Fixed Deposit Rates are interest rates offered by banks and other deposit-taking financial institutions that offers or adds interest to the money deposited to them within a specific fixed period of time. As opposed to a savings account, where you can withdraw anytime, fixed deposits require that the deposit be kept for the duration agreed upon. In return for this commitment, they pay a higher interest rate than is normally paid on savings accounts. This is because they are able to invest these funds for longer periods of time, reducing risk and potentially earning higher returns.
Commitment periods are normally set at between 3 months and 12 months, but some banks or financial institutions allow shorter or longer terms. The interest rate that you will earn usually depends on the length of your commitment.
All opening of accounts are free, however, minimum deposit may vary from one financial institution to another.
Ultimately, the best fixed deposit rate would depend on your financial goals, budget, and circumstances. The following are the important factors to be considered in choosing the best fixed deposit rates:
- High Interest Rate: The higher the rate of interest, the greater will be the amount of money that will be added above your deposited amount over the duration of the agreed period
- Competitive Tenure: You need to opt for tenure that fits your financial need but offers the best interest rate for that specific period
- Convenience: Banks publish different rates every month. Typically, it can be a hassle to open an account just to chase after the highest rate of the month. So you may choose a bank or financial institution that can provide you with the greatest convenience and consistently good rates overall.
- SDIC-insured: Fixed/Time Deposits placed in banks are protected under the coverage of the SDIC. The usual cover is S$100,000 per depositor per Scheme member. The coverage is generally limited to deposits in Singapore dollars. Most investment products, like structured deposits, dual currency investments, and foreign currency deposits are not covered by the SDIC. Therefore, investment platforms like Syfe and Stashaway are not SDIC insured. However, they are licensed by the Monetary Authority of Singapore (MAS) and only works with reputable banks, so you can still have peace of mind.
Summary of Best Fixed Deposit Rates in SGD in Sept 2024:
Rates as of 23 Sep 2024
Tenure | Bank/Financial Institution | Apply Here | Rate | Minimum Deposit | Terms and Conditions |
1 month | StashAway Simple Guaranteed | 3.00% | No Minimum Deposit | ||
3 months | StashAway Simple Guaranteed | 3.20% | No Minimum Deposit | ||
Syfe Cash+ Guarantee | 3.20% | No Minimum Deposit | |||
4 months | HSBC | 3.30% | >S$500,000 | ||
Bank of China | 3.00% (Mobile Banking) | S$500 | |||
6 months | HSBC | 3.05% | >S$500,000 | ||
Maybank | 3.20% | S$20,000 | |||
9 months | Maybank | 3.00% | S$20,000 |
Disclaimer: These are promotional rates and are subject to change without prior notice. Do verify the rate of the day!
Conclusion:
Overall, StashAway Simple Guaranteed offers one of the highest interest rates for 1 to 3 months with no minimum deposit. For 4 months tenure, then HSBC and Bank of China have good options. However, the highest interest rate with HSBC is 3.30% for S$500,000 above. Bank of China also offers a competitive rate of 3.00% on mobile banking, which requires a low minimum deposit of S$500. Maybank offers competitive rates for the 6 and 9-month tenures but has higher requirements with a minimum deposit of S$20,000.
When deciding on which fixed deposit account to get, you must consider your personal needs and goals, like which earns competitive rates, minimum deposit amount, how long you want your money to mature, etc.
Frequently Asked Questions:
Will I be able to withdraw my fixed deposit before the maturity date?
- Yes, you can generally withdraw your fixed deposit before the maturity date, however, it may be subject to early withdrawal fees, and most likely, you will not be able to get the full interest — it will most likely be prorated based on the time your money was in the fixed deposit. This differs among banks so it is wise to check their respective terms and conditions and the fees involved.
Is it possible to open a foreign currency fixed deposit?
- Yes, you can open a foreign currency fixed deposit in Singapore, this will allow you to invest in various currencies such as USD, EUR, GBP, and more. Many banks offers this and they also provide different promotions. However, it will not be SDIC insured.
Since Stashaway/Syfe are non-SDIC insured, what are the risks involved?
- While they do not have SDIC insurance as they are not a bank, they are still considered very low-risk investments. Here’s why: your funds are kept in a separate custodian account, separate from Syfe or Stashaway’s own money, so they can’t use your cash for their operations and use as their own assets. This means that you will always have full access and claim to your assets no matter what happens to them.
In the event of StashAway/Syfe gets acquired, goes public, or closes, they will work together with their custodian banks to ensure the orderly transfer of funds and assets to other licensed financial institutions, or the return of all funds and assets to you. You will be able to choose your preferred means.
There is also a risk in the event that the partner bank closes down. However, this risk is brought to the minimum as Stashaway and Syfe only partner with MAS-regulated banks.
