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SINGAPORE \u2013 The returns that retail investors are getting for Treasury Bills (T-bills), a type of short-term Singapore government securities, are climbing after dipping to around 1.3% to 1.4% in 2025 and the first half of 2026.<\/p>\n
With yields now hovering near 1.9%, fixed-income experts believe there is more upside in the coming months.\u00a0<\/p>\n
Another form of Singapore government securities, the Singapore Savings Bonds (SSBs), will pay the highest rates so far in 2026 for its November issue. If investors hold the SSBs for the full duration of 10 years, they will earn an average return of 2.45% a year.<\/p>\n
T-bills are short-term securities with maturities of either six months or a year. Investors buy the bills at a discount upfront and receive the full face value at maturity, earning the difference as interest.<\/p>\n
In contrast, SSBs are longer-term instruments that can be held for up to 10 years, though investors have the flexibility to exit their investment in any given month without penalty.<\/p>\n
Both T-bills and SSBs are deemed risk-free investments backed by Singapore\u2019s triple-A credit rating.\u00a0<\/p>\n
The appeal of T-bills grew in 2022 as yields climbed steadily from sub-1% levels. The six-month T-bill subsequently hit a peak of 4.4% on Dec 8, 2022, and the one-year T-bill went as high as 3.87% on Jan 26, 2023.<\/p>\n
Drawn by their safe nature and rising yields, investors from all walks of life piled in.<\/p>\n
Senior lab technician Dallas Goh was one of them. He accumulated as much as $100,000 in T-bills at one point.<\/p>\n
Interest in these short-term government securities waned in 2024 as equity markets became more attractive.\u00a0Investors \u2013 including Goh, who stopped buying T-bills in the middle of 2024 \u2013 looked elsewhere for higher returns.\u00a0<\/p>\n
However, the yields on T-bills are climbing again. The interest rate on the one-year T-bill rose to its 2026 high of 1.92% on Oct 15, from 1.68% on July 23. There will be no more one-year T-bill auctions in 2026.\u00a0<\/p>\n
Meanwhile, the cut-off yield for the six-month T-bill dipped slightly to 1.9% on Oct 8, remaining just shy of its Sept 24 peak of 1.92%.<\/p>\n
There are five more six-month auctions on Oct 22, Nov 4, Nov 19, Dec 3 and Dec 17.<\/p>\n
Goh shared that the yields are \u201cstill too low\u201d and he will wait until they cross 2.5% before he considers investing in T-bills again.<\/p>\n
His wish may just come true. Market-watchers anticipate higher yields in the upcoming auctions as the US Federal Reserve is expected to raise interest rates at least once by December 2026 and a total of twice within the next six months.\u00a0<\/p>\n
Eugene Leow, head of fixed income research at DBS Bank, said: \u201cAs long as Fed hike bets are in play, we would reasonably expect six-month T-bill rates to continue climbing.\u201d<\/p>\n
He noted that the interest rates on a six-month T-bill reflect where investors expect the Fed to move rates over the next half a year.<\/p>\n
\u201cWe think the six-month and one-year T-Bill rates would still grind higher in the coming months as Fed hikes get delivered,\u201d he added.<\/p>\n
Wesley Hoon, research analyst with the global fixed-income team at digital wealth platform FSM Global, noted that the Monetary Authority of Singapore manages the economy through the exchange rate rather than by setting interest rates. As a result, Singapore\u2019s short-term rates largely take their cue from US interest rates.\u00a0<\/p>\n
To illustrate his point, Hoon noted that following the Federal Reserve\u2019s rate hike on Sept 16, the cut-off yield for the six-month T-bill auction on Sept 24 climbed from 1.7% to 1.92%.<\/p>\n
\u201cIf the Fed pauses in October and hikes in December, as markets expect, that adds upward pressure into year-end, though some of it is already reflected in today\u2019s yields,\u201d he said.<\/p>\n
Hoon expects the six-month yields to keep climbing over the remaining auctions in 2026.\u00a0<\/p>\n
FSM Global is also positive on the one-year T-bills. However, since there are no more one-year bills in 2026, investors must wait until January 2027 to participate.<\/p>\n
To avoid sitting on idle cash, Hoon suggested they may want to consider building a T-bill ladder with staggered maturity dates by spreading their cash across multiple upcoming auctions.<\/p>\n
Because six-month bills are auctioned every two weeks, investors can allocate a portion into each of the next few issues, making January 2027\u2019s one-year T-bill just another rung in their ladder rather than the final destination, he added.\u00a0<\/p>\n
\u201cWith a ladder, you don\u2019t have to call the peak to earn a decent yield,\u201d Hoon said.\u00a0\u201cPart of your money matures every couple of weeks. If yields keep rising, you reinvest at higher rates; if they ease, you\u2019ve already locked some in.\u201d<\/p>\n