Endowment Plan vs T-Bills Singapore 2026: Which Gives Better Guaranteed Returns?

The 6-month T-bill’s yield has risen for three straight auctions, hitting 1.59% p.a. on 30 July. The average Singapore endowment plan still guarantees more, at 1.81% p.a. But one of these rates is locked in for years — the other resets every few months.

The 6-month Singapore T-bill (BS26115N) cleared at 1.59% p.a. in its 30 July 2026 auction, its third consecutive rise. The average guaranteed rate across the 13 Singapore endowment plans we’ve reviewed is about 1.81% p.a. Endowment plans guarantee slightly more on paper, but that rate locks in today for years, while a T-bill’s rate resets at every new auction — so the “better” choice depends heavily on your time horizon.

Not financial advice. All figures are for educational reference only. Data verified as at 31 July 2026 against MAS auction results, cpf.gov.sg, and each insurer’s own product pages.

This is the fourth and final leg of our guaranteed-return comparison series — see how endowment plans stack up against CPF and Singapore Savings Bonds in our other comparisons.

Table of Contents

What T-Bills Actually Guarantee You

Singapore Treasury bills (T-bills) are short-term debt securities issued by the Singapore Government and auctioned by the Monetary Authority of Singapore (MAS). You buy them at a discount to their face value, then receive the full face value at maturity — the difference is your return, expressed as an annualised “cut-off yield”.

Two tenors are auctioned regularly: 6-month T-bills (roughly every two weeks) and 1-year T-bills (a handful of times a year). Because both are backed by the Singapore Government — one of the few sovereigns in the world still rated AAA — the yield is as close to risk-free as retail investors can get in Singapore Dollar terms.

Here’s what’s actually happened recently. The 6-month T-bill (BS26115N) cleared at 1.59% p.a. in its 30 July 2026 auction — its highest level since the start of the year, and the third consecutive rise, up from 1.55% on 16 July (BS26114W) and 1.50% on 2 July (BS26113X). The 1-year T-bill (BY26102T), auctioned 28 July 2026, cleared slightly higher at 1.68% p.a., reflecting a small premium for the longer tenor.

Crucially, that yield only applies for the tenor you bought — six months or a year. Once your T-bill matures, you get your principal plus interest back, and you’d need to bid again at whatever the next auction’s cut-off yield happens to be. There’s no compounding built in, and no guarantee the next auction lands anywhere near today’s rate. You can check the latest cut-off yields directly via MAS’s own T-bill information page.

What Singapore Endowment Plans Actually Guarantee

Endowment plans market themselves on “guaranteed returns,” but the actual guaranteed component — as opposed to non-guaranteed bonuses illustrated at 3.00% or 4.25% p.a. scenarios — is usually smaller than most buyers expect, and it’s fixed for the entire policy term the day you sign up.

We’ve individually reviewed and fact-checked 13 endowment plans from Singapore’s major insurers against their own official product pages. Of these, 7 publish a clean, comparable guaranteed percentage rate: AIA (2.80%), OCBC (~2.80%, campaign rate), Prudential (1.70%), Etiqa (1.65%), FWD (1.60%), Manulife (1.44%), and Great Eastern (0.70%). Averaging these 7 published rates gives ~1.81% p.a. — our own calculation, not a figure published by any single insurer.

Unlike a T-bill, this rate doesn’t reset. Whatever guaranteed rate is written into your policy contract at the point of purchase is locked in for the plan’s full term — commonly 2 to 30 years — regardless of where T-bill auctions, CPF rates, or bank fixed deposits move in the meantime. For the full insurer-by-insurer breakdown, see our complete endowment plan comparison guide.

Endowment Plan vs T-Bill: Side-by-Side Comparison

Sources: MAS auction results (BS26113X, BS26114W, BS26115N, BY26102T, Jul 2026); endowment figures from TKN’s own fact-checked insurer reviews, linked throughout this article.

The Reinvestment Risk T-Bills Have (And Endowment Plans Don’t)

This is the part most comparisons skip. A T-bill’s headline yield only tells you what you’ll earn until it matures — it says nothing about what happens after that.

If you hold a 6-month T-bill today at 1.59%, you’ll get your money back with interest in six months. At that point, you have to decide what to do next: bid for a new T-bill at whatever the next auction’s cut-off yield turns out to be, which could be higher or lower. This is called reinvestment risk, and it’s the trade-off for a T-bill’s short lock-in period.

Right now, that risk is working in savers’ favour — yields have risen for three consecutive auctions. But rates move both ways. In 2024-2025, several 6-month auctions cleared meaningfully lower than mid-2026 levels, and there’s no way to know today whether the next auction in mid-August continues rising, flattens, or reverses.

An endowment plan removes this risk entirely for its guaranteed component. Whatever rate is written into your policy on day one is the rate for the plan’s full term, whether that’s 5 years or 25. You give up the flexibility to exit every six months, but in exchange, you’re insulated from a future run of falling T-bill auctions.

What S$20,000 Actually Earns: 6 Months vs 10 Years

Percentages are easy to skim past. Here’s what the numbers look like in dollars, using S$20,000 as a working example — the amount you’d need to set aside in CPF OA before investing further, making it a realistic illustrative figure.

Over a single 6-month T-bill at 1.59% p.a., S$20,000 earns about S$158.56 in interest. Over a single 1-year T-bill at 1.68% p.a., the same S$20,000 earns about S$336.00. Both are guaranteed for that one tenor only — you’d need to reinvest to keep earning beyond that.

Now stretch the horizon to 10 years. If you kept reinvesting a 6-month T-bill at a constant 1.59% p.a. every single auction for a decade — an illustrative assumption only, since future auctions are not guaranteed to match today’s rate — S$20,000 would grow to roughly S$23,432. Over the same 10 years, at the average endowment guaranteed rate of 1.81% p.a. compounded annually, S$20,000 grows to S$23,930 — a gap of about S$498 in the endowment plan’s favour, purely on the locked-in guarantee.

That gap is small, and it flips entirely if T-bill yields keep climbing (as they have for three straight auctions) or shrinks further if they fall. This is the real difference between the two products: an endowment plan’s 10-year projection is a real guarantee you can bank on today, while a T-bill’s 10-year projection is only ever a guess about 20 future auctions you haven’t seen yet.

Can You Use CPF or SRS to Buy T-Bills?

Yes, on both counts — and T-bills are treated more generously here than most other CPFIS investment options. CPF Board’s own published CPFIS product list confirms Treasury Bills are approved for both CPFIS-OA and CPFIS-SA.

This is a meaningful practical difference from stocks, property funds, corporate bonds, and gold, which are capped at 35% and 10% of your investible OA savings respectively. T-bills carry no such cap, since CPF Board treats them as one of the lowest-risk products on the approved list — alongside SGS bonds, fixed deposits, and, notably, endowment policies themselves.

Outside of CPF, T-bills are also eligible for Supplementary Retirement Scheme (SRS) funds, and of course cash. Applications go through DBS, OCBC, or UOB (for cash, SRS, and CPFIS-OA) via ATM or internet banking, or through your CPF agent bank directly for CPFIS-SA. Most retail applicants use a non-competitive bid, which guarantees allotment at the auction’s eventual cut-off yield rather than risking rejection at a self-chosen rate.

The Real Trade-off: Liquidity, Auctions & Lock-In

T-bills are technically tradeable on the SGX secondary market before maturity, but retail trading volume is thin, and the price you’d get reflects prevailing rates at the time — you could sell at a gain or a loss versus your original cost. In practice, most retail holders simply wait the six or twelve months to maturity, then decide whether to reinvest.

Endowment plans lock your capital for a fixed policy term instead — commonly 2 to 30 years, depending on the product. Surrender before maturity typically returns less than what you paid in, sometimes significantly less in the early years, as detailed in our insurance surrender value guide. There’s no secondary market escape hatch — early exit is simply a loss.

The practical difference in liquidity is stark: a T-bill ties up your money for, at most, a year at a time, with a clear exit date you chose yourself at purchase. An endowment plan ties up your money for years, with an exit date fixed by the contract, not by you.

When an Endowment Plan Might Still Make Sense

Given how easy T-bills are to access and reinvest, why would anyone still choose a multi-year endowment plan? A few genuine reasons come up repeatedly across the plans we’ve reviewed:

You want today’s rate locked in for years, not just months. If you believe interest rates could fall meaningfully over the next 5-10 years, an endowment plan lets you lock in ~1.81% (or higher, for the better-guaranteeing insurers) today, insulating you from a future run of lower T-bill auctions. A T-bill offers no such protection beyond its own tenor.

You want a built-in forced-savings contract with a small insurance kicker. A regular-premium endowment plan penalises you for stopping payments, which some savers deliberately use as a discipline mechanism — something a T-bill, bought and forgotten, doesn’t replicate.

You’re chasing the non-guaranteed upside, not just the floor. Some plans illustrate total returns (guaranteed plus bonus) of 3.00%-4.25% p.a. at their stated scenarios — well above where T-bills sit today, if the insurer’s participating fund actually delivers. That’s a real possibility, not a guarantee.

You don’t want to actively manage reinvestment every few months. T-bills require you to reapply at every maturity if you want to stay invested. An endowment plan is a “set and forget” contract for its full term — convenient, though that convenience is also what locks you in.

How to Decide: A Simple 3-Step Framework

Step 1: Check your time horizon. If you’re parking money for under two years, or want to stay flexible, T-bills’ short tenor and comparable (sometimes higher) yield usually wins on practicality alone. If you’re comfortable locking money away for 5+ years, an endowment plan’s fixed-for-term guarantee becomes more relevant.

Step 2: Decide how you feel about rate uncertainty. T-bill yields have risen three auctions running as at 31 July 2026 — but they’ve fallen before, and can again. If you’d rather lock in a known rate today than gamble on where the next 10-20 auctions land, that favours the endowment plan’s guarantee, even at a similar or slightly higher headline rate.

Step 3: Model your own numbers. Run your own amount and horizon through our retirement planning calculator, and check the latest cut-off yields against our T-bill auction results tracker before each application, since yields shift every auction.

Pros and Cons

Frequently Asked Questions

Want More Options Beyond T-Bills and Endowment Plans?

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