonds are due to the risk premium associated with holding the bonds in the long term. There is opportunity cost and a higher probability of default when holding for longer.

In an uncertain economic environment, the shorter-term maturity yields higher than the longer-term maturity. This phenomenon is called an inverted yield curve. In this economic condition, the T-bill may become one of the most attractive fixed-income investments because of its relatively high-interest rate and low risk.

Compared to Alternatives

The closest alternative to T-bill is the fixed deposit. You can compare the latest T-bill rates above with the latest fixed deposit rates to check which offers better rates. However, please note that fixed deposits are only insured up to $75,000 per bank.

Another T-bill alternative is Singapore Savings Bonds (SSB) which allows redemption at any month. Investors can also use SSB as short-term instruments to park their cash. However, due to the step-up nature of the SSB interest rates offering, it is less likely for SSB to provide better rates for short-term holding.

Otherwise, investors may also consider high-yield savings accounts, which can offer competitive rates (but with a catch!). They usually require you to fulfill specific requirements such as crediting salary, spending on their credit card, etc. If you can fulfill those hoops, you may qualify for higher and more competitive interest rates.

Each alternative is unique, but T-bill is usually still one of the more attractive instruments for investors seeking capital preservation.

How is Singapore T-bill Interest Rate Determined?

Singapore T-bills interest rates are determined through an auction. You won’t know the interest rate (cut-off yield) until the auction ends.

T-bills adopt uniform price auctions. The highest successful competitive bids submitted in the auction will be the cut-off yield. Once this cut-off yield is determined:

• Non-competitive bids will get this yield as the interest rate. The allocation is pro-rated if the demand exceeds the limit.
• Competitive bids below this cut-off yield will receive full allocation with this cut-off yield as the interest rate.
• Competitive bids at this cut-off yield will be allocated pro-rated.
• Competitive bids higher than the cut-off yield will not get allocations.