Find out what are the frequently asked questions about buying and redeeming Treasury bills (T-bills) or learn more about the key product information for individuals.
How do T-bills work
Why are there no coupon payments for my T-bills?
There are no coupon payments for T-bills.
Instead, T-bills are issued at a discount to the face (par) value. Face/par value refers to S$100 in principal amount of the T-bills applied for. The discount rate of the T-bills is the cut-off yield at the auction. The interest is paid at maturity and is the difference between the purchase price and the face value.
Application of T-bills
What is the difference between non-competitive and competitive applications?
Non-competitive Application
- In anon-competitive application, you only specify the amount you want to invest and not the yield. You may wish to choose this option if you wish to invest in the bond regardless of the return or are unsure of what yield to bid.
- Do note that in an auction, non-competitive applications will be allotted first, up to 40% of the total issuance amount. If the amount of non-competitive applications exceeds 40%, the T-bills will be allotted to you on a pro-rated basis.
- You will get the T-bills at the cut-off yield, which is the highest accepted yield of successful competitive applications.
Note: Submitting multiple non-competitive applications does not increase the chance of successful allotment. Allotment takes into account the aggregate total amount applied by each investor, and not the number of applications submitted by each investor.
Competitive Application
- If you wish to invest in the T-bills only if it yields above a certain level, you can submit a competitive application.
- In the application, you can specify the minimum yield you are willing to accept in percentage terms, up to 2 decimal places. Please be mindful not to submit in price terms.
- Please notethat you may not get the full amount that you applied for, depending on how your application compares to the cut-off yield.
Note: A lower yield represents a more competitive application, as you are indicating that you will accept a lower interest rate. You can submit multiple competitive applications.
What is the maximum amount of T-bills that I can apply for as an individual investor?
The sum of the competitive and non-competitive applications that may be allotted to an individual is capped at 15% of the issuance size of the T-bills auction.
In addition, the non-competitive application per individual is capped at S$1 million per T-bills auction. Please note that final allotment could be less than S$1 million per T-bills auction, if the total amount of non-competitive applications exceeds 40%, which will result in the T-bills being allotted to non-competitive applications on a pro-rated basis.
How do I compute my initial investment amount for my T-bills based on the cut-off yield?
T-bills are issued at a discount to the face value.
The cut-off yield at an auction determines the cut-off price of the T-bills, based on the formula below:
D = M/365 X R
P = S$100 – D
Where:
D = full discount per S$100 face value
M = days to maturity
R = annual rate of discount (yield), expressed as %
P = dollar price per S$100 face value
For example, if the cut-off yield for a 6-month T-bills with 182 days to maturity is 4.00%, this translates to a cut-off price of S$98.005 (rounded to 3 decimal places) per S$100 in face value. This means that for every S$1,000 of T-bills that was allotted to you, your initial investment amount would be S$980.05.
When will the funds be debited from my account?
For cash applications, funds will be deducted at the point of application. The discount to the face value of your allotted T-bills will be credited into your account within 1 – 3 business days after auction date.
For SRS applications, funds will be earmarked at the point of application, for subsequent deduction within 1 – 3 business days after auction date.
For CPFIS applications, funds will be deducted within 1 – 3 business days after auction date.For more information on how to invest using CPFIS, you may visit CPF website .
Note: Please check with your bank on the relevant transaction charges (if applicable) for using the different funds for application.
Why was my application unsuccessful?
There are a few possible reasons why your application was unsuccessful. Some common reasons include:
- Joint CDP accounts cannot be used to buy T-bills. You will need to have an individual CDP Securities account as a holding account to deposit your allotted T-bills.
- Invalid or incorrect CDP account number entered during the application.
- The CDP account used does not have Direct Crediting Service activated.
In addition, please note that there is an allotment limit of S$1 million per individual per T-bills auction for non-competitive applications.
You may wish to check with your bank for the exact reason(s) why your application was rejected.
Allotment of T-bills
How are the T-bills allotted and how are the yields of the T-bills allotted to me determined?
T-bills are issued via a uniform-price auction.This means that all successful applications, whether non-competitive or competitive, will be allotted the T-bills at a uniform yield, which is the cut-off yield.The cut-off yield of the T-bills auction is the highest accepted yield of successful competitive applications submitted at the auction.
In a T-bills auction, allotment starts with the non-competitive applications, followed by the competitive applications:
- Non-competitive applications are allotted first,up to 40% of the total issuance amount. If the total amount of non-competitive applications exceeds 40%, the T-bills will be allotted to non-competitive applications on a pro-rated basis. However, to ensure that the final allotments are in denominations of S$1,000, adjustments will be made by the system on a randomised basis.
- The rest of the issuance amount will be awarded to competitive applications, starting from the lowest to the highest yields submitted.
Illustration
Here is a stylised example to illustrate the allotment process for T-bills, which assumes:
| Total Issuance Size of T-bills | S$20,000 |
| Total Non-competitive Applications Received | S$8,000 |
| Total Competitive ApplicationsReceived | S$18,000 |
For this example, the allotment will be as follows:
- The non-competitive applications will be allotted first.As the non-competitive applications of S$8,000 is within 40% of the issuance size (i.e. S$8,000), the non-competitive applications will be fully allotted. This means that everyone who submitted a non-competitive application will be allotted the amount that they had bid for, capped at S$1 million per T-bills auction.
- The competitive applications will be allotted next based on the remaining auction amount of S$12,000.The applications will be allotted starting with the lowest yield, and move to the next lowest yield and so on until the remaining auction amount of S$12,000 is reached.
| Competitive or Non-competitive | Application amount | Allotment amount | Cumulative allotment amount | Remarks |
| Non-competitive applications (A) | S$1,000 | S$1,000 (fully allotted) | S$1,000 | |
| Non-competitive applications (B) | S$3,000 | S$3,000 (fully allotted) | S$4,000 | |
| Non-competitive applications (C) | S$4,000 | S$4,000 (fully allotted) | S$8,000 | |
| Total of Non-competitive applications | S$8,000 | S$8,000 (100% of non-competitive applications allotted) | S$8,000 | In this example, the non-competitive applications were 100% allotted as the total amount of non-competitive applications was within 40% of the total issuance amount. |
| Competitive applications at 1% | S$3,000 | S$3,000 (fully allotted) | S$11,000 | All applications at this yield were fully allotted as it is below the cut-off yield. |
| Competitive applications at 2% | S$4,000 | S$4,000 (fully allotted) | S$15,000 | All applications at this yield were fully allotted as it is below the cut-off yield. |
| Competitive applications at 3% | S$4,000 | S$4,000 (fully allotted) | S$19,000 | All applications at this yield were fully allotted as it is below the cut-off yield. |
| Competitive applications at 4% | S$5,000 | S$1,000 (pro-rated allotment) | S$20,000 |
|
| Competitive applications at 5% | S$2,000 | - | - | Applications at this yield were not allotted as the total issuance size has been met. |
| Total of Competitive applications | S$18,000 | S$12,000 | S$20,000 | 4% becomes the cut-off yield for this auction. |
| In summary | ||||
| Total of both Non-competitive and Competitive applications | S$26,000 (Non-competitive S$8,000, Competitive S$18,000) | S$20,000 (Non-competitive S$8,000, Competitive S$12,000) | S$20,000 | Cut-off yield = 4%. |
In this example, the cut-off yield is 4%. All allotted applications, non-competitive and competitive, will receive the same cut-off yield of 4%.
How do I read the T-bills auction results?
In a uniform-price auction, successful non-competitive and competitive applications will be allotted the T-bills at the Cut-off Yield and Cut-off Price. TheCut-off Yieldrefers to the highest accepted yield of successful competitive applications, and theCut-off Pricerefers to the price corresponding to the Cut-off Yield.See question on "How do I compute my initial investment amount for my T-bills based on the cut-off yield?"forthe formula to compute the cut-off price.
If you have placed a non-competitive application, you may refer to the% of Non-Competitive Applications Allottedfor the percentage of allotment given to non-competitive applications for the auction. If you have placed a competitive application at the Cut-off Yield, you may refer to the% of Competitive Applications at Cut-off Allottedfor the percentage of allotment given to applicants who bid exactly at the cut-off yield for the auction.
Do note that in the event of over-subscription, individual allotments will be adjusted on a randomised basis to ensure that allotments are in denomination of S$1,000.
For more information on the competitive bidding behaviour in an auction, you may also refer to theMedian Yield and Average Yield. TheMedian Yieldrefers to the yield corresponding to the median of successful competitive applications, while theAverage Yieldrefers to the sum product of the amount of successful competitive applications and the respective application yields, divided by the total amount of successful competitive applications. The results for each T-bills issue may differ depending on investors’ bidding behaviour.
How and Where can I check my T-bills holdings?
For individual investors, if your application for the T-bills was successful, the T-bills holding will be reflected in your respective accounts after the issuance date.
- For cash applications: You can check your CDP notification statement viaCDP Internet after 6pm on issuance date. If you have opted for paper statements from CDP, the statements are typically mailed to investors from the4thbusiness day of each month. Please note that every 10 units on the CDP statement represents S$1,000 in face value of your T-bills holdings. For questions on your CDP account or CDP statement, please contact CDP at 6535 7511.
- For SRS applications: You can check the statements from your SRS Operator (DBS/POSB, OCBC and UOB are SRS operators).
- For CPFIS-OA applications: You can check the CPFIS statement sent by your agent bank (DBS/POSB, OCBC and UOB are CPFIS agent banks).
- For CPFIS-SA applications: You can check your CPF statement.
Why is the amount of refund I received different from what I had calculated based on the auction results?
This can happen if there is an over-subscription for non-competitive applications (i.e. the total amount of non-competitive applications exceeds 40% of the issuance size). In this situation, the allotment to non-competitive applications will be pro-rated, with individual allotments adjusted on a randomised basis such that allotments are in denomination of S$1,000.
This may also happen if you have made a competitive application at the cut-off yield.
Illustration
Suppose a T-bills auction receives a total of S$15,000 in non-competitive applications for a total issuance size of S$30,000.
As the non-competitive applications of S$15,000 exceeds 40% of the issuance size (i.e. S$12,000), the allotment to non-competitive applications will be pro-rated by approximately 80% (S$12,000/S$15,000). This means that everyone who submitted a non-competitive application will have their allotments pro-rated and adjusted on a randomised basis to ensure that allotments are in denomination of S$1,000.
| Competitive or Non-competitive | Application amount | Allotment amount | Cumulative allotment amount |
| Non-competitive application (A) | S$1,000 | S$0 (not allotted) | S$0 |
| Non-competitive application (B) | S$2,000 | S$1,000 (partially allotted) | S$1,000 |
| Non-competitive application (C) | S$3,000 | S$3,000 (fully allotted) | S$4,000 |
| Non-competitive application (D) | S$4,000 | S$4,000 (fully allotted) | S$8,000 |
| Non-competitive application (D) | S$5,000 | S$4,000 (partially allotted) | S$12,000 |
| Total of Non-competitive applications | S$15,000 | S$12,000 | Applications are pro-rated by approximately 80%, with individual allotments adjusted on randomised basis to ensure that allotments are in denominations of S$1,000. |
When my application is pro-rated, what would I expect to see in terms of deduction?
For cash applications:You will receive a combined refund on the (i) non-allotted amount, and (ii) discount on the face value of T-bills which you have been allotted.
Using a 6-month T-bills with a cut-off yield of 4.00% and cut-off price of S$98.005 (rounded to 3 decimal places) per S$100 in face value as an example. If you have submitted a non-competitive application of S$2,000, and was only allotted S$1,000, you will receive a combined refund of (i) S$1,000 of your non-allotted amount, and (ii) discount on the face value of T-bills, which would be S$19.95.
Note: The discount rate of the T-bills is the cut-off yield at the auction.
For CPFIS and SRS applications: Only the settlement amount (allotted amount net of the discount) will be deducted from your respective accounts.
Using the same example above, if you submitted a non-competitive application of S$2,000 and was only allotted S$1,000, only the settlement amount of S$980.05 will be deducted from your account.
Redemption of T-bills
Can I redeem T-bills before maturity?
No, you are not able to redeem your T-bills prior to maturity.
However, you can sell your T-bills in the secondary market through DBS, OCBC or UOB by visiting their branches. You should indicate whether you are using cash, SRS or CPFIS funds. Please note that prices in the secondary market may change day-to-day according to market conditions, and may be higher or lower than what you had paid for.
Maturity of T-bills
Upon maturity of the T-bills, when will I receive the principal amount?
On maturity, the principal amount will be credited to your respective account by the end of the day, typically after 6pm.
- For cash applications: The principal amount will be credited to your designated Direct Crediting Service bank account. If you cannot remember which bank account is linked to your CDP account, you can check using the CDP internet service or refer to the header section in your monthly CDP account statement to find out.
- For SRS applications: The principal amount will be credited to your SRS account.
- For CPFIS-OA applications: The principal amount will be credited to your CPF Investment Account.
- For CPFIS-SA applications: The principal amount will be credited to your CPF SA account.
Please note that should the maturity date fall on a day when MAS’ electronic payment system is not in operation, the transaction will take place on the next business day.
