Looking For Better Returns Than T-Bills? 5 Alternatives And What You Give Up For Higher Returns

T-bills are a straightforward way to earn a return on spare cash without taking stock market risk. Backed by the Singapore Government, they also give us a clear maturity date, which makes them useful when we know roughly when we will need the money.

But when an upcoming T-bill offers less than we would like, it is natural to look elsewhere. The challenge is that a higher interest rate does not always mean a better place for our savings. We may have to commit our money longer, meet monthly banking requirements, or accept changes in our investment’s value.

Here are five alternatives worth comparing with T-bills. Each serves a different purpose, and none should be chosen on its advertised return alone.

#1 CPF Special Account Or Retirement Account

For money we can commit towards retirement, CPF top-ups offer a way to grow our savings without market price fluctuations. The Special Account (SA) and Retirement Account (RA) earn a base interest rate of 4% p.a. from 1 October to 31 December 2026. The Government has also extended the 4% interest rate floor through 31 December 2027.

Members below 55 top up their SA, while those aged 55 and above top up their RA. The SA has been closed for members aged 55 and above since 19 January 2025; when younger members turn 55, their SA savings are transferred to the RA up to the applicable Full Retirement Sum, with the remainder going to the Ordinary Account.

The main consideration is access. Retirement top-ups are irreversible and reserved for retirement payouts, not for a future home purchase or an emergency. Top-up limits also apply: below 55, the limit is based on the current Full Retirement Sum; from 55, it is based on the current Enhanced Retirement Sum.

A higher CPF interest rate can be attractive, but only for money we are comfortable setting aside for retirement.

#2 ABF Singapore Bond Index Fund

The ABF Singapore Bond Index Fund, traded on SGX under stock code A35, provides exposure to a portfolio of Singapore dollar bonds. These include bonds issued by the Singapore Government and government-related entities, with the index also allowing certain other Asian government-related and supranational issuers.

This lets you invest in bonds without selecting individual issues. However, the fund is not capital-guaranteed. Its unit price can fall when interest rates rise, and distributions are at the manager’s discretion. Unlike a T-bill, it has no fixed maturity date at which we receive a predetermined face value.

We also need to interpret yield figures carefully. The portfolio’s weighted average yield to maturity is not the fund’s promised return or distribution yield. Our actual return depends on distributions, price changes and costs, including fund expenses and brokerage charges.

A35 may suit investors seeking longer-term bond exposure who can tolerate price fluctuations. It is less suitable for cash that must be available at a fixed value on a specific date.

#3 Singapore Government Securities Bonds

Singapore Government Securities (SGS) bonds offer another way to invest in government debt. They pay fixed coupons every six months and have longer maturities than T-bills, allowing investors to secure a stream of coupon payments over a longer period.

However, a longer maturity does not automatically mean a higher yield. We need to compare the yield available at the purchase price, rather than simply looking at the coupon rate printed on the bond. If we buy above face value, for example, the yield to maturity will be lower than the coupon rate.

Government backing also does not prevent price losses when we sell early. Bond prices can move with interest rates, and longer-dated bonds are generally more sensitive to those movements. At maturity, the bond repays its face value, which may differ from the amount we paid on the secondary market.

SGS bonds can be useful when their maturity matches our plans. A bond that matures many years from now needs more careful consideration if we may need the money sooner.

Read Also: Complete Guide To Understanding The Different Types Of Singapore Government Securities

#4 Singapore Savings Bonds

Singapore Savings Bonds (SSBs) combine government backing with the ability to redeem before maturity without a market price loss. Each issue has a fixed interest schedule over 10 years, with interest paid every six months.

The useful feature is flexibility. We can submit a redemption request in any month and receive our principal plus accrued interest by the second business day of the following month. This makes SSBs easier to exit at face value than conventional bonds, although the money is not available immediately, as cash in a bank account is.

Applications start at $500 and must be in $500 increments, with an individual holding limit of $200,000. Banks charge transaction fees for applications and redemptions, which matter more for small investments.

When comparing an SSB with a T-bill, use the return for the period we expect to hold it. The advertised 10-year average return is not what we earn in the first year, and an SSB will not necessarily offer a higher short-term return than a T-bill.

Read Also: Complete Guide To Buying Singapore Savings Bonds (SSB)

#5 Savings Accounts With Bonus Interest

Savings accounts can be useful when we want to earn interest while keeping our cash accessible. The trade-off is that bonus interest usually depends on meeting monthly requirements, and banks can revise their rates.

Currently, the UOB One Account offers a maximum effective interest rate of 1.90% p.a. on $150,000, subject to at least $500 in eligible monthly card spending and qualifying salary credit of at least $1,600. The headline rate on an individual balance tier should not be mistaken for the rate earned across the whole account.

The OCBC 360 Account offers an effective rate of 2.20% p.a. on the first $100,000 during its promotional period from 1 August to 31 December 2026, when salary, savings and spending requirements are met. These include qualifying salary credit of at least $1,800, increasing the average daily balance by $500 and charging $500 to selected credit cards each month.

Compare the interest we can realistically earn on our actual balance. Spending more or buying an unsuitable financial product to unlock bonus interest can outweigh the benefit.

Eligible Singapore dollar deposits are insured up to $100,000 in aggregate per depositor per Deposit Insurance Scheme member. Depositing $150,000 at one bank does not mean the entire amount is covered.

Read Also: Best Savings Accounts for Working Adults in Singapore