When a Singapore T-bill auction closes, it produces one headline number, and people read it as a direct competitor to a fixed deposit rate. The 1.70% from the September 2026 six-month auction, for instance, was nearly identical to what several banks were offering on six-month deposits.
This follows S$10,000 through that actual auction, from the day it leaves an account to the day it comes back, and works out what it earned. It is arithmetic on published rates, not a recommendation, and the rates it uses will have moved by the time you read it. The method will not.
The auction being followed
The issue is BS26118E, taken from the Monetary Authority of Singapore's own published auction results.
| Auction | Thursday 10 September 2026 |
| Issue | Tuesday 15 September 2026 |
| Maturity | Tuesday 16 March 2027 |
| Tenor | 182 days |
| Cut-off | 1.70% |
| Price per S$100 | 99.152 |
Several secondary sites misidentify this auction as BS26117A. That is a different T-bill — the one auctioned on 27 August. The authority's own data is unambiguous that 10 September was BS26118E.
1.70% is not the rate you earn
The cut-off figure is a discount rate, and the authority prices T-bills from it with a specific formula:
price per S$100 = 100 − (days to maturity ÷ 365 × rate)
For this auction: 100 − (182 ÷ 365 × 1.70) = 99.1523, which the authority rounds to 99.152.
That formula matters because a different one circulates. Several online calculators price a T-bill as though the rate were a yield, dividing 100 by one plus the rate for the period. For this auction that gives 99.1595. Tested against every six- and twelve-month auction in the authority's recent results, the discount formula reproduced its published price five times out of five. The yield formula reproduced it none of the five times.
| Issue | Rate | Authority's price | Discount formula | Yield formula |
|---|---|---|---|---|
| BS26118E | 1.70% | 99.152 | 99.1523 ✓ | 99.1595 ✗ |
| BS26117A | 1.60% | 99.202 | 99.2022 ✓ | 99.2085 ✗ |
| BS26116V | 1.56% | 99.222 | 99.2221 ✓ | 99.2281 ✗ |
| BS26115N | 1.59% | 99.207 | 99.2072 ✓ | 99.2134 ✗ |
| BY26102T | 1.68% | 98.325 | 98.3246 ✓ | 98.3522 ✗ |
On S$10,000 of face value, the difference is only S$0.71. The common yield-based calculator is wrong, but not by enough to make a practical difference.
The discount has a more useful consequence for your return. You pay S$9,915.20 for a S$10,000 T-bill, which means your gain is S$84.80 on the money you actually paid. Expressed as a return on the S$9,915.20, over 182 days, that is 1.715% a year. A little more than the headline.
The days the money is out and earning nothing
That 1.715% return is calculated from the T-bill's issue date to its maturity. But your money is tied up for longer.
If you pay in cash, the bank takes the full S$10,000 when you apply, up to two business days before the auction. The S$84.80 discount is credited back one to three business days after. During these gaps, the money is out of your account but not yet earning interest.
Taking an application on 8 September and a refund on 12 September, both inside the windows the authority describes, and weighting each amount by the days it was actually out, the effective annual return falls to about 1.65%. Slightly below the headline, and below the 1.715% that ignores the gap.
The same S$10,000, paid from CPF
Using savings from a CPF Ordinary Account changes the arithmetic, because that money was already earning interest that you forgo.
The Ordinary Account paid 2.5% a year for October to December 2026, and 2.5% is also its legislated minimum. The CPF Board's own rules on monthly interest then do something that is easy to miss. Money deducted during a month will not earn interest from this month onwards. Money returned during a month starts earning next month.
For this auction the deduction falls around 11 to 14 September, so September's interest is lost in full. The T-bill matures on 16 March and the proceeds reach the CPF Investment Account within about a week; moved back to the Ordinary Account in March, they earn from April. Counting the months with no Ordinary Account interest, September through March, gives seven, not the six the T-bill runs for.
| S$ | |
|---|---|
| T-bill gain | +84.80 |
| Ordinary Account interest forgone (7 months at 2.5%) | −145.83 |
| Bank charges for the CPF investment account | −9.82 |
| Compared with leaving it in the Ordinary Account | −70.85 |
At these rates, the same S$10,000 is about S$71 better off having stayed where it was. That is not a quirk of timing. The Ordinary Account's legislated floor of 2.5% sits above what this T-bill yields, before the extra month and the fees are even counted.
And because 2.5% is a legal minimum, this comparison is as good as it gets for the T-bill; the forgone interest could be higher, but not lower. The Ordinary Account rate for January to March 2027 had not been announced when this was worked out, but it cannot be set lower than 2.5%, so the interest forgone can only be the figure above or more.
The bank charges are one bank's published schedule — S$2.73 to buy and again at maturity, and S$2.18 a quarter for holding. Other banks charge similar amounts, but those were not confirmed from the banks themselves.
Against a fixed deposit
Several institutions were offering six-month deposits near the T-bill's rate in September 2026, all read from their own sites on 21 September. Standard Chartered offered 1.70% for new money of at least S$25,000. CIMB offered 1.75%. Sing Investments & Finance, a finance company rather than a bank, offered 1.80% for S$10,000 or more of new money online.
A fixed deposit is usually simple interest calculated daily on a 365-day year and paid at maturity, which is the basis one of those institutions states in its terms. A deposit quoted at 1.70% pays exactly that on the sum deposited. The T-bill's 1.70% is a discount rate that works out to a slightly higher yield. The two rates look similar, but they aren't calculated the same way.
Most of these deposit rates are promotional and restricted to new money — funds not already held at the institution — and several have minimums well above S$10,000. Secondary comparison sites published figures for the same banks in the same week that differed from the banks' own pages, which is a reason to read the rate at the source.
What the arithmetic comes to
For a cash buyer, this T-bill's effective return was slightly higher than its headline rate, but only if you ignore the dead days before issue. For a CPF buyer, it was a net loss against leaving the money in the Ordinary Account.
None of that is a verdict on T-bills. Rates move every fortnight, and a T-bill yielding well above 2.5% would change the CPF comparison completely. Rates change, but the method for an accurate comparison doesn't. You still have to use the discount formula for the price, count all the days the money is out of your account, and apply the CPF Board's rules for monthly interest.
Sources
The auction dates, cut-off and prices are from the Monetary Authority of Singapore's published auction results. The pricing formula and the refund timings are from its T-bill guidance for individuals. The Ordinary Account rate, its legislated minimum and the monthly interest rules are from the CPF Board's own pages. The bank charges are from DBS's published schedule for CPF investment accounts. Deposit rates were read from each institution's own page on 21 September 2026. Both pricing formulas were tested here against the authority's published prices.
Not confirmed: the exact time each bank closed applications for this auction, which none of the pages consulted states; and the investment-account charges at banks other than DBS.
