Singapore T-Bills 2025: Check Upcoming Auctions, Investment Process

For Singaporean investors looking for low-risk government assets, Treasury bills, or Singapore T-bills, are a popular option. These short-term debt instruments, which are issued by the Singaporean government, offer a dependable and safe means of making short-term investments. The government’s excellent credit rating adds to their security, making them one of the most reliable investment choices.

Individual investors can benefit from steady returns and portfolio diversification by using T-bills. Their short-term structure is ideal for people who want to make additional investments without taking on long-term responsibilities. Investors may make strategic choices that support their financial strategies by knowing how T-bills work.

Singapore T-Bills 2025

Short-term investments in Singapore T-Bills are available at a discount to face value, with investors getting their whole investment back when it matures. T-bills, which come in six-month and one-year tenors, give investors flexible alternatives to fit their budgets. The Singapore Government, which has a AAA sovereign credit rating, completely backs Singapore T-bills, highlighting the security of these assets. They do not offer periodic interest (coupons) and are valued in Singapore Dollars (SGD). Rather, they are issued at a discount, and the difference between the purchase price and the face value at maturity represents the investor’s return. A T-bill having a face value of S$10,000, for instance, may be bought by an investor for S$9,800. The investor would then get the entire S$10,000 at maturity, with the S$200 difference serving as interest.

Singapore T Bill Investment Process

The Monetary Authority of Singapore (MAS) holds auctions where investors can buy T-bills. Auctions are usually publicized on the SGS website five business days before the issuance date and take place three business days before that date. People can apply online or through ATMs operated by DBS/POSB, OCBC, and UOB. Investments can be made in multiples of S$1,000, with S$1,000 being the minimum amount. Although there are restrictions for each auction, there is no upper limit on how much a person may own. The maximum amount for non-competitive bids at each auction is S$1 million.

The Complete Guide to Singapore Treasury Bills (T-Bills)

Since T-bills are distributed through a uniform-price auction, the cut-off yield—the yield at which all successful applicants get T-bills—is the same. Bids from investors may be competitive or non-competitive. Up to 40% of the entire issue amount is given to non-competitive bids first. The allocations are prorated if the total number of non-competitive applications surpasses this limit. Then, until the remaining issue amount is reached, competitive bids are distributed beginning with the lowest yield.

Singapore does not impose a capital gains tax. Interest income received by individual investors on Singapore Government Securities, such as T-bills, is free from taxes. Furthermore, interest income from these instruments is exempt from taxation for non-residents who do not have a permanent presence in Singapore.

Benefits of Investing in T-Bills Singapore

  • T-bills provide private investors with many benefits:
    • Safety: T-bills have a low default risk because the Singaporean government fully supports them.
    • Liquidity: T-bills offer rapid access to money when they mature due to their short tenors of six months or a year.
    • Predictable Returns: Since the return represents the difference between the face value at maturity and the reduced purchase price, it is known at the time of purchase.
    • Portfolio Diversification: Because of their low volatility, T-bills can lower overall risk when included in an investment portfolio.
  • Despite the minimal risk of T-bills, investors should take into account the following:
    • Poorer Returns: Compared to alternative investment vehicles like stocks or corporate bonds, T-bills’ safety frequently translates into poorer returns.
    • Inflation Risk: Over time, the actual value of the investment may decrease if the yield on T-bills is less than the rate of inflation.
    • Opportunity Cost: Because T-bill investments are fixed until maturity, investors may lose out on higher-yielding options elsewhere.

Singapore T Bills Auctions

A 6-month Treasury note (T-bill), with the number BS25102Z, is available for auction, according to the Monetary Authority of Singapore (MAS). The issuance date is February 4, 2025, the maturity date is August 5, 2025, and the auction is slated for January 28, 2025. Similar to the last T-bill auction, a total of S$7.2 billion is being offered for this issue.

Interested investors should be aware that applications normally conclude at 9 PM on January 27, 2025. However, depending on the bank, the application date may be sooner for individuals submitting through their Central Provident Fund (CPF) Ordinary Account. Verifying the precise cut-off times with the relevant financial institutions is advised.

According to recent patterns, the 6-month Singapore T-Bills cut-off yield at the most recent auction, held on January 16, 2025, was 2.99%. As of January 24, 2025, the benchmark yield for the 6-month Singapore Government Securities (SGS) has stayed steady at 2.99%. Investors can use these numbers to get a sense of possible yields for the next auction.

The possible loss of further CPF interest as a result of the T-bill’s duration should be taken into account by CPF investors. The dates of issuance and maturity indicate that CPF money will be distributed to the T-bill over an 8-month period, which might have an impact on the accrual of CPF interest. Investors should determine if the yield on the T-bill offsets this possible loss.

How to Monitor T-Bill Investments?

  • For cash applications: use CDP Internet to view your Central Depository (CDP) notification statement after 6 p.m. on the day of issuance.
  • For SRS Applications: Examine the statements provided by your SRS operator (DBS/POSB, OCBC, or UOB) for SRS applications.
  • For CPFIS-OA Applications: Refer to the CPFIS statement that your agent bank provided you for CPFIS-OA applications.
  • For CPFIS-SA Applications:  Check your CPF statement for CPFIS-SA applications.

You may reach CDP at 6535 7511 if you have any issues with your CDP account or statements.

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