February 2026
Singapore Financial Research Unit
Executive Summary
Singapore’s money market landscape has undergone a significant structural transformation between 2022 and 2026. Driven by the US Federal Reserve’s aggressive rate-hiking cycle and the Monetary Authority of Singapore’s (MAS) policy responses, short-term yields on money market instruments surged to multi-decade highs before entering a gradual easing cycle. This case study examines the evolution of money market account (MMA) and money market fund (MMF) rates in Singapore, analyses the macroeconomic forces at play, evaluates available investment solutions, and assesses the broader impact on individual savers, institutional investors, and the financial ecosystem.
As of early 2026, the 6-month MAS T-bill yield has fallen sharply to approximately 1.6%, down from a peak of 3.7% in early 2025. Meanwhile, money market funds continue to offer competitive yields in the 3.0%–3.6% range, significantly outpacing traditional bank savings accounts and fixed deposits, which now yield between 1.0% and 1.6%. This divergence has accelerated the migration of retail and institutional capital toward professionally managed short-duration instruments.
- Background & Context
1.1 The Rate Cycle: 2020–2026
The era of near-zero interest rates that characterised global monetary policy during the COVID-19 pandemic (2020–2022) suppressed returns across all short-duration instruments in Singapore. Bank savings accounts offered as little as 0.05%–0.10% p.a., and traditional fixed deposits provided only marginally higher yields. During this period, Singaporeans seeking income were forced toward longer-duration bonds or equities, increasing portfolio risk exposure.
The inflection point arrived in mid-2022, when the US Federal Reserve began the fastest rate-hiking cycle in four decades. Singapore, as a highly open small economy, saw its own short-term rates rise in tandem. The SORA (Singapore Overnight Rate Average) climbed sharply, and T-bill cutoff yields exceeded 3.5%–3.8% by 2023–2024. This catalysed an extraordinary level of retail investor participation in short-duration instruments, with MAS T-bill subscription rates hitting record highs. By mid-2025, three Fed rate cuts had begun to reverse this cycle, and by January 2026, the 6-month T-bill yield had fallen to 1.6%.
1.2 Singapore’s Monetary Policy Framework
Unlike most central banks, MAS does not set a policy interest rate. Instead, it manages the SGD nominal effective exchange rate (S$NEER) within a policy band, allowing the exchange rate — rather than the interest rate — to serve as the primary monetary policy tool. This means domestic Singapore dollar short-term rates are largely influenced by US Federal Reserve policy and global liquidity conditions, transmitted via the foreign exchange and swap markets.
The implication for money market instruments is that Singapore investors are exposed to US rate cycles through the SGD money market. When the Fed tightens, SGD short-term rates rise; when the Fed eases, they fall — even absent any direct MAS action. This dynamic is central to understanding the current rate environment and its trajectory. - Current Rate Environment (February 2026)
2.1 Comparative Rate Landscape
The table below provides a snapshot of prevailing yields across key short-duration instruments available to Singapore investors as of February 2026:
Instrument Approximate Yield (p.a.) Liquidity Capital Protection
Standard Bank Savings Account 0.05% – 0.30% Immediate SDIC Insured (up to S$100K)
High-Yield Savings Account Up to 3.0%* Immediate SDIC Insured (up to S$100K)
6-Month MAS T-Bill ~1.6% At maturity / secondary Singapore Government
1-Year Fixed Deposit 1.0% – 1.6% At maturity SDIC Insured (up to S$100K)
SGD Money Market Fund 3.0% – 3.6% T+1 to T+2 Not SDIC Insured
Enhanced Cash Management 2.3% – 2.5% T+1 to T+2 Not SDIC Insured
USD Fixed Deposit (6M) 3.65% At maturity Not SDIC Insured
- Requires fulfilment of multiple qualifying conditions (salary crediting, card spend, insurance, etc.)
2.2 Key Market Participants and Their Offerings
Singapore’s money market fund landscape in 2026 is serviced by a combination of traditional fund managers, digital wealth platforms, and digital banks:
Fullerton SGD Cash Fund: One of the largest MMFs in Singapore with a fund size exceeding S$5 billion, offering yields of approximately 1.6% as of late 2025. It invests primarily in institutional fixed deposits at Singapore banks, and is the underlying fund for several cash management accounts (CMAs).
LionGlobal SGD Money Market Fund: A widely distributed fund investing in high-quality short-term SGD bonds, T-bills, and bank deposits. It serves as the underlying fund for Syfe Cash+ Flexi, offering projected returns of approximately 2.3% after fees as of September 2025.
Phillip Money Market Fund (SMART Park): Available to POEMS clients, this fund invests in T-bills, certificates of deposit, and commercial papers, providing competitive returns with same-day liquidity for account holders.
Endowus Cash Smart: Offers three tiered portfolios (Secure, Enhanced, Ultra) with yields ranging from 1.4% to 2.4% p.a. net of fees as of January 2026, accessible with no minimum investment through a trust account structure.
StashAway MMF Portfolios: Offering yields in the 3.3%–3.6% range as of January 2026, these are positioned as the market-leading options for yield-maximising investors willing to accept the absence of SDIC insurance.
Digital Bank Offerings (MariBank, Trust Bank, MooMoo Cash Plus, Tiger Vault, Webull Moneybull): These newer platforms have democratised access to money market instruments, lowering minimum investment thresholds to as low as S$1 and offering user-friendly interfaces.
- Macroeconomic Drivers & Analysis
3.1 Federal Reserve Policy Transmission
The primary driver of Singapore’s money market rate trajectory is US monetary policy. Following three consecutive rate cuts by the Federal Reserve in 2025, global short-term yields have declined. This has been directly transmitted to SGD money market rates through the cross-currency swap market and the repricing of underlying assets (T-bills, commercial paper, bank deposits) held by Singapore MMFs.
The mismatch between MMF yields (3.0%–3.6%) and T-bill yields (~1.6%) as of early 2026 is explained by the fact that MMFs hold a diversified portfolio of instruments with varying maturities. When rates fall, the short-term assets mature and are reinvested at lower yields; hence, MMF yields are expected to gradually converge toward the T-bill benchmark in coming quarters.
3.2 Inflation Dynamics
Singapore’s Consumer Price Index (CPI) averaged 1.2% year-on-year in early 2026, above MAS’s long-run comfort zone but well below the peaks of 2022–2023. This moderate inflationary backdrop has an important implication: real returns on short-duration instruments are currently positive for most categories, unlike the 2021–2022 period when inflation far exceeded nominal deposit rates. However, as MMF yields continue to compress, the real return advantage will erode unless inflation also declines.
3.3 SGD Exchange Rate Considerations
MAS’s exchange rate-centred policy framework has maintained SGD stability, which has had a secondary effect on money market dynamics. A stronger SGD relative to USD reduces the attractiveness of USD-denominated money market instruments for SGD-based investors. Conversely, with USD fixed deposit rates still at 3.40%–3.65% in Singapore as of February 2026, USD-denominated instruments remain compelling for those with natural USD exposure or holding power over exchange rate risk. - Outlook (2026–2027)
4.1 Interest Rate Trajectory
Market consensus as of early 2026 points to continued, gradual easing of global interest rates. The Federal Reserve’s dovish pivot, combined with moderating US inflation, suggests further rate cuts are probable through 2026. For Singapore’s money market:
6-month T-bill yields are projected to remain in the 1.4%–2.0% range through 2026, barring major global shocks.
MMF yields are expected to gradually compress from current levels (3.0%–3.6%) toward the 2.0%–2.5% range by end-2026, as higher-yielding short-term assets mature and are reinvested at lower prevailing rates.
Fixed deposit rates at major banks (DBS, OCBC, UOB) are likely to remain in the 1.0%–1.5% range, reflecting ample bank liquidity and limited need to compete aggressively for retail deposits.
High-yield savings accounts with behavioural conditions will likely maintain headline rates of 2.0%–3.0% to retain deposits, though effective rates for many customers will remain lower.
4.2 Structural Shifts
Beyond the rate cycle, several structural changes are reshaping Singapore’s money market landscape:
Fintech-driven democratisation: Digital platforms have permanently lowered barriers to MMF access, enabling retail investors to participate in institutional-grade yield strategies with as little as S$1.
Increased financial literacy: The T-bill ‘craze’ of 2023–2024 has left a lasting imprint on retail investor behaviour, with a cohort of savers now actively comparing T-bill, MMF, and fixed deposit yields rather than defaulting to passbook savings accounts.
Competition from digital banks: GXS Bank, MariBank, and Trust Bank are intensifying competition for deposits, likely sustaining above-average savings rates even as benchmark rates decline.
CPF as benchmark: The CPF Ordinary Account rate (2.5% p.a.) and Special Account rate (4.0% p.a.) serve as implicit benchmarks for Singapore savers. As money market rates approach and dip below CPF rates, voluntary CPF top-ups are expected to increase. - Strategic Solutions for Investors
5.1 Retail Investor Framework
Given the declining rate environment, Singapore retail investors should consider repositioning their short-duration cash allocations using the following framework:
Tier 1: Emergency Fund (0–3 Months Expenses)
Priority: Immediate liquidity and SDIC insurance. Recommended instruments include high-yield savings accounts (DBS Multiplier, OCBC 360, UOB One) for accounts meeting qualifying conditions, or digital bank savings accounts (GXS FlexiSavings, MariBank Save). Accept lower yields (1.5%–3.0%) in exchange for absolute capital safety and instant access.
Tier 2: Short-Term Reserves (3–12 Months)
Priority: Higher yield with T+1/T+2 liquidity. Recommended instruments include SGD money market funds accessed through low-cost platforms (StashAway, Syfe Cash+ Flexi, Endowus Cash Smart Secure). Current yields of 2.0%–3.5% exceed fixed deposit and T-bill rates, with no lock-in period. Investors should be aware that these products are not SDIC insured, though counterparty risk is mitigated by fund segregation.
Tier 3: Tactical Cash (12+ Month Horizon)
Priority: Yield maximisation with some tolerance for rate sensitivity. Enhanced cash management accounts (Endowus Cash Smart Ultra, Syfe Cash+ Guaranteed) or USD fixed deposits (for investors with currency flexibility) can provide yields of 2.4%–3.65%. Ladder fixed deposit maturities to manage reinvestment risk in a declining rate environment.
5.2 Institutional Investor Strategies
Institutional investors — including family offices, corporate treasuries, and not-for-profit endowments — face distinct considerations. In the current environment, the following strategies are recommended:
Duration extension: As short-term rates decline, the relative appeal of extending duration into 2–3 year Singapore Government Securities (SGS) bonds improves, locking in yields before further compression.
Currency diversification: Maintaining a portion of liquid reserves in USD money market instruments (yielding 3.4%–3.65%) provides a yield pickup over SGD equivalents, subject to hedging costs.
Laddered T-bill strategies: For large pools of capital requiring SDIC-equivalent safety, laddering 3-month and 6-month T-bill purchases smooths reinvestment risk and ensures regular maturity events for capital deployment.
MMF operational efficiency: Large-cap MMFs such as the Fullerton SGD Cash Fund and Phillip MMF offer institutional share classes with lower fee loads, improving net yield outcomes. - Impact Assessment
6.1 Impact on Individual Savers
The past three years have witnessed a material improvement in financial literacy and yield awareness among Singapore retail savers. The era of high T-bill yields attracted hundreds of thousands of new participants to short-duration investment markets, many of whom were previously content with passbook savings rates of 0.05%–0.10%.
The ongoing transition to lower rates creates a dual risk. First, yield-chasing behaviour may push less sophisticated investors toward higher-risk instruments (equity-linked structured products, longer-duration bonds) in search of yield, potentially misaligning risk profiles. Second, those who have become accustomed to earning 3%–4% on liquid reserves may underestimate the structural decline in returns, leading to inadequate savings buffers.
6.2 Impact on the Banking Sector
Singapore’s major domestic banks (DBS, OCBC, UOB) face a complex balancing act. During the high-rate period of 2023–2024, rising interest rates boosted net interest margins (NIMs), contributing to record bank profits. As rates decline, NIMs will compress, exerting downward pressure on earnings. Simultaneously, banks must defend market share against digital banks and fintech platforms offering competitive deposit rates with lower overhead costs.
The migration of retail deposits toward MMFs and cash management accounts — while relatively modest in absolute terms — represents a structural competitive threat that established banks are addressing through product innovation (e.g., digital-only savings accounts, robo-advisory integrations) and loyalty programmes.
6.3 Impact on the Fintech Ecosystem
The high-rate environment of 2022–2025 served as a powerful acquisition catalyst for Singapore’s fintech wealth platforms. StashAway, Syfe, Endowus, and digital banks reported significant growth in assets under management (AUM) and customer acquisition during this period, as consumers sought platforms offering superior yields with user-friendly interfaces. The transition to lower rates poses a retention challenge, as the yield advantage of MMFs over bank deposits narrows. Platforms are responding by expanding product breadth (equities, bonds, insurance, CPF advisory) to deepen customer relationships beyond pure cash management.
6.4 Macroprudential Considerations
From MAS’s perspective, the proliferation of MMFs and cash management accounts raises several macroprudential considerations. The Chocolate Finance withdrawal incident in 2025 — which triggered significant public attention and highlighted risks associated with platforms that had less transparent structures — underscored the importance of investor education and regulatory clarity around product disclosures. MAS has progressively tightened disclosure requirements for CMAs, requiring clear communication of the absence of SDIC insurance, underlying fund compositions, and redemption terms.
The systemic risk posed by large MMFs experiencing simultaneous redemptions — a phenomenon observed in US money markets during periods of stress — remains a theoretical concern. However, Singapore’s MMFs, by investing primarily in high-quality SGD bank deposits and government securities, carry lower contagion risk than their US counterparts. MAS’s oversight of fund managers under the Securities and Futures Act provides an additional layer of regulatory protection. - Recommendations
7.1 For Policymakers
Continue to enhance MMF disclosure standards, particularly around the distinction between capital-at-risk MMFs and SDIC-insured bank deposits, to protect retail investors in a declining rate environment.
Consider publishing standardised comparison tools for short-duration instruments to reduce information asymmetry and support informed consumer decision-making.
Monitor deposit migration from banks to fintech platforms for systemic liquidity implications, particularly during periods of market stress.
7.2 For Financial Institutions
Banks should enhance behavioural-condition savings accounts with clearer, more accessible qualifying criteria to compete effectively with frictionless MMF platforms.
Asset managers should reduce MMF expense ratios to maintain net yield competitiveness as gross yields decline.
Fintech platforms should prioritise financial education content to help customers understand the yield trajectory and make appropriate reallocation decisions.
7.3 For Individual Investors
Rebalance cash allocations toward instruments that lock in currently elevated MMF yields before further compression. Favour funds with longer weighted average maturities within the money market universe.
Reassess the role of CPF voluntary top-ups as an attractive risk-free yield alternative, particularly as market rates approach and fall below CPF Ordinary Account rates.
Avoid reaching for yield by migrating to higher-risk instruments (long-duration bonds, structured products) without a commensurate adjustment in risk tolerance or investment horizon. - Conclusion
Singapore’s money market rate environment in 2026 represents a defining transitional moment. After three years of historically elevated short-term yields that transformed retail saving behaviour and supercharged fintech growth, the market is entering a structural decompression phase. Money market funds currently occupy an enviable position — offering yields of 3.0%–3.6% that substantially exceed T-bills and fixed deposits — but this advantage will erode as the Fed’s easing cycle progresses and underlying assets reprice at lower rates.
The lasting legacy of this rate cycle is a more financially engaged and yield-aware Singaporean investor base. The challenge for investors, institutions, and policymakers alike is to translate this heightened awareness into durable, well-calibrated financial behaviours that remain appropriate across the full interest rate cycle — not merely during periods of elevated returns.
For Singapore’s financial ecosystem, the transition underscores the importance of product diversification, transparent regulation, and sustained financial literacy investment. Institutions that position themselves as trusted, full-spectrum financial partners — rather than simply yield-maximisation vehicles — will be best positioned to retain and grow their customer relationships as the rate environment continues to evolve.
References & Data Sources
Monetary Authority of Singapore (MAS) — T-bill yield data and monetary policy statements
StashAway Singapore — Complete Guide to Money Market Funds in Singapore (January 2026)
Endowus Singapore — Cash Smart product yields and fund disclosures (January 2026)
Syfe Singapore — Top Money Market Funds in Singapore (September 2025)
Dr Wealth — Best Cash Management Accounts in Singapore (September 2025)
Beansprout — Best Money Market Funds in Singapore; Best USD Fixed Deposit Rates (February 2026)
Planner Bee — 8 Money Trends Singaporeans Must Watch in 2026 (February 2026)
IMF / Moody’s Analytics — Singapore Money Market Rate Data (2025)