The cut-off yield is the lowest yield accepted at a Singapore Treasury bill (T-bill) auction, determined by MAS based on total demand, and every successful bidder receives this same rate regardless of the yield they originally bid, as long as their bid was at or below the cut-off.
Not financial advice. All figures for educational reference only. Data as at July 2026.
Last updated: July 2026.
Key Takeaways
- Singapore T-bill auctions use a uniform-price format, meaning every successful bidder receives the same cut-off yield, not the individual yield they bid.
- The cut-off yield is set by aggregating all bids from lowest to highest yield until the total issuance size is fully allocated.
- Competitive bidders who bid a yield above the eventual cut-off risk being partially or fully rejected, while non-competitive bidders are guaranteed allotment (subject to a cap) at the cut-off yield.
- At the 16 July 2026 auction, the 6-month T-bill cut-off yield came in at 1.55% p.a., continuing a gradual downward trend from prior months as MAS-referenced short-term rates eased.
- The cut-off yield, not the average yield, is what determines actual investor returns, so headlines quoting “average yield” can differ slightly from what most retail investors actually receive.
What Is the Cut-Off Yield?
Singapore T-bills are short-term Singapore Government Securities, typically issued with 6-month or 1-year tenors, sold at a discount to face value and redeemed at par with no coupon payments. At each auction, investors submit bids specifying either a yield they are willing to accept (competitive bids, mainly institutional) or simply agree to accept whatever rate is set (non-competitive bids, the default route for most retail CPF and cash investors via ATMs, internet banking or brokerages).
MAS ranks all competitive bids from the lowest requested yield to the highest, and allocates the available issuance amount starting from the lowest yield upward. The yield at which the total issuance is fully subscribed becomes the cut-off yield — every successful bidder, competitive or non-competitive, receives this exact rate.
How Does the Cut-Off Yield Work in Singapore Auctions?
Because this is a uniform-price auction, a competitive bidder who requested a yield below the cut-off still only receives the cut-off yield, not their lower requested rate — so there is no advantage to bidding unnecessarily low. Conversely, a competitive bidder who requested a yield above the cut-off is not allocated any T-bills at all, since demand at rates that low was already satisfied by other bidders. Non-competitive bids are automatically filled at the cut-off yield, up to an individual cap per auction, which is why most retail investors use the non-competitive route.
| Bid Type | How Rate Is Set | Risk of Rejection |
|---|---|---|
| Non-competitive | Automatically receives cut-off yield | Low, subject to per-investor cap |
| Competitive, bid at/below cut-off | Receives cut-off yield | Allocated in full or in part |
| Competitive, bid above cut-off | Not applicable, not allocated | High, full or partial rejection |
Source: MAS Singapore Government Securities auction mechanics, 6-month T-bill auction results as at 16 July 2026.
Cut-Off Yield Example
At the 16 July 2026 6-month T-bill auction, MAS set the cut-off yield at 1.55% p.a. An investor who submitted a non-competitive bid for S$10,000 automatically receives that 1.55% p.a. yield on their full allocation. A separate investor who placed a competitive bid requesting a yield of 1.80% p.a., hoping for a better rate, would have been rejected entirely, since 1.80% sits above the 1.55% cut-off — demand at yields of 1.55% and below had already absorbed the full issuance.
Advantages of Understanding the Cut-Off Yield
- Sets realistic expectations. Knowing that everyone receives the same cut-off yield removes any incentive to “outsmart” the auction with an aggressive competitive bid.
- Explains rejection risk. Understanding the mechanism clarifies exactly why some competitive bids fail, rather than it appearing arbitrary.
- Useful for rate-trend tracking. Tracking cut-off yields auction over auction gives a live read on short-term Singapore interest rate direction, useful alongside SORA and fixed deposit rate comparisons.
- Supports non-competitive bidding confidence. Most retail investors can simply use the non-competitive route and rely on the cut-off yield being applied automatically.
Risks and Limitations
- Yield is not known until after the auction. Investors cannot lock in a specific rate in advance; the cut-off yield is only revealed once bidding closes.
- Competitive bidding carries rejection risk. A bid set even slightly above the eventual cut-off yield can be rejected outright.
- Cut-off yield moves with market conditions. Strong demand from investors seeking safety can push the cut-off yield lower, reducing returns compared to previous auctions.
- Non-competitive bids are capped. There is a maximum allocation for non-competitive bids per auction, which can occasionally limit how much a single investor can apply for through that route.
Cut-Off Yield vs Average Yield
| Term | What It Measures | Relevance to Investors |
|---|---|---|
| Cut-off yield | Lowest accepted yield, applied to all successful bidders | The actual rate almost all retail investors receive |
| Average yield | Weighted average yield across all successful competitive bids | Useful as a demand indicator, but not the rate retail investors actually get |
The Bottom Line
The cut-off yield, not the average yield or any individually requested rate, is what determines what almost every Singapore T-bill investor actually earns. For most retail investors using the non-competitive route, understanding the cut-off yield mechanism mainly matters for interpreting auction results, since their own return is set automatically at that rate.
Frequently Asked Questions
What is the cut-off yield in a Singapore T-bill auction?
The cut-off yield is the lowest yield accepted at a T-bill auction, determined by MAS once the total issuance size is fully allocated across all bids from lowest to highest yield, and it is the rate every successful bidder receives.
Do all successful T-bill bidders get the same rate?
Yes. Singapore T-bill auctions use a uniform-price format, so every successful bidder, whether competitive or non-competitive, receives the same cut-off yield.
Can my T-bill bid be rejected?
A competitive bid can be rejected in full or in part if the yield requested is above the eventual cut-off yield; non-competitive bids are generally filled automatically, subject to a per-investor cap.
What was the 6-month T-bill cut-off yield at the 16 July 2026 auction?
The 6-month T-bill cut-off yield at the 16 July 2026 auction was 1.55% per annum, based on the auction results published by MAS.
Should I use a competitive or non-competitive bid for T-bills?
Most retail investors use non-competitive bids, since they are automatically filled at the cut-off yield without the risk of rejection that comes with guessing a competitive rate.