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Beginners’ Guide To Fixed Deposits In Singapore

Savers still favour fixed deposits over alternative products with higher yields.


Fixed deposits are a way to earn guaranteed returns on your money that are higher than savings accounts while still being virtually risk-free.

In this article, we’ll examine whether they still have a role to play for your investment and budgeting needs.

Read Also: 6 Investments In Singapore That Provide Guaranteed Principal And Returns

Advantages Of Fixed Deposits

Simplicity: The simplicity of fixed deposits makes them popular among our parents’ generation, since you don’t need any skill, luck, or experience to make money from fixed deposits. You give your money to the bank, and they return your principal plus interest after the tenure is up.

Predictable: Fixed deposits can be interesting for investors looking to build a foundation of stable assets that guarantee their principal and returns, so they would be in a better position to make higher-risk, higher-return investments like stocks, properties, peer-to-peer lending, or even cryptocurrencies. Thus, they are useful for sums of money you absolutely cannot afford to lose to the fluctuations of the market, such as money set aside for renovations, education, or a down payment for a car.

Accessible: Fixed deposits can be made with sums of money as little as $500 and with maturity periods of one month to three years. Unlike instruments like SSB, where you may be allocated less than what you want to invest, especially where the bond is oversubscribed, there is no allocation limit with fixed deposits. Also, the maximum deposit cap on fixed deposits is much higher, unlike the SSB, which has an individual limit of $200,000.

Safe: Singapore banking consumers benefit from a tightly regulated banking eco-system.  In addition, Singapore’s Deposit Insurance Scheme insures up to $75,000 per account for deposits with all full-service banks and financial institutions.

Read Also: Best Savings Accounts In Singapore – If You Don’t Want To Keep Jumping Through Hoops

Disadvantages Of Fixed Deposits

Liquidity: Obviously, you will be giving up liquidity when you place money in a fixed deposit. This means that if you do need that money urgently before maturity, you’ll receive little or no interest. It is worth noting that the amount lost for pre-maturely redeeming your capital is marginal, compared to what you would lose for surrendering other instruments early like endowment plans.

Interest Rates: Non-promotional interest rates for fixed deposits are currently relatively low, even compared to virtually risk-free investments like SSB.

Read Also: [2023 Edition] Complete Guide To Buying Singapore Savings Bonds (SSB)

Which Bank Offers The Best Fixed Deposit Interest Rates?

This is a little tricky to determine, since banks have board rates for fixed deposits that don’t change much and promotional interest rates that can change on a regular basis. Obviously, you should take advantage of the prevailing promotional rates at the point where you wish to make your fixed deposits.

The rates also differ depending on the amount of money you’re depositing. You shouldn’t commit more money just because you want to hit the next interest rate tier, but rather, consider how much you plan to set aside, and look for the bank with the best rates at your desired deposit amount.

Here is a good list of banks to get you started, listed in alphabetical order. The rates are based on a 12-month period.

3.10%

Banks Board Rate Promotional Rate
Bank of China 1.70% (12 months)
Up to $500,000
3.10 – 3.20%
Depends on over-the-counter placement or mobile banking placement
CIMB 0.30 – 0.35%
minimum deposit of $5,000
3.15 – 3.20%
Depends whether personal or preferred banking
Citibank 0.10%
minimum deposit of $10,000
3.15 – 3.20%
(For 3-to-6-month Time Deposits only)
DBS 3.20% – For deposits between $1,000 and $19,999
0.05% – For deposits above $20,000
(nil)
HSBC 0.15%
minimum deposit of $5,000
3.00  3.45%
minimum fresh funds of $30,000 for 3 to 6-month Time Deposit
ICBC 3.15%
minimum fresh fund deposit of $500
3.15 – 3.20%
minimum deposit of $20,000 for over the counter and minimum deposit of $500 via e-banking
Maybank 0.35%
minimum deposit of $1,000
2.90%
minimum deposit of $20,000
OCBC 0.50%
minimum deposit of between $5,000 and $20,000
0.10%
minimum deposit of between $5,000 and $20,000
2.70%
For a 6-month tenure only with a minimum deposit of S$30,000
RHB 0.40%
For deposits between $20,000 and $200,000 
0.55%

For deposits of $200,000 and above
3.60 – 3.68%
minimum deposit of $20,000
Standard Chartered 2.60% 3.00 – 3.20% 
For a 6-month tenure only with a minimum deposit of $25,000
UOB 2.30%
minimum deposit of $5,000
3.10%
Minimum fresh fund deposit of $10,000

Read Also: [2023 Edition] Best Savings Accounts for Working Adults in Singapore

What To Take Note Of Before Making A Fixed Deposit

After selecting the bank with whom you wish to place your money, you’ll also need to decide on the tenure (duration) you desire. In most cases, you can also decide on the renewal action after your fixed deposit reaches maturity, including automatically making a new fixed deposit with your principal and interest (rolling over), just rolling over your principal and withdrawing your interest, or withdrawing both principal and interest.

Finally, you should find out exactly what charges and fees you will incur if you withdraw your fixed deposit early and how much interest you will receive (if any at all).

Read Also: Complete Guide To Cash Management Accounts In Singapore

This article was first published on 15 November 2018 and updated to reflect the latest information.

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