Treasury bills (T-bills) are Singapore Government Securities (SGS) with a short maturity that are issued at a discount to their face value. It is relatively low-risk, and you can park your money securely because it is backed by the Singaporean government. T-bills are considered short-term bonds because their maturities range between six months and one year.

T-bills, unlike Singapore Savings Bonds (SSB) and SGS bonds, do not issue interest (coupons) on a periodic basis. Rather, T-bills are purchased at a discount to their face value (par value), with investors receiving the face value upon maturity. The interest paid at maturity is equal to the difference between the purchase price and par value.

From a Shariah perspective, the operation of T-bills is not in line with Shariah principles for the following reasons:

• T-bills are based on riba al-qard (debt-based interest) that guarantees an additional benefit over and above the principal amount. This does not comply with Shariah, as it is stated in the Shariah maxim that: “Any loan that entails (stipulated) profit or benefit is usury” (كل قرض جر منفعة فهو ربا).
• There is an element of risk-shifting in T-bills, of which the principal amount is guaranteed by the issuer regardless of the fund performance. This is contrary with the core concept of risk-sharing in Islamic investing and the Shariah maxim of “profit should be in line with risk-taken” (الْغَرْمُ بِالْغَنْمِ).

Therefore, it is advisable for Muslims to explore other available options of Shariah-compliant investment schemes in Singapore, such as Shariah-compliant stocks, Islamic unit trust funds, and so on.

Allah knows the best.