If you've looked at T-bill results lately, you'll have seen them creep up. The one-year T-bill paid 1.92% at its auction on 15 October, its highest this year, The Straits Times reported. Part of the reason is the US Federal Reserve, which raised interest rates in September for the first time since 2023. A Business Times column says central banks have started raising rates again, and borrowing may stay costly for longer. So what does the Fed rate hike mean for your savings, your home loan and your investments here? The short answer: savers are getting a little more, some home loan rates have gone up, and rates here don't follow the Fed one-for-one.
On 16 September, the Fed's rate-setting committee voted 12-0 to raise its target for the federal funds rate by 0.25 percentage point. The new target range is 3-3/4% to 4%.
The Fed said inflation is still too high, and the rise will help bring it back to its 2% goal sooner. It also said the US economy is growing at a solid pace and the jobless rate has changed little.
It was the Fed's first rate rise since 2023, CNA reported. In the Fed's own forecasts, 16 of its 18 policymakers expect the rate to end this year higher than it is now. That points to at least one more quarter-point rise.
Business Times columnist David Kuo notes that central banks began raising rates hard in 2022 and, after a pause, are raising them again. The Fed's vote was unanimous. That annoyed US President Donald Trump, who has claimed the board is against cutting rates.
Use our Singapore inflation rate calculator to check whether your pay is keeping up with prices.
MAS doesn't set an interest rate. Most central banks do. MAS steers the Singapore dollar against a basket of other currencies instead, and calls this Singapore's only form of monetary policy.
The reason is trade. MAS says almost 40 cents of every dollar spent here goes on imports. So the exchange rate has a much bigger effect on inflation than an interest rate would.
So what sets interest rates here? Singapore's capital markets are open, and its policy works through the exchange rate. Because of that, MAS says, rates here are largely set by global interest rates and by what currency markets expect of the Singapore dollar.
You can see it in T-bills. After the Fed's rise, the six-month T-bill's yield jumped from 1.7% to 1.92% at the next auction, on 24 September. An analyst pointed to this in The Straits Times.
It isn't one-for-one, though. CNA reported that Singapore doesn't follow the Fed's decisions directly. US rates can shift the cost of money around the world, and from there they can feed into rates here.
Higher rates can mean better returns for savers, the Business Times column argues. You can see that in the government's own T-bills and Savings Bonds.
Here's what they paid at their latest auctions, as The Straits Times reported on 16 October:
| Product | Latest rate | What to know |
|---|---|---|
| 1-year T-bill | 1.92% (15 October) | No more 1-year auctions in 2026; the next is in January 2027 |
| 6-month T-bill | 1.9% (8 October) | Next auctions on 22 October, 4 and 19 November, 3 and 17 December |
| Savings Bond, November issue | 2.45% a year if held 10 years | 1.67% if you cash out after one year |
T-bills last six months or a year. You buy them below face value and get the full face value back at the end. The difference is your interest.
Savings Bonds can be held for up to 10 years, and you can cash out in any month without a penalty. Both are backed by Singapore's triple-A credit rating, the paper noted.
If you cash out the November bond after one year, you'd earn 1.67%. That's less than the roughly 1.9% that T-bills pay now. The 2.45% average is only for money you leave in for the full 10 years.
These rates are up, but they're well short of the peak. T-bills paid around 1.3% to 1.4% in 2025 and the first half of 2026. In December 2022, the six-month bill reached 4.4%, and the Savings Bond hit its record 3.47% average.
Our guide to fixed deposit rates in Singapore shows how to compare what banks pay. Use our money market fund vs T-bill calculator to put two ways of parking cash side by side.
Our guide to how bonus interest on savings accounts works covers the other place your cash might sit.
It might. Many floating-rate home loans here are priced on compounded SORA plus a margin the bank adds, CNA reported. When SORA goes up or down, so does your interest rate.
SORA, the Singapore Overnight Rate Average, comes from real deals between banks lending to each other overnight in Singapore. Local factors, like how much cash is in the system, move it too. So a 0.25 percentage point rise by the Fed doesn't automatically push SORA, or your mortgage, up by the same amount.
Some fixed rates rose even before the Fed's decision. Banks had raised their fixed home loan rates by around 0.10 to 0.25 percentage point in anticipation, a mortgage adviser told CNA. Banks price fixed packages on where they expect rates to go, not just where they are today.
Who feels it most? A bank economist told CNA the biggest hit would land on households with large loans. It would also hit those whose repayments already take a big share of their income. If you're on a fixed package, or your loan is small, you're likely to feel it less.
Another adviser told CNA to keep some flexibility, given the doubt over where rates could head in 2027.
Use our emergency fund calculator to see how many months of spending your savings would cover if repayments rise.
In CNA's 18 September report, analysts said it was a good time for home owners to take stock of their loans. A fixed package keeps your monthly repayment the same for the fixed period. A floating one may give you more flexibility, if its terms allow.
One adviser told CNA that a lower advertised rate doesn't always bring real savings. He said home owners should first weigh:
Higher rates also bring new chances for investors, the Business Times column argues. Banks could benefit from higher rates, it notes.
Bonds work the other way. A regular bond's price can drop when interest rates rise, so you may not get back all you put in, The Straits Times noted. A Savings Bond is different: you can cash it out at any time and get back the full amount.
Not everyone is moving to T-bills. One chief investment officer told The Straits Times that interest rates here aren't yet high enough to compete strongly with dividends from Singapore-listed stocks. He said he'd be tempted to look again if rates climbed above 3%.
Our guide to exchange traded funds in Singapore explains how bond and stock funds work.
The Fed's forecasts point to one more rise this year, but that isn't settled. A mortgage adviser told CNA not to treat another hike as a done deal. Policymakers' views can change as the economy and world events shift, he said.
Market watchers expect at least one more Fed rate rise by December 2026, and two within the next six months, The Straits Times reported.
Eugene Leow heads fixed-income research at a Singapore bank. He told the paper: "As long as Fed hike bets are in play, we would reasonably expect six-month T-bill rates to continue climbing."
If you're watching T-bills, the six-month bill has five more auctions this year: 22 October, 4 and 19 November, and 3 and 17 December. The next one-year bill won't come until January 2027.
No. MAS doesn't set an interest rate. It steers the Singapore dollar against a basket of currencies. MAS says rates here are largely set by global interest rates and by what currency markets expect of the Singapore dollar. So they tend to follow US moves, but not one-for-one.
It can. Many floating-rate home loans here are priced on compounded SORA plus a bank's margin. SORA also depends on local conditions, so a 0.25 percentage point Fed rise doesn't automatically raise SORA by the same amount, CNA reported.
The one-year T-bill paid 1.92% at its auction on 15 October 2026, its highest this year and up from 1.68% on 23 July. There are no more one-year auctions in 2026, and the next is in January 2027.
You'd earn 1.67% for that year. The 2.45% a year average only applies if you hold the bond for the full 10 years. You can cash out in any month without a penalty.
This is general financial information for Singapore, not personal financial advice. Figures change, so verify current rates against the official sources above before acting. See our full disclaimer.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).