- Banks in Singapore have introduced higher interest rates on deposit and fixed deposit accounts recently.
- The best 1-year fixed deposit rate we found was 4.15% p.a. offered by CIMB. The best 6 month fixed deposit rate was 3.95% p.a. offered by CIMB as well.
- As interest rates on fixed deposits continue to go up, the highest fixed deposit rate is now above the yield on the 6-month T-bill.
- Regular savings accounts are also offering more attractive interest rates, after UOB recently raised the interest rate on the UOB One account to up to 7.8% p.a.
The Telegram community has shown keen interest in a few instruments instruments – fixed deposit accounts, regular deposit accounts, T-Bill and Singapore Savings Bond (SSB).
If you are struggling to choose where to park your money, then you should continue to read on.
I will share with you my strategy and thoughts. (it’s free to read on so why not!)
The best fixed deposit rate in Singapore (December 2022)
Let’s start by talking a little more about fixed deposits.
Fixed deposits earn you a guaranteed amount of interest for the money you put in over a specific period of time.
Typically, you will lock in a sum of money (usually a minimum of $10,000) and the bank will pay you interest after a fixed period.
The downside to a fixed deposit is that you will have to pay a penalty fee if you want withdraw your money early.
What many people have been talking about recently are the mouth-watering interest rates for fixed deposits.
For example, CIMB is dangling a 4.15% interest rate for a 1 year deposit of S$10,000
As an incentive for you to read this article, I’ve compiled a list of the fixed deposit interest rates offered by banks in Singapore.
|Bank||Interest rate per annum (As of 1st Dec)||Tenure||Minimum amount|
|HL Bank||4.00%||12 months||S$100,000|
|Bank of China||3.90% (Mobile placement)||18 months||S$5,000|
|RHB||3.90% (Mobile placement)||12 months||S$20,000|
|Standard Chartered||3.50%||12 months||S$25,000|
|Hong Leong Finance||3.45%||13 months||S$20,000|
Source: Various bank websites as of December 2022
How do fixed deposit rates compare to Singapore treasury bill (T-bill) and Singapore Savings Bonds?
In short, the interest rate on the Singapore 6-month T-bill recently fell to 3.90%. This is lower than the 6-month fixed deposit rate of 3.95% offered by CIMB.
The latest issuance of Singapore Saving Bond (SBJAN23 GX23010Z) offers an interest rate of 2.95% for 12 months. This is also lower than the 12-month fixed deposit rate of 4.15% offered by CIMB.
What is also important to note is that fixed deposits are covered under the Deposit Insurance Scheme.
This means that in the event that the bank faces problems repaying your money, all your insured deposits will be insured up to S$75,000 by the Singapore Deposit Insurance Corporation Limited (SDIC).
The Singapore T-bill and SSB are backed by the Singapore Government, but this does not make them entirely risk free.
For example, you may lose part of your capital if you decide to sell your T-bill before six months. In this case, it might not just be the interest rates you are losing out on!
Also, the interest rate in the recent T-bill auctions has been falling, and there is no guarantee that it will remain even at 3.9% p.a..
Let me try to summarize my thoughts in the table below –
|What I like||What I do not like|
|Singapore 6-month T- bill|
|Singapore Savings Bond|
How do fixed deposit accounts compare to normal deposit accounts?
As seen from the Telegram group, there is a trend where various banks are increasing interest in their flagship savings accounts.
The one that stood out to me was the most updated UOB One Account interest rate, where you can earn up to a whopping 7.8% p.a.!
Final thoughts on fixed deposit
Singapore banks are trying to up their game recently by introducing higher interest rates on deposits and fixed deposits.
It will be interesting to see how much the interest rates on fixed deposit accounts in Singapore will go up further in the next few months.
A caveat – your strategy may differ if your plan is different from mine. That is ok and I am not here to convince you otherwise! (this is not financial advice!)
Be sure to stay tuned because I will be here to share my strategy.
As usual, you can catch me on the Telegram group channel.