The cut-off yield for T-bill 19 Sep 2023 (BS23118S) rebounded to 3.73%. Yay! This is a positive relief for investors as we have witnessed several consecutive auctions with decreasing yields. Let’s dive deeper into the auction result.
Auction Summary
Here is the summary of the auction:
Allotment
Total Amount Allotted | S$5.5 billion |
Amount Allotted to Non-Competitive Applications | S$1.6 billion |
Amount Allotted to MAS | S$0.0 million |
Total Amount Applied | S$11.2 billion |
% of Competitive Applications at Cut-off Allotted | Approximately 55% |
% of Non-Competitive Applications Allotted | 100% |
Bid-to-Cover Ratio | 2.03 |
Yield and Price
Cut-off Yield | 3.73% p.a. |
Cut-off Price | 98.14 |
Median Yield | 3.58% p.a. |
Median Price | 98.215 |
Average Yield | 3.05% p.a. |
Average Price | 98.479 |
Yield Finally Rebounded
After weeks of consecutive decline, we finally saw the rebound in the 6-month T-bill cut-off yield. After reaching its peak late last year, the yield continued to decline, reaching 3.70% in the previous auction. This T-bill 19 Sep 2023 (BS23118S) auction breathes a sigh of relief as the yield finally rebounded slightly to 3.73%.

The chart shows that the yield has stabilized around this level since the second quarter of this year. Let’s see if this level persists for the upcoming auctions. The good news is that the yield of 3.73% is comfortably higher than the highest fixed deposit rates offered in Singapore.
Stable Demand
The demand for the T-bill 19 Sep 2023 (BS23118S) was unchanged from the previous auction at $11.2 billion. This number is on the low side if we compare it to the last several auctions. The total non-competitive bids also stayed the same at $1.6 billion.
With the total amount offered in this auction being on the lower side at $5.5 billion, it is a relief that the cut-off yield ended up slightly higher. Because almost everything is the same between this and the past auctions, the slightly higher yield may be attributed to the marginally higher bids submitted by the market participants.
Non-Competitive Bids Stayed Muted
This is another good news from this auction. The total amount of non-competitive bids was only $1.6 billion, significantly below the 40% threshold of $2.2 billion. As a result, all non-competitive bidders got their full allocation in this auction. Yay!
We have been monitoring this non-competitive vs. competitive bids amount and noticed that in the past several auctions, we no longer see the non-competitive bids threshold being hit. Going forward, we will keep monitoring this non-competitive bid amount to see whether this trend persists. After seeing that the limit was not met again in this auction, we are now more confident in submitting non-competitive bids in the upcoming auctions.
What Are T-Bill Alternatives?
Investors investing in T-bill are probably drawn to it because of its almost risk-free profile and relatively competitive rates. The downside is that your capital is locked for 6-month and there is no way to break it early without risking losing your money. Are there other alternatives to T-bill? Here are some options we use ourselves:
Fixed Deposits
This one is a no-brainer alternative. Fixed deposits have very similar characteristics to T-bills. Unfortunately, fixed deposits in Singapore have seen a decline in rates for several months. Even the highest fixed deposit offering only offers up to 3.45%. Our local banks, OCBC and UOB, offer even lower rates of only 2.70%. Euwww… Against fixed deposits, T-bill is the clear winner here.
High-Yield Savings Accounts
High-yield savings accounts offer very competitive rates for those who can fulfill their criteria. The requirement is quite tricky for most people, so the realistic interest rate is usually much lower. These high-yield savings accounts may be a good option if you can meet most of the requirements. One thing to note is that the interest rate is floating. If the benchmark interest rate begins to fall, the interest rate offered by high-yield savings accounts is also likely to drop immediately. This contrasts with the T-bill, which locks the interest rate until maturity.
Cash Management Accounts
The cash management accounts are rather tricky because there is a fundamental difference in terms of risk profile. You can earn more than what T-bill offers, but the major downside is that your principal is not guaranteed. Yes, you may lose money investing in those cash management accounts. Do your research on the underlying funds of those cash management accounts to ensure you understand where your money is going. Similarly, the interest rate is floating, and should the benchmark interest rate reverse, the rates offered by these accounts will likely drop as well.
What Would We Do?
We like T-bills to invest our fixed-income investment portion. After comparing the various alternatives, it does seem like the T-bill is still one of the better options for investors seeking fixed-income investments. We use a combination of T-bill, high-yield savings, and cash management accounts for parking our short-term cash.
What do you think? Are you interested in applying for the next T-bill? To get started, read our coverage on T-bills Singapore and how to buy T-bills.
If you plan to use CPF for the upcoming T-bill auction, you may use our CPF T-bill calculator to estimate how much more you can earn by investing your CPF-OA into the T-bill.