Singapore banks are enticing savers with interest rates above 4%. Since September 2022, there has been a rise in fixed deposit rates in Singapore and in October 2022, the rates hit 3%. In January 2023, the fixed deposit rates are now inching above 4%.
These sweet promotional rates have led to significant growth in demand for time deposits. And why not? Fixed deposits are one way of earning guaranteed returns on your savings while being virtually risk-free. You don’t even need a huge lump sum to get started.
At HSBC, you can enjoy up to 4% fixed interest rates per year for a minimum amount of S$30,000 over seven months. Other banks, such as DBS and UOB offer 3.2% p.a. and 3.95% p.a. respectively.
Comparison of Fixed Deposit Rates
Want to grow your money but without huge risks involved? Consider opening a fixed deposit account since this is an extremely low-risk method of growing your money. Plus, you won’t lose your capital.
Basically, you leave your money to the bank and come back when the tenure is up to collect the interest. With this option, you can grow your money without needing skill or experience. However, you need to find the best fixed interest rates.
To help you get started, here’s a curated list of the best fixed deposit rates in Singapore (January to March 2023).
| Bank | Tenure (Months) | Best Interest Rate (per annum) | Minimum Deposit Amount | Minimum Qualifying Amount |
|---|---|---|---|---|
|
DBS |
12 to 60 months |
Up to 3.20% |
S$1,000 |
S$1,000 to S$19,999 |
|
UOB |
6/10/12 months |
Up to 3.95% |
S$10,000 |
S$1 Million and above |
|
OCBC |
5 months |
3.55% p.a. |
S$5,000 |
S$20,000 |
|
HSBC |
7 months |
Up to 4% p.a. |
S$5,000 |
S$30,000 |
|
Bank of China |
12 months |
Up to 3.85% p.a. |
S$5,000 |
S$300,000 and above |
|
Maybank |
12 months |
Up to 3.90% p.a. |
S$20,000 |
N/A |
|
Citibank |
3 months |
Up to 3.88% p.a. |
S$10,000 |
S$250,000 to 3 Million |
|
CIMB |
6 months |
Up to 3.60% |
S$1,000 |
S$10,000 |
Note: Singapore banks offer fixed deposit promotion rates (time deposit promotions) to woo depositors into opening a savings account. As such, these fixed deposit rates can change at any time without prior notice.
As of writing, the best fixed deposit rate among the round-up of top banks in Singapore is HSBC’s promotional fixed interest rate of 4% p.a. for a 7-month term when you hit the minimum deposit requirement of S$30,000.
If you want to start small, you can consider DBS Fixed Deposit since they offer a decent fixed deposit rate of up to 3.2% p.a. for tenures of 12 to 60 months. Plus, you only need a minimum deposit of S$1,000.
Want to use your CPF Ordinary Account Funds? You can avail of OCBC’s CPF Time Deposit Rate of 3.55% p.a. with a lock-in period of 5 months to help you earn higher returns on your savings.
Best Fixed Deposit Rates by Commitment Period
Fixed deposits allow you to invest a sum of money in an account and you can let it earn interest for a specific tenure. This type of account can be opened in different commitment periods although 3-, 6-, 9-, and 12-month tenures are more common.
After the tenure is up, you will be able to collect your principal amount plus interest. While you can withdraw funds before the commitment period is over, you will forfeit the interest earned and may incur penalty fees.
| Min. Deposit Amount | 3 months | 6 months | 12 months |
|---|---|---|---|
|
>S$1,000 |
N/A |
N/A |
3.20% p.a. |
|
S$5,000 |
3.70% p.a. 3.75% p.a. |
3.75% p.a. 3.80% p.a. |
N/A |
|
S$10,000 |
N/A |
3.60% p.a. |
3.45% p.a. |
|
S$30,000 |
S$3.85% p.a. |
N/A |
N/A |
|
S$50,000 |
N/A |
3.85% p.a. |
3.80% p.a. 3.85% |
|
S$250,000 |
3.88% p.a. |
N/A |
N/A |
|
S$300,000 and above |
N/A |
N/A |
3.85% p.a. 3.90% |
|
S$1,000,000 and above |
N/A |
3.95% p.a. |
3.95% p.a. |
If you’re looking for a short-term tenure of up to 3 months, you can start earning a high fixed interest rate of 3.70% at only a S$5,000 minimum deposit with the Bank of China.
But if you have a significant cash reserve, Citibank is currently offering 3.88% p.a. for a minimum deposit of S$250,000. It is a huge sum of money for a short commitment period.
Bank of China fixed deposit rates are the best for a 12-month commitment period at 3.85% p.a. However, this rate is only possible if you have a minimum deposit amount of S$50,000. If you’re looking at a commitment period of 12 months and don’t have plenty of cash to spare, you’re better off with DBS. For 12 months and less than S$1,000 minimum deposit amount, you will earn 3.20% p.a.
Pros of a Fixed Deposit Account with a Longer Commitment Period
- Choose a longer commitment period if you want to achieve long-term financial goals, such as saving for a home down payment.
- Your money will continue to earn interest throughout the commitment period.
- Long-term tenures usually have attractive high-interest rates which lead to higher returns on maturity
- Earn greater interest, even at board rates.
Cons of a Fixed Deposit Account with a Longer Commitment Period
- Your extra cash will be tied up for 12 months or longer.
- If the fixed interest rates rise further in the months ahead, banks will be offering more attractive promotional rates. If your money is locked in for longer than 12 months, you won’t be able to avail of such promos.
- If you withdraw your money before the maturity period, you will lose interest returns. Plus, you may end up paying penalty fees.
Best Fixed Deposit Rates by Minimum Deposit Amount
Big financial goals are not easy to achieve. But if you start investing and saving now, you’ll be one step closer to achieving it.
Gone are the days when fixed deposits in Singapore come at a hefty minimum deposit amount. Wondering whether you can open a fixed deposit account with your limited cash? Don’t fret! You can open an account for as low as S$500!
Here are the best fixed deposit rates in Singapore 2023:
- Under S$10,000: Bank of China for 6/9/12 months at 3.75% p.a.
- S$20,000 – S$50,000: HSBC for 7 months 4% p.a.
- S$50,000 – S$100,000: UOB for 6/10/12 months at 3.85% p.a.
- Over S$1,000,000: UOB for 6/10/12 months at 3.95% p.a.
| Minimum Fresh Funds | DBS | UOB | OCBC | HSBC | Bank of China | Maybank | Citibank | CIMB |
|---|---|---|---|---|---|---|---|---|
|
Under S$10,000 |
3.2% |
N/A |
N/A | N/A |
3.75% (OTC) 3.80%(Mobile banking) |
N/A |
N/A |
N/A |
|
S$20,000 to S$50,000 |
N/A |
3.55 |
3.55% |
4% |
N/A |
3.90% |
N/A |
3.60% |
|
S$50,000 to S$100,000 |
N/A |
3.85%(6/10/12 months) |
N/A |
N/A |
3.80% (OTC) 3.85% (Mobile banking) |
N/A |
N/A |
N/A |
|
Over S$1,000,000 |
N/A |
3.95%(6/10/12 months) |
N/A |
N/A |
N/A |
N/A |
3.88% |
N/A |
1. Bank of China Fixed Deposit Rates: For Under S$10,000 Deposit Amounts
You can start earning 3.75% p.a. for a minimum deposit of S$5,000. On top of the affordable deposit amount, BOC also has a flexible commitment period. Whether you lock in for less than 12 months, you can still avail of the same promotional interest rate.
If you are looking to put more than S$50,000, the current BOC fixed interest rate is 3.80% with a lock-in period of 12 months.
2. HSBC Fixed Deposit Rate: Best for Deposit Amount of S$20,000 – S$50,000
HSBC’s current promotional rate of 4% p.a. is available for a minimum fresh funds placement of S$30,000. With this fixed deposit account, you can get the most out of your investment by investing any amount between S$20,000 and S$50,000 at a lock-in period of 7 months.
3. UOB Fixed Deposit Rate: Best for Deposit Amounts of S$50,000 and above
Do you have a significant lump sum of cash that you’re not going to use within a 6-month term? Consider opening a UOB Fixed Deposit Account. From 1 March to 31 March 2023, UOB is offering a promotional rate of 3.85% p.a. for a minimum deposit amount of S$50,000.
However, to avail of the highest fixed deposit rate at 3.95% p.a., you’ll need a fresh fund placement of S$1 million and above. Additionally, they are also pretty flexible with the commitment period. You can choose between a 6-, 10-, or 12-month lock-in period. Most banks are limited to one commitment period, typically 3 months.
Pros of a Fixed Deposit Account with a Higher Minimum Deposit Amount
- You will have a higher amount of forced savings, perfect for long-term financial goals.
- Higher deposit amounts, such as a fresh fund placement of S$20,000, typically have higher promotional interest rates than lower deposit amounts, such as S$1,000.
- You will earn higher interest returns at the end of the maturity period.
Cons of a Fixed Deposit Account with a Higher Minimum Deposit Amount
- Since it is a fixed deposit, you won’t be able to use the money throughout the lock-in period.
- If you make a premature withdrawal from your fixed deposit account, you will incur penalty fees. Plus, you will receive no interest returns.
- You will not be able to use your money in case of an emergency.
Benefits of Fixed Deposit Accounts
Still on the fence about entrusting your spare cash to banks?
Fixed deposits in Singapore are considered a safe, secure, and convenient investment solution if you want to earn interest returns from your extra cash within a commitment period. But most of us are still hesitant for fear of losing our hard-earned money.
Doing your research and finding the best option for you will help you make smart financial decisions. If you are still contemplating whether to stash your extra cash in a fixed deposit account, here are a few benefits to consider.
1. Guaranteed Returns
One of the main benefits of fixed deposits is that regardless of prevailing market conditions, you will enjoy interest returns. This is because the interest rates imposed on your deposit amount will be fixed until its maturity. This means even if the market interest rates fall, your deposit amount will keep earning the same level of interest.
For instance, if you are depositing fresh funds amounting to S$20,000 for 12 months at a promotional interest rate of 6.5%, you’ll earn a total interest of S$1,332. Upon maturity, you will receive S$21,332.
2. Low Risk
Fixed deposits are also a good option for those who are afraid to take risks. It is perfect for anyone regardless of age, skills, and knowledge of the stock market. With a fixed deposit, there is little chance you’ll lose your savings.
Unlike investing in the stock market, fixed deposits do not have price volatility. Holding stocks for a set period will not always guarantee a higher return. On the other hand, if you choose the right commitment period at the best rates, you will be guaranteed higher returns.
As such, unless the bank goes bankrupt, you will not lose your money along with the interest. But to ensure the safety and security of your hard-earned savings, the Singapore Deposit Insurance Corporation (SDIC) will insure up to S$75,000 of your deposit amount per bank.
3. Higher Returns on Savings
Compared to a regular savings account, most fixed deposits provide more interest. The current base prevailing interest rate for standard savings accounts ranges from 0.35% to 1% p.a. depending on the minimum deposit amount. On the other hand, fixed deposit amounts provide up to 4% interest p.a.
Additionally, you can open several accounts in different banks to maximize your returns and benefits for as low as S$1,000.
4. Low Maintenance
Once you have stashed your hard-earned savings away in a time deposit, you won’t need to do anything else. You’ll only have to wait for the maturity date to collect your savings plus interest. No need to worry about the account being flagged as inactive or dormant if there are no other activities.
Moreover, fixed deposits typically do not charge additional bank fees and the interest rates will not fluctuate. You don’t have to track minimums or engage with other banking habits to earn bonuses or benefits.
5. Not Taxable
Interest derived from current and fixed deposits with approved banks and licensed financial institutions is exempt from tax, according to the Inland Revenue Authority of Singapore (IRAS). As such, there is no need to declare your interest as long as IRAS approves a bank or financial institution.
It means that all the income that you might gain from the fixed deposit is not taxable and need not be declared as long as IRAS approves a bank or a finance company.
6. You Are Forced To Save
You can think of fixed deposits as forced savings. Since your money is locked away for a certain period, you won’t be able to withdraw it at your whim. That said, you will be able to control impulse purchases and promote the habit of saving so you can reach your financial goals faster.
Note that you can withdraw your deposit amount. However, there may be hefty penalties for early withdrawal. Plus, you won’t get the interest earned.
Drawbacks of Fixed Deposit Accounts
The benefits of fixed deposit accounts will make you believe that it is a profitable and convenient investment choice – and it is! But just like any financial decision, you need to take a look at the full picture and consider the drawbacks as well.
Here are some of the cons of fixed deposit accounts before making your decision:
1. Limited Liquidity
You will have to give up the liquidity of your hard-earned cash for a set period to earn interest. This means if you withdraw your funds before the maturity date, you will have to pay hefty penalty fees. Plus, you won’t get your interest or your interest rate will be reduced.
This also means you won’t have immediate cash on hand in case of emergencies. You may end up borrowing money from banks or licensed moneylenders and pay higher interest rates than what you can earn from your time deposit account. If this happens, you may end up paying more than what you can save.
To mitigate such risk, make sure to stash away cash that you won’t need. Leave enough cash on hand in case of financial emergencies.
2. Low Returns Compared To Other Investments
While fixed deposits provide higher interest rates than regular savings accounts, they still provide low interest rates compared to other forms of investment.
For instance, if you compare fixed deposits with Singapore Savings Bond (SSB), you will be earning the same interest rate throughout your commitment period. On the other hand, with SSB, you can invest for up to 10 years and the interest increases over time, plus, you can withdraw your investment at any given month without penalties.
3. Currency Exchange Rate Risks
Foreign currency fixed deposit accounts are more at risk due to fluctuations. This type of fixed deposit is different from Singapore fixed deposit accounts because it introduces the risk of variable foreign exchange rates. This means the foreign currency exchange rates will influence whether the fixed deposits will earn or lose money.
4. The Risk of Locking In Too Early
Another potential drawback of fixed deposits is that you might miss out on earning more returns due to the fixed interest rate. For instance, you locked in for 6 months at a 3.20% p.a. promotional rate. A few months later, the same bank is offering a promotional rate of 4% p.a. In that case, it is worth keeping tabs on different banks to make smart, and informed decisions.
5. You Can’t Top Up
With a fixed deposit account, you can’t top up your deposit amounts so your savings will go up. You’ll need to make a lump sum deposit when you open your time deposit account. This might be a drawback for regular savers. You can address this inconvenience by opening multiple term deposits with different commitment periods.
6. No Bonus Interest
Unlike a regular savings account wherein you can earn additional interest by performing other banking habits, fixed deposits have fixed interest rates. There is no way to earn bonus rates on your time deposit.
How To Choose the Best Fixed Deposit Account for You?
By now, you already have an idea of the pros and cons of fixed deposits (FDs). Plus, you already know the fixed promotional interest rates offered by major banks in Singapore. But before you open an FD account, consider these tips to choose the best one.
1. Interest Rates
One of the key factors you should look into when choosing an FD account is the fixed interest rate. Obviously, the higher the interest rate, the higher the returns on your savings. Remember, the rate will be fixed throughout your commitment period. Choose a reliable bank that offers a competitive rate.
2. Deposit Tenures
Typically, the longer the term, the higher the interest rate. However, you need to determine the commitment period you are comfortable with. Make sure that you can remain invested in the account for your selected commitment period.
The most common fixed deposit maturity terms are 3, 6, 9, and 12 months. Choose an FD tenure that will match your financial goals and needs.
3. Minimum Deposit Amounts
Thankfully, some banks offer competitive interest rates at low minimum deposit amounts. As such, you don’t need a significant lump sum to start an investment. For instance, you can open an FD account with DBS for as low as S$1,000 and start earning 3.2% p.a.
That said, choose a fixed deposit account with a minimum deposit amount that you can afford. Remember, you won’t be able to access the money you stash into the account.
4. Consider the Penalties
While it is possible to withdraw your deposit amount, you may face significant penalty fees. Before you commit, determine what penalty fees are imposed in the event you choose to exit before the maturity date.
5. Choose a Reliable Bank or Financial Institution
It’s best to open an FD account with a trusted, reputable, and experienced bank or financial company. Take your time reading reviews and customer feedback. Doing so will give you an idea of whether the bank or financial company can truly deliver the promised interest earnings.
You can use these factors when comparing different fixed deposit accounts offered by banks in Singapore. Compare the interest rates, tenure, as well as terms and conditions before making your final decision. This will help you find the best fixed deposit account for your goals and needs.
FAQs
1. How Does a Fixed Deposit Work?
A Fixed Deposit is a type of savings account that you can open for a set commitment period. You will need to deposit an amount to your account and you’ll earn a fixed interest rate throughout the fixed deposit term. You will be able to collect your deposit plus interest earned at the maturity date.
It is a relatively low-risk and convenient way to earn a guaranteed return. However, your money will be locked and you won’t be able to access it. Plus, you can’t top up your savings or earn any bonus interest rates.
2. Which Bank Is Giving 7% Interest on FD?
Unfortunately, no banks in Singapore provide a 7% p.a. interest rate on fixed deposits. The highest interest rate offered by banks is 4% p.a. As of writing, HSBC is offering a promotional rate on 7-month SGD Time Deposits of 4% p.a.
Note that fixed deposit interest rates may change at any given time. Additionally, banks have different promotional rates, tenures, and deposit amounts. It is best to do your due diligence and compare your options by checking the bank’s official website to get the latest information.
3. Is Fixed Deposit a Good Investment?
Fixed Deposits are a great way to earn guaranteed returns on your savings while being virtually risk-free. However, it will still depend on your financial goals and needs. A fixed deposit is a good investment if:
- You have extra cash which you will not need in the immediate future. You can open an FD account for as low as S$1,000 and earn a promotional rate of 3.2% p.a.
- You want a risk-free and convenient investment. Even if something were to happen to the bank, your deposit and interest are protected by SDIC up to S$75,000.
- You want to make sure that your savings will stay in the bank. Since you won’t be able to easily withdraw your money without incurring penalties, you are forced to save.
But if you want to maximize your capital growth, you may want to consider higher-risk investments, such as stock market or real estate trading. These options have much higher returns as compared to fixed deposits.
Read Also: Mutual Funds Singapore
Closing
This year, fixed deposit rates are rising above 4% p.a., making it an attractive investment option for risk-averse individuals. But choosing which bank to stash your hard-earned savings can be overwhelming. On top of that, you need to consider whether the fixed deposit interest rate is competitive enough and at what commitment period to lock in.
Key Takeaways:
- Best fixed deposit rates by commitment period:
- 3-month FD term: Bank of China at 3.70% p.a. at S$5,000 minimum deposit
- 6-month FD term: UOB at 3.85% p.a. at S$50,000 minimum deposit
- 12-month FD term: Bank of China at 3.85% p.a. at S$50,000 minimum deposit and above
- Best fixed deposit rates by minimum deposit amount:
- Under S$10,000: Bank of China for 6/9/12 months at 3.75% p.a.
- S$20,000 – S$50,000: HSBC for 7 months 4% p.a.
- S$50,000 – S$100,000: UOB for 6/10/12 months at 3.85% p.a.
- Over S$1,000,000: UOB for 6/10/12 months at 3.95% p.a.
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