Savings vs. CDs (Fixed Deposits) vs. T-Bills: Which to Choose?
A clear, Singapore-focused walkthrough of three popular places to park cash — everyday savings accounts, fixed deposits (what many countries call “CDs”), and Singapore Government Treasury Bills (T-Bills) — including when each option tends to fit best.
At a glance
| Feature | Savings Account | Fixed Deposit (FD/CD) | Singapore T-Bills |
|---|---|---|---|
| What it is | On-demand bank deposit for daily use | Bank deposit locked for a chosen tenor at a fixed rate | Short-term Singapore Government Securities (SGS), sold at auction (6-month or 1-year) |
| Typical tenor | None; withdraw anytime | Commonly 1–24 months (varies by bank) | 6 months or 1 year (auction by MAS) |
| How returns work | Variable interest; may require criteria for bonus interest | Fixed rate for the full tenor | Yield set at each auction’s cut-off; issued at a discount and redeemed at face value at maturity |
| Access to cash | Instant | Before maturity usually incurs early-breakage rules/costs | No early “redemption”; possible to sell on secondary market via banks (price may be above/below cost) |
| Protection | SDIC deposit insurance up to S$100,000 per depositor per member bank | SDIC deposit insurance up to S$100,000 per depositor per member bank | Backed by the Government of Singapore (not a bank deposit) |
| Tax for individuals | Interest from approved banks in Singapore is generally not taxable | Interest from approved banks in Singapore is generally not taxable | Interest from most debt securities is generally not taxable for individuals (exceptions apply to partnerships/trading inventory) |
| Minimum amounts | Varies by account; often low | Varies by bank and tenor | Applications in multiples of S$1,000 (min. S$1,000) |
| How to apply | Open an account with a bank in Singapore | Place/roll a fixed deposit with your bank (branch or online) | Bid via DBS/POSB, OCBC or UOB (digibank/ATM/branch) using Cash, SRS, or CPFIS (OA/SA) |
When to choose what
Pick a Savings Account for day-to-day money, emergency buffers, or when you cannot lock funds. You get instant access and SDIC protection.
Pick a Fixed Deposit when you can lock a sum for a known period and want a guaranteed rate. It remains SDIC-insured, but breaking early may mean lower or no interest and possible charges (policy varies by bank).
Pick T-Bills when you want short-term, government-backed paper and are comfortable with auction pricing. You receive your principal at maturity; yields change every auction. You can sell before maturity via participating banks’ branches, but market prices move.
Singapore-specific details to know
- Deposit insurance: Singapore-dollar deposits in savings and fixed deposit accounts are insured by SDIC up to S$100,000 per depositor per member bank. Monies placed under SRS are also insured up to S$100,000; CPF-related monies are insured separately up to S$100,000. T-Bills are not bank deposits and are not covered by SDIC.
- T-Bill tenors & pricing: Auctions are for 6-month and 1-year T-Bills. They are sold at a discount and redeemed at par; the cut-off yield is the highest accepted yield of successful competitive bids in a uniform-price auction.
- How to apply for T-Bills: Individuals can apply through DBS/POSB, OCBC, or UOB internet banking/ATMs/branches. You may use Cash, SRS, or CPFIS (OA and, after setting aside required balances, SA). Check each bank’s application closing time.
- Competitive vs. non-competitive bids: Non-competitive bids (you accept the cut-off yield) are allotted first, up to 40% of issuance, and may be pro-rated if demand is high. Individuals have an overall allotment cap per auction.
- Early exit for T-Bills: You cannot “redeem” early, but you may sell through participating banks on the secondary market; settlement value depends on market price at the time of sale.
- Tax note (individuals): Interest from deposits with approved banks and interest from most debt securities is generally not taxable for individuals in Singapore. Always review the latest IRAS guidance for your situation.
A simple selector
Need cash anytime? Savings account.
Have a fixed date in 3–12 months and want certainty? Compare FD rate vs. the most recent T-Bill cut-off yield. Choose the higher expected return for your timeline, while noting FD early-breakage rules versus T-Bill secondary-market risk.
Using CPF or SRS? T-Bills can be purchased with CPFIS (OA/SA) and SRS, subject to CPF’s eligibility thresholds and processes.
How to check the latest rates and auction results
- See MAS’s latest T-Bill cut-off yields and auction data.
- Check your bank’s FD board rates/promotions and early-withdrawal policy.
- Confirm SDIC coverage and limits if you hold large deposits across banks.
Common questions
Can I lose money in a fixed deposit?
Your principal is a bank deposit and SDIC-insured up to S$100,000 per depositor per member bank. However, breaking a fixed deposit early can reduce or forfeit interest, and fees may apply depending on the bank’s policy.
Can I sell a T-Bill before it matures?
You cannot redeem early, but you can sell via participating banks on the secondary market. The sale price depends on market conditions and may be above or below what you paid.
Are the returns guaranteed?
FD returns are fixed once placed. Savings account rates are variable. T-Bill yields are determined at auction; once allotted, you lock in that yield until maturity.
Important notes
Rates, fees, eligibility rules (SRS/CPF), insurance limits and auction mechanics can change. For critical decisions, always verify details directly from the official sources below before applying or investing.
Official sources & further reading
- MAS Ask.gov: How T-Bills are allotted and how the cut-off yield works
- MAS Ask.gov: Competitive vs. non-competitive applications (incl. 40% non-competitive allotment)
- MAS Ask.gov: Individual allotment caps and S$1,000,000 non-competitive cap
- MAS Ask.gov: Early exit for T-Bills (no redemption; secondary-market sale via banks)
- MAS SGS data: T-Bill prices & yields (by issue)
- POSB/DBS support: How to apply for SGS Bonds and T-Bills via digibank
- DBS article: T-Bills overview, tenors and minimum application (S$1,000)
- SDIC FAQs: Deposit insurance coverage and limits
