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310523 Treasury Bills (T-Bills) Singapore Jun 2023 guide_ Latest T-Bills Interest Rate & How To Buy T-Bills in Singapore

Treasury Bills (T-Bills) Singapore Jun 2023 Guide: Latest T-Bills Interest Rate & How To Buy T-Bills in Singapore

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Not so keen on parking your cash for 10 years in the Singapore Savings Bond (SSB) or Singapore Government Securities (SGS) bonds for the full tenor?

Or are you looking for an alternative to fixed deposits?

Enter T-bills (Treasury bills) with short maturities of only six months or one year and the same backing of the Singapore Government, well-known for its high credit (AAA) rating.

You’ll also receive a fixed interest payment upfront, and you can invest with cash, Supplementary Retirement Scheme (SRS), or Central Provident Fund (CPF) funds with no overall limit.

Curious to find out more? Click to jump to the relevant sections about Singapore T-Bills:

Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any investment product. Note that the information is accurate as of 31 May 2023.


TL;DR: Treasury Bills Singapore / T-bill Singapore — T-bills Singapore Rate and More

The interest rate for T-bills changes every month and is only determined at the auction. So here’s a look at the past interest rates:

Next 6-Month T-bill (8 Jun 2023 Auction): Singapore T-bill Interest Rate

BS23111W 6-Month T-bill (Open)
Issue Code BS23111W
ISIN Code SGXZ38592606
Tenor 6 months
Amount Offered $5.2 billion
Amount Allotted Total: TBC
Non-competitive: TBC
% of Competitive Applications at Cut-off Allotted TBC
% of Non-Competitive Applications Allotted TBC
Interest Rate (Cut Off Yield) TBC
(Benchmark yield as of 30 May 2023: 3.82%% p.a.)
Announcement Date 31 May 2023
Auction Date 8 Jun 2023
Issue Date 13 Jun 2023
Maturity Date 12 Dec 2023
Application Period Opens: 31 May 2023

Closing Date: Typically 1 – 2 business days before the auction date
(Do check with your bank for the exact closing date)

Investment Amounts Minimum of $1,000 (in multiples of $1,000)

Source: MAS

Next 1-Year T-bill (27 Jul 2023 Auction): Singapore T-bill Interest Rate

BY23102N 1-Year T-bill (Upcoming)
Issue Code BY23102N
ISIN Code SGXZ94049863
Tenor 1 year
Amount Offered TBC
Amount Allotted Total: TBC
Non-competitive: TBC
% of Competitive Applications at Cut-off Allotted TBC
% of Non-Competitive Applications Allotted TBC
Interest Rate (Cut-off Yield) TBC
(Benchmark yield as of 30 May 2023: 3.61% p.a.)
Announcement Date 20 Jul 2023
Auction Date 27 Jul 2023
Issue Date 24 Oct 2023
Maturity Date 22 Oct 2024
Application Period Opens: 20 Jul 2023
Closing Date: Typically 1 – 2 business days before the auction date
(Check with your bank for the exact closing date)
Investment Amounts Minimum of $1,000 (in multiples of $1,000)

Source: MAS

What Is the Rate for T-bill Singapore? 25 May 2023 6-Month T-bill Auction Results

The 25 May 2023 6-month T-bill (BS23110X) had a cut-off yield of 3.85% p.a., which is higher than the 3.83% yield recorded in the 11 May T-bill (BS23109E).

100% of non-competitive applications were allotted.

Individual investors can submit bids for SGS through selected banks’ ATMs and Internet banking portals. Applications through these channels may close one to two business days before the auction, and individual investors should check with their banks on the exact cut-off time.

Singapore Treasury Bills Yield: 20 Apr 2023 1-Year T-bill Auction Results

The 20 Apr 2023 1-Year T-bill (BY23101W) had a cut-off yield of 3.58% p.a. This is lower than the 26 Jan 2023 1-Year T-Bill (BY23100X), which had a cut-off yield of 3.87% p.a.

Meanwhile, there will also be an upcoming 1-year T-bill (BY23102N) which will be announced on 20 July 2023, with auctions available on 27 July.

Dates: Where the issue/settlement date, coupon payment or redemption date, or closing date of the application specified above falls on a day that the electronic payment system, established by the Monetary Authority of Singapore, is not in operation, issuance/settlement, coupon payment, redemption, or the close of application, as the case may be, will be effected on the next business day when the electronic payment system is in operation.


What is T-bill in Singapore? How Do T-bills Work in Singapore?

Treasury bills (T-bills) are government bonds that pay a fixed interest rate and have six-month or one-year maturities, with the 6-month T-bill being the most common.

Unlike SGS bonds, however, you are not paid with coupons. Instead, you buy T-bills at a discount to the face (par) value and are given the full value at maturity.

Do T-bills Pay Monthly?

In other words, if I were to buy a 6-month T-bill worth $10,000 with a yield of 3% p.a., I would only need to pay $9,850 upfront. Thus they do not pay monthly.

At the end of the tenor, I will receive the full $10,000 worth (back into my bank, CPF, or SRS account) and would have earned $150.

Interest Rates Are Only Revealed at the Auction

The big caveat is that you will only know the actual interest rates after announcing the auction results. Unlike SSBs, where MAS will tell us the exact interest rate we will get, T-Bills are auctioned, and the yields are determined then.

Historical T-bill Benchmark Yields

Luckily, we can roughly estimate the rates by looking at historical data from the MAS website!

So here’s the latest data as of the time of writing:

Source: MAS

Benchmark yield as of 6-Month T-bill as of 30 May 2023: 3.82% p.a.

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Are T-bills a Good Investment?

Before we dive into how to buy T-bills, let’s take a closer look at what investing in them means for us and how it differs from SSBs and SGS bonds.

Why Does The Government Offer T-bills?

According to MAS, the Government issues SGS bonds and T-bills primarily to:

  • Build a liquid SGS market to provide a robust government yield curve, which serves as a benchmark for the corporate debt market
  • Grow an active secondary market for cash transactions and derivatives to enable efficient risk management
  • Encourage issuers and investors, both domestic and international, to participate in the Singapore bond market.

If you didn’t understand any of that, T-bills essentially serve as a way for you to lend the Singapore government money so that they can develop the local debt markets.

How Do I Withdraw Money From T-bills?

Investors are not able to redeem T-bills early. However, you may choose to sell your T-bill on the secondary market at DBS, OCBC, or UOB’s main branches.

That said, the price of the T-bill may rise or fall before maturity, and the trading volume for T-bills is low, making them relatively illiquid. So be sure you are okay with locking up your money for the duration of the tenor!

Are T-bills Risk-Free?

T-bills are wholly backed by the Singapore Government, which has a “AAA” credit rating.

This reduces the risks of investing in T-bills to the bare minimum (read: there’re still risks tho).

Singapore is one of only 11 countries that enjoy the “AAA” credit rating by Standard and Poor (S&P), as in the folks behind the S&P 500 index! Some other countries include Switzerland, Australia, and Finland.

Source: Monetary Authority of Singapore

Such a strong rating arguably makes the T-bills one of the safest products in the market.

The only way you will lose all your money is if the Singapore Government defaults, which has never happened!

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T-bills vs SSB vs SGS Bonds – What Are The Differences?

 Singapore Savings Bonds
(SSB)
Singapore Government Securities (SGS) BondsTreasury Bills (T-Bills)
What is it?Safe and flexible bond option for investorsTradable government debt securitiesShort-term tradable government debt securities
How does it work?Pays interest every 6 monthsPays a fixed couple every 6 monthsInvestors buy it at a discount. Upon maturity, investors will then receive the full face value of the bill
Investment duration10 years2, 5, 10, 15, 20, 30, 50 years6 months or 1 year
Minimum investment$500, and in multiples of $500$1,000, and in multiples of $1,000$1,000, and in multiples of $1,000
Maximum limit per investor$200,000Auction: up to allotment limit for auctions

Syndication: None
No Limit; up to the allotment limit for auctions
FeesCash: $2Cash: $2 (Waived if you apply through DBS internet banking)Cash: $2 (Waived if you apply through DBS internet banking)

CPFIS: $2.50 transaction fee, $2 quarterly service fee per counter
Type of Interest PaymentFixed coupon, steps up each yearFixed couponNo coupon; issued and traded at a discount to the face (par) value
Payment of interestEvery 6 months, starting from the month of issueEvery 6 months, starting from the month of issueAt maturity
How is the price and rate determined?The interest rate is fixed and published by Monetary Authority of Singapore (MAS) every month

The interest rate is announced before the application
Determined by auctionDetermined by auction
How to apply?Apply through DBS/POSB, OCBC and UOB ATMs or internet bankingApply through DBS/POSB, OCBC and UOB ATMs or internet bankingApply through DBS/POSB, OCBC and UOB ATMs or internet banking
How to redeem?Redeem the full principal with accrued interest through Online Bank or ATM

There will be no penalty for early withdrawal
No early redemptionNo early redemption
Can we buy/sell on secondary markets?NoAt DBS, OCBC or UOB main branches; on SGX through brokersAt DBS, OCBC or UOB main branches
Transferable?NoYesYes
Can we invest using our SRS account?Investors can invest through their respective SRS Operator's internet banking portalInvestors can invest through their respective SRS Operator's internet banking portalInvestors can invest through their respective SRS Operator's internet banking portal
Can we invest using our CPF/SRS?CPF: No
SRS: Yes
Auction: Yes
Syndication: No
Yes
TaxThere is no capital gains tax in Singapore

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How To Buy Treasury Bills in Singapore?

Here’s how you go about applying for T-bills in Singapore.

How to Buy Singapore Government Bonds (T-bills). What Do You Need?

Before applying, make sure you have the following:

  • A bank account with any local banks in Singapore (DBS/POSB, OCBC, or UOB)
  • Central Depository (CDP) account that is linked to the bank account you intend to invest with
  • A CPF Investment Account with one of the three CPFIS agent banks (DBS/POSB, OCBC, and UOB) for CPFIS-OA investments (no account needed for CPFIS-SA investments).
  • An SRS account if you are using funds from your SRS.

How to Buy (New) T-bills at Auction? What Is the Best Way To Invest in T-bills?

Cash

You can apply for a T-bill through two methods:

  1. Apply at an ATM (only DBS/POSB, OCBC, or UOB) near you, OR
  2. Apply through Internet Banking under Singapore Government Securities.

Note that t $2 transaction fee (excluding GST) is waived if you apply through DBS.

SRS

Apply through the internet banking portal of your SRS Operator (DBS/POSB, OCBC, or UOB)

CPFIS: Can I Use My CPF To Buy T-bills?

Submit an application in person at the main branch of your respective CPF Investment Scheme (CPFIS) agent bank (DBS/POSB, OCBC, or UOB).

For DBS and OCBC customers, you may also apply for T-bills using your CPF-OA funds online via i-banking under “Singapore Government Securities”. (UOB customers will be able to do so soon from 22 April 2023).

Do note that agent banks charge a one-time fee of $2.50 (excluding GST) per transaction and a quarterly $2 service fee (excluding GST) per counter. A T-bill investment using your CPF Ordinary Account will incur a total cost of $6.50 or $7.02 after the prevailing GST of 8%.

Read More

How to Apply for T-bill Singapore (Old)

Dealer Banks (Secondary Market)

Aside from bidding at a T-bill auction, you can also buy T-bills with primary dealer banks (DBS/POSB, OCBC, or UOB). This allows you to buy older T-bills for an even higher return!

What Is Competitive and Non-competitive Bidding?

As you apply for new T-bills, you will have the option of a “non-competitive” and “competitive” bid.

T-bills Non-competitive Bid

A non-competitive bid does not specify the yield. Instead, you only specify the amount you want to invest, and those funds will be invested regardless of the yield. This is the option that the average Singaporean should go for.

Non-competitive bids will be allotted first, up to 40% of the total issuance amount. If the amount of non-competitive bids exceeds 40%, the bond will be allocated to you on a pro-rated basis.

This is the option that I recommend for most people, as you won’t need to deal with placing competitive bids.

T-bills Competitive Bid

On the other hand, a competitive bid is usually for institutional investors or the more investment-savvy, where investors will bid for their desired yield.

Opting for a competitive bid means that your funds will only be invested should the cut-off yield go above your specified yield.

Do note that you may not get the full amount that you applied for, depending on how your bid compares to the cut-off yield :

  • If your bid is lower than the cut-off yield, you will get an allotment of what you bid
  • If your bid is equal to the cut-off yield, your allocation amount might be lower as the allocation is pro-rata
  • If you bid above the cut-off yield, you will not be allocated.

The balance (60%) of the total issue amount will then be awarded to competitive bids from the lowest to highest yields.

In essence, everyone will get the cut-off yield so long as your (competitive) bid does not exceed the cut-off yield!

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How to Sell T-bills

Since you cannot redeem T-bills early, you may consider selling your T-bills through dealer banks (DBS/POSB, OCBC, or UOB).

But remember, the bond price may rise or fall before maturity, so you could lose some capital if you were to sell at a value below par value.

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How To Check T-bill (Singapore)

Once you’ve applied for T-bills, the waiting game begins!

You will be issued T-bills three days (T+3) after the auction.

You may view your purchases or sales of T-bills at the respective platforms based on your purchase method.

How To Check T-bill in CDP Account

Your successful T-Bills allotment paid for in cash will be reflected in your CDP statement (NOT SGX!):

If you have purchased $6,000 worth of T-bills, for example, you will be allocated a quantity of 60 units, with each unit worth $100.

So don’t panic if you’ve put in $10,000 and only see a quantity of 100!

T-bills Application for CPF and SRS

SRS application: Statements from your SRS Operator (DBS/POSB, OCBC and UOB are SRS operators).

CPF-OA application: CPFIS statement sent by your agent bank (DBS/POSB, OCBC and UOB are CPFIS agent banks).

CPF-SA application: CPF statement.

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FAQ

I Made a $10,000 Non-Competitive Bid With Cash and Received a Refund of $5,075 in My Bank Account. What’s Going On?

In this scenario, only $5,000 worth of T-bills was successfully applied, with the additional $75 being the interest earned.

This means that the cut-off yield for this round is at 3% per annum. If you’ve only received a partial allocation, this means that the T-bill you applied for was oversubscribed.

I’ve received the T-bill refund, but my CDP account does not reflect my T-bill holdings.

As T-bills are currently oversubscribed, it may take some time for MAS to process the information, resulting in a delay on your CDP account.

No need to worry and be patient for the holdings to appear.

Can I Submit Multiple Bids?

Yes, you can! Additional bids will not overwrite your previous submission.

If I submit a competitive bid, will I get the cut-off yield or the bid I submitted if the cut-off yield is higher?

You will get the cut-off yield if you’ve submitted a bid lower than the cut-off yield.

Will T-bill interest rates increase in the future? How Much Interest Do T-bills Pay?

T-bills have recently become popular, resulting in high demand and oversubscription. On top of that, some people have spoiled the market by submitting very low competitive bids to get fully allotted while enjoying a higher interest rate.

As a result, the T-bill interest rates have been fluctuating recently.

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Are T-bills Right For Me? T-bill Interest Rates Singapore

If you are an investor who wants to invest for a short period (i.e. 6 months or one year), T-bills are a great and safe way to park your spare cash.

How Is T Bill Interest Calculated? Does the Interest Compare to Bank Rates?

With the previous T-bill giving 3.78% p.a., T-bill interest rates are slightly higher compared to fixed deposits and savings accounts offered by banks:

That said, the interest rates are only determined at the auction, and if there is another oversubscription, you can expect interest rates to fall further and only a partial allocation.

For those of us who want to invest for the long term (i.e. five to 10 years), consider investing in SSBs or SGS bonds instead!

Do note that with the headline inflation rate predicted to be 4.5% to 5.5% in 2023 by the MAS, you’re still facing a tough battle.

Should You Invest in T-Bills Now?

Given that the Fed is expected to continue increasing interest rates through 2023, T-bills are also likely to rise further.

So if you have a sum of money and can afford to wait it out, you can choose to invest later to secure higher interest.

Alternatively, you can also build a bond ladder and dollar-cost-average into T-bills with each issuance.

To help you make a better decision, check out the T-bills’ benchmark yields here.

Upcoming Singapore T-bill Auctions

If the current T-bill doesn’t look attractive to you, here are the next T-Bill auctions for 2023!

6-Month T-Bill Calendar 2023

Announcement Date Auction Date Issue Date Maturity Date Tenor Issue Code ISIN Code Status
11 Jan 2023 18 Jan 2023 25 Jan 2023 25 Jul 2023 6-month BS23101S SGXZ70079470
Closed
26 Jan 2023 02 Feb 2023 07 Feb 2023 08 Aug 2023 6-month BS23102H SGXZ29241676
Closed
09 Feb 2023 16 Feb 2023 21 Feb 2023 22 Aug 2023 6-month BS23103T SGXZ17686775
Closed
23 Feb 2023 02 Mar 2023 07 Mar 2023 05 Sep 2023 6-month BS23104X SGXZ59560854
Closed
09 Mar 2023 16 Mar 2023 21 Mar 2023 19 Sep 2023 6-month BS23105W SGXZ98140148 Closed
23 Mar 2023 30 Mar 2023 04 Apr 2023 03 Oct 2023 6-month BS23106N SGXZ31942782 Closed
05 Apr 2023 13 Apr 2023 18 Apr 2023 17 Oct 2023 6-month BS23107V SGXZ38306411
Closed
19 Apr 2023 26 Apr 2023 02 May 2023 31 Oct 2023 6-month BS23108A SGXZ84803105 Closed

04 May 2023 11 May 2023 16 May 2023 14 Nov 2023 6-month BS23109E SGXZ74045766 Closed
18 May 2023 25 May 2023 30 May 2023 28 Nov 2023 6-month BS23110X SGXZ89109110
Closed
31 May 2023 08 Jun 2023 13 Jun 2023 12 Dec 2023 6-month BS23111W SGXZ38592606
Open
15 Jun 2023 22 Jun 2023 27 Jun 2023 26 Dec 2023 6-month BS23112N SGXZ18316448
Upcoming
28 Jun 2023 06 Jul 2023 11 Jul 2023 09 Jan 2024 6-month BS23113V SGXZ14619167
Upcoming
13 Jul 2023 20 Jul 2023 25 Jul 2023 23 Jan 2024 6-month BS23114A SGXZ42332148
Upcoming
27 Jul 2023 03 Aug 2023 08 Aug 2023 06 Feb 2024 6-month BS23115E SGXZ68145226
Upcoming
10 Aug 2023 17 Aug 2023 22 Aug 2023 20 Feb 2024 6-month BS23116F SGXZ84200740
Upcoming
24 Aug 2023 31 Aug 2023 05 Sep 2023 05 Mar 2024 6-month BS23117Z SGXZ87559985
Upcoming
07 Sep 2023 14 Sep 2023 19 Sep 2023 19 Mar 2024 6-month BS23118S SGXZ22996011
Upcoming
21 Sep 2023 28 Sep 2023 03 Oct 2023 02 Apr 2024 6-month BS23119H SGXZ95449054
Upcoming
05 Oct 2023 12 Oct 2023 17 Oct 2023 16 Apr 2024 6-month BS23120A SGXZ17695602
Upcoming
19 Oct 2023 26 Oct 2023 31 Oct 2023 30 Apr 2024 6-month BS23121E SGXZ35614007
Upcoming
01 Nov 2023 08 Nov 2023 14 Nov 2023 14 May 2024 6-month BS23122F SGXZ66087859
Upcoming
16 Nov 2023 23 Nov 2023 28 Nov 2023 28 May 2024 6-month BS23123Z SGXZ41634486
Upcoming
30 Nov 2023 07 Dec 2023 12 Dec 2023 11 Jun 2024 6-month BS23124S SGXZ85619765
Upcoming
13 Dec 2023 20 Dec 2023 26 Dec 2023 25 Jun 2024 6-month BS23125H SGXZ97252035
Upcoming

1-Year T-Bill Calendar 2023

Announcement Date Auction Date Issue Date Maturity Date Tenor Issue Code ISIN Code Status
17 Jan 2023 26 Jan 2023 31 Jan 2023 30 Jan 2024 1-year BY23100X SGXZ77770303
Closed
13 Apr 2023 20 Apr 2023 25 Apr 2023 23 Apr 2024 1-year BY23101W SGXZ19172121
Closed
20 Jul 2023 27 Jul 2023 01 Aug 2023 30 Jul 2024 1-year BY23102N SGXZ94049863
Upcoming
12 Oct 2023 19 Oct 2023 24 Oct 2023 22 Oct 2024 1-year BY23103V SGXZ50774546
Upcoming

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About Justin Oh
Your average Zillennial who is obsessed with anime, games, movies and of course, personal finance. Join me as I break down personal finance into easily digestible and fun bits!
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