Fixed Deposit vs T-Bills vs Singapore Savings Bond 2026: Detailed Comparison

FD vs T-bills vs SSB: the short answer

For most Singaporeans with cash they do not need for 6 to 12 months, the order in May 2026 is: bank fixed deposit at promo rates (2.80 to 3.00 per cent), then 6-month T-bills (~2.65 per cent), then Singapore Savings Bond (~2.45 per cent average over 10 years).

But the headline rate is not the whole answer. T-bills are tradeable in the secondary market and government-backed. SSB is fully redeemable any month with no penalty. FDs lock you in and charge an early-withdrawal fee. Pick the instrument that matches your liquidity tolerance, not just the rate.

This guide assumes you have already filled your bonus savings account caps. If you have not, the bonus tiers on UOB One or OCBC 360 still pay more than any of these three. See the savings account pillar first.

Table of Contents

1. Side-by-side comparison (May 2026)

2. Bank fixed deposit (FD): how it works

3. Treasury bill (T-bill): how it works

4. Singapore Savings Bond (SSB): how it works

5. Year-by-year math: S$10,000 over 12 months

6. The decision tree by goal

7. The CPF-OA wedge

8. Honest gotchas

9. FAQ

1. Side-by-side comparison (May 2026)

2. Bank fixed deposit (FD): how it works

You give the bank a lump sum for a fixed tenure (3, 6, 12 or 24 months). The bank pays a guaranteed interest rate at maturity. Withdraw early and you forfeit the interest, sometimes plus a fee.

May 2026 promo rates from the big banks: DBS pays 2.80 per cent on 12 months, OCBC pays 2.90 per cent on 12 months (S$20,000 minimum), UOB pays 2.85 per cent on 9 months. Smaller banks (Maybank, RHB, Bank of China) often offer 2.90 to 3.10 per cent on similar tenures.

Pros

• Guaranteed return at maturity
• SDIC-insured up to S$100,000 per depositor per scheme
• Simple to set up: 5 minutes via internet banking

Cons

• Capital locked in: early withdrawal forfeits interest (and sometimes principal fees)
• Promo rates require minimum deposit (often S$20,000) and may exclude existing savings transferred from the same bank
• Rate is fixed, so you lose if rates rise during the lock-in

Best for

Cash you are certain you do not need for the lock-in period AND a balance large enough to hit the promo minimum (usually S$20,000 plus). For smaller amounts, T-bills typically beat FD after adjusting for the minimum.

3. Treasury bill (T-bill): how it works

A T-bill is short-term Singapore government debt. You buy it at auction (every two weeks for 6-month bills, every quarter for 12-month bills) at a discount to face value. At maturity, the government pays you the full face value. The difference is your yield.

May 2026 yields (most recent auctions): 6-month T-bill clearing at 2.62 per cent annualised, 12-month T-bill at 2.65 per cent. Yields move with each auction and reflect MAS monetary policy stance.

How to apply

• Cash (SGD): via DBS, OCBC, UOB internet banking or MAS Investor Portal. Auction cut-off is 9 pm one day before the auction.
• CPF-OA: via your bank CPFIS account. Bids count toward your CPF-OA investment limit. Capital locked until T-bill matures (CPF refunded after maturity).
• SRS: via your SRS bank, same channel as cash.

Pros

• Government-backed: effectively zero credit risk
• Low minimum (S$1,000)
• Tradeable in the secondary market (you can sell before maturity, though market price varies)
• Tax-free interest for individuals

Cons

• You buy at auction, so the yield you get depends on bid competition
• Capital is locked until maturity if you do not sell in the secondary market (secondary trading thin for retail-size lots)
• CPF-OA bidders: the 2.50 per cent CPF-OA interest is paused while the T-bill is held, so you only gain if the T-bill yield exceeds 2.50 per cent

4. Singapore Savings Bond (SSB): how it works

SSB is a 10-year Singapore government bond with a unique feature: you can redeem it any month with no penalty, getting back your principal plus accrued interest. Issued monthly with a new tranche every first business day.

The interest rate steps up over the 10 years. May 2026 issue example: year 1 pays ~2.10 per cent, ramping to ~2.80 per cent by year 10. Average yield over 10 years if held to maturity: ~2.45 per cent.

How to apply

• Cash (SGD): via DBS, OCBC, UOB internet banking or MAS Investor Portal during the application window (first to fourth week of each month).
• SRS: via your SRS bank during the same window.
• CPF: NOT eligible. SSB is cash and SRS only.

Pros

• Fully redeemable any month with no penalty (and accrued interest paid)
• Government-backed: zero credit risk
• Low minimum (S$500)
• Single bond can be held for any duration from 1 month to 10 years

Cons

• First-year yield (typically lowest in the curve) is below FD and T-bill, which penalises short holds
• Quarterly issuance can be undersubscribed if rates expectations rise (rare)
• Maximum holding limit S$200,000 per individual across all SSB tranches

Best for

Cash you might need but might not. SSB acts like a high-yield account with no conditions, except the first-year rate is lower than a 6-month T-bill or a bonus savings account. Hold 2+ years to start beating the alternatives.

5. Year-by-year math: S$10,000 over 12 months

The honest comparison. We hold S$10,000 in each instrument for exactly 12 months and add up the interest. May 2026 rate assumptions: FD 2.85 per cent, 6-month T-bill rolled twice at 2.62 per cent, 12-month T-bill 2.65 per cent, SSB held year 1 only at 2.10 per cent.

For 12-month holds with no withdrawal needs, FD wins on raw yield. But if you might need the cash mid-period, the order flips: SSB redeemable any month, T-bill tradeable in the secondary market, FD locked with penalty.

And the bonus savings account still beats all three for balances under S$75,000 if you can hit the conditions. Re-read the pillar before deciding.

6. The decision tree by goal

Goal 1: Park S$10,000 for 12 months, certain you do not need it

Bank FD promo wins. 2.80 to 2.90 per cent guaranteed, SDIC-insured, set up in 5 minutes.

Goal 2: Park S$10,000 for 6 months, might need it sooner

6-month T-bill if you can wait until the next auction (every two weeks); secondary market liquidity exists if you need to exit. SSB if you absolutely cannot predict when you need the cash (early redemption is free).

Goal 3: Park S$50,000+ in your CPF-OA, do not need it for 12 months

12-month T-bill via CPF-OA. The CPF-OA pays 2.50 per cent by default, so a T-bill yielding 2.65 per cent is only worth doing if the spread is positive after the application fee (S$2.50 per bid). Run the math first.

Goal 4: Park S$10,000, might need any month, do not want to chase auctions

SSB. Apply once, redeem any month, no penalty, no auction. The first-year yield is below T-bill, but the flexibility is worth it for genuinely uncertain cash needs.

Goal 5: Park S$30,000 for 24 months

Compare a 24-month FD (~3.00 per cent) against rolling 6-month T-bills for 2 years (~2.60 to 2.70 per cent if yields stay flat). FD wins on certainty, T-bill wins if you think rates will rise.

7. The CPF-OA wedge

CPF Ordinary Account pays 2.50 per cent by default. Using CPF-OA to buy T-bills (CPFIS-OA channel) lets you potentially earn more, but with three traps.

Trap 1: The 2.50 per cent pause

While CPF-OA money is in the T-bill, it stops earning the 2.50 per cent base. Your gain is the spread between T-bill yield and 2.50 per cent, NOT the full T-bill yield. May 2026 spread on a 6-month T-bill: 2.62% - 2.50% = 0.12 per cent annualised. On S$10,000 that is S$12 gross over 6 months. Subtract the application fee.

Trap 2: The first-of-month effect

CPF interest is calculated on the lowest balance each month. Withdrawing CPF-OA mid-month for a T-bill forfeits that month's interest entirely. Always submit bids near the end of the month if buying via CPF-OA.

Trap 3: The CPF-OA refund delay

When the T-bill matures, the proceeds go back to your CPF-OA, but the bank takes 1 to 3 business days to refund. Your cash is out of CPF interest accrual for that gap.

Verdict: CPF-OA T-bills make sense only when the T-bill yield is at least 50 basis points above 2.50 per cent. In May 2026 the spread is too thin. Wait for rates to widen before allocating CPF-OA to T-bills.

8. Honest gotchas

Gotcha 1: FD promo rates exclude existing balances

DBS, OCBC and UOB promo FD rates apply only to fresh funds. If you move S$50,000 from your DBS savings into a DBS 12-month FD, you may get only the standard FD rate (typically 1.50 to 2.00 per cent). Always check the fine print: 'fresh funds only' is the most common condition.

Gotcha 2: T-bill yields fluctuate

Each auction can clear at a different yield. May 2026 6-month clearing is 2.62 per cent, but it has ranged from 2.45 to 2.85 per cent over the past 6 months. Look at the most recent 3 auctions before assuming a future yield.

Gotcha 3: SSB minimums and limits

Minimum S$500. Maximum S$200,000 per individual across ALL outstanding SSB tranches. If you hit the limit, you must wait for older bonds to redeem before buying new ones.

Gotcha 4: SDIC versus government backing

FD is SDIC-insured up to S$100,000 per depositor per scheme. T-bill and SSB are direct Singapore government obligations (effectively zero risk, no S$100,000 cap). Above S$100,000 in a single bank's FD, the marginal funds are not SDIC-protected.

Gotcha 5: Currency

All three instruments above are SGD. SGD-denominated instruments avoid FX risk but you also miss USD-denominated yields (which are higher in May 2026 due to USD rates remaining elevated). USD T-bills via your broker may yield more but carry FX risk.

9. FAQ

Q1: Which has the highest yield in May 2026?

Bank FD promo at 2.80 to 3.00 per cent (12 months, smaller banks often top), then 12-month T-bill at ~2.65 per cent, then 6-month T-bill at ~2.62 per cent, then SSB year 1 at ~2.10 per cent. SSB only catches up after year 3 due to step-up structure.

Q2: Can I withdraw early from a T-bill or SSB?

T-bill: yes, by selling in the secondary market via your bank. Price depends on prevailing yields. SSB: yes, full redemption any month with no penalty. FD: technically yes, but you forfeit accrued interest and may pay a fee.

Q3: Is T-bill better than SSB?

For 6 to 12 months and you can commit, T-bill yields more. For uncertain holding periods, SSB is more flexible. For 5+ year holds, SSB's step-up makes it competitive.

Q4: Should I use CPF-OA for T-bills?

Only if the T-bill yield exceeds 3.00 per cent (giving a 50 bps spread over CPF-OA's 2.50 per cent). In May 2026 the spread is too thin (~12 bps). Skip for now.

Q5: Are returns taxable?

No, for individuals. Interest from FD, T-bill and SSB is not taxable in Singapore for individual investors.

Related guides

If you have not maxed out your bonus savings account yet, the Best Savings Account Singapore 2026 guide shows the tier-by-tier picks. Most balances under S$75,000 earn more in a bonus account than in any of the three instruments above.

If you are picking a credit card to hit your savings account spend trigger at the same time, see the Best Credit Cards Singapore 2026 decision guide.