{"id":23552,"date":"2025-06-11T17:21:06","date_gmt":"2025-06-11T09:21:06","guid":{"rendered":"https:\/\/www.syfe.com\/magazine\/?p=23552"},"modified":"2025-08-12T10:57:35","modified_gmt":"2025-08-12T02:57:35","slug":"t-bills-rate-falls-where-else-to-invest-money","status":"publish","type":"post","link":"https:\/\/www.syfe.com\/magazine\/t-bills-rate-falls-where-else-to-invest-money\/","title":{"rendered":"6-Month T-Bills Rate Falls to 2.05%. Where Else Can You Invest Your Money?"},"content":{"rendered":"\n

Find out what\u2019s behind the drop, where rates are headed, and smarter ways to earn higher income.<\/h3>\n\n\n\n
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The 5 June 2025 T-bill auction closed with a cut-off yield of just 2.05%<\/strong>. That is not only a step down from the 2.20% achieved two weeks earlier, but also the lowest level recorded so far in 2025<\/strong> and the sixth straight auction where yields have declined.<\/p>\n\n\n\n

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Source: MAS, as of 5 June 2025<\/em><\/p>\n\n\n\n

What\u2019s Driving the Slide in T-Bill Rates?<\/h2>\n\n\n\n

1. Persistent SGD Liquidity<\/strong>
<\/strong>The domestic banking system remains flush with Singapore-dollar deposits, keeping short-term funding costs subdued. The demand for high-rated papers like Singapore Government Securities (SGS) bonds is strong, compressing yields in spite of global macro uncertainty.<\/p>\n\n\n\n

2. Global Policy Expectations<\/strong>
<\/strong>Even though the US Federal Reserve has held its policy rate steady all year, markets are pricing eventual cuts. Analysts expect the Fed to keep rates unchanged in June but are ready to ease later in 2025 if US data weakens. Anticipation of easing US policy is capping SGD yields, given the close link between Singapore and US money-market curves.<\/p>\n\n\n\n

3. Portfolio Rebalancing Into Safe Assets<\/strong>
<\/strong>After a volatile first half for equities and credit, institutional investors have rotated toward shorter-duration, high-quality instruments. The increased demand for SGD fixed-income products is spilling over onto MAS bills, lowering cut-off yields even as the supply of government securities gradually rises.<\/p>\n\n\n\n

4. Supply Dynamics<\/strong>
<\/strong>Even though the government can now issue more bonds, supply is being rolled out gradually. With each 6-month T-bill auction still capped around S$7.5 billion, yields remain low\u2014not necessarily because demand is surging, but due to limited supply. Yield-seeking investors might thus look for alternatives to T-bills.<\/p>\n\n\n\n

Outlook: Will Yields Rebound or Stay Low?<\/h2>\n\n\n\n

The outlook hinges on two-way risks:<\/p>\n\n\n\n