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T-Bills vs Singapore Savings Bonds: Returns and Cash Access

Choose by the date you may need the money. A T-bill suits money you can hold to its stated maturity; selling earlier exposes you to the market price. Singapore Savings Bonds (SSBs) offer monthly redemption at face value, but the money does not arrive immediately. Both are Singapore Government securities; their access arrangements differ.

Product comparison · Worked cash flows · Access timing · Before applying

The differences that affect a cash plan

OCBC’s product and funding comparison, DBS T-bill application guidance, MAS on selling T-bills early and MAS on SSB redemption. SSB holdings are subject to an individual S$200,000 limit; a submitted redemption and a new application still require attention to the cash available before the proceeds arrive. MAS limit and reinvestment timing.

Worked example: follow the money, not only the percentage

T-bill: S$10,000 face value for 182 days

Assume a hypothetical auction cut-off yield of 3.00%. MAS calculates the price per S$100 as 100 − (days ÷ 365 × yield in percent). Here that is 100 − (182 ÷ 365 × 3) = S$98.504 when rounded to three decimal places. MAS price formula.

For a cash application, the bank can debit the face amount first and refund the discount after allotment. That refund is part of the same S$149.60 gain: do not add it again to the maturity payment. The maturity payment is S$10,000, not S$10,149.60. DBS cash-application timeline and MAS discount and maturity explanation.

SSB: S$10,000 held for six complete months

Assume an illustrative first-year coupon rate of 2.80% p.a. Six months’ interest is S$140. Subtract an S$2 application fee and one S$2 redemption-request fee: the net interest benefit is S$136, before any other applicable costs. The principal is returned at face value. Application fee and MAS redemption fee.

Use the actual issue’s redemption calculation if exiting between coupon dates. Count interest already received and accrued interest returned at redemption once each. These two examples demonstrate cash flows; the different purchase outlays, exact holding dates and assumed rates do not establish a current winner.

Monthly redemption still leaves a timing gap

MAS says an SSB redemption request made during the valid monthly window pays out by the second business day of the following month. The window closes on the fourth-last business day of the month. Missing that cut-off can push access into the next cycle. MAS redemption calendar.

For example, an unexpected bill due tomorrow cannot be funded by a redemption request submitted today. Keep enough immediately available cash for that gap. A known future payment needs a maturity/redemption date and settlement allowance, not merely an instrument labelled low risk.

A T-bill has no early redemption route, but it is not impossible to exit. MAS says you can sell through DBS, OCBC or UOB branches in the secondary market. The price may be above or below your purchase price; obtain the quote, charges and settlement timing before relying on a sale. Holding to maturity and selling early are different outcomes.

Compare like-for-like holding periods

• Do not compare six months with ten years. Use the SSB return at your planned exit and the T-bill’s actual days to maturity.
• Allow for reinvestment. A second T-bill six months later may have a different yield. Today’s auction does not lock in a full year across two purchases.
• Include access costs. SSB transaction fees matter more on small amounts. T-bill sale costs and prices matter if you cannot hold to maturity.
• Separate account access. Maturing or redeeming an investment inside SRS does not remove SRS withdrawal restrictions.

There is no rule that T-bills always yield more. Rates can differ by issue and term. Neither a higher quoted yield nor government backing makes the money available on the day your household needs it.

Before you apply

1. Record the issue code, application deadline, issue date and maturity or redemption date.
2. For a T-bill, choose a competitive bid only with a considered minimum acceptable yield; a non-competitive application accepts the auction cut-off yield. Full allotment is not assured.
3. Check funding, bank charges and the account receiving proceeds. Cash applications require the relevant CDP/direct-credit setup; SRS/CPF routes have their own requirements.
4. Check the actual allotment. Do not budget as though every dollar applied for is already invested.
5. Keep the immediate reserve separate and put the next cash date in your calendar.

MAS competitive and non-competitive applications and MAS uniform-price auction and allotment rules.

Continue with the SSB guide, where to keep emergency money, SSBs versus fixed deposits, T-bills versus fixed deposits, and cash-management products versus T-bills. If using retirement money, review SRS and CPF restrictions separately.