Best Fixed Deposit Rates (Oct 2023)
Are you looking for a low-risk way to grow your money without losing your capital? Fixed deposits (or time deposits) might be the answer. It is a popular financial instrument in Singapore, where you can leave your money, forget about it, and come back later to collect the interest. This article will discuss fixed deposits, the advantages and disadvantages, why you should consider them, and how they compare with other low-risk investment options.
October Fixed Deposit Rates
| Bank | Tenor | Minimum Amount | Rate |
| DBS | 12 months | $1,000 | 3.2% |
| UOB | 6 months | $10,000 | 2.7% |
| OCBC | 6 months | $30,000 | 2.7% |
| Maybank | 12 months | $20,000 | 3.65% |
| Citibank | 3 months | $50,000 | 3.2% |
| HSBC | 4 months | $30,000 | 3.0% |
| CIMB | 9 months | $10,000 | 3.4% |
| Standard Chartered | 6 months | $25,000 | 3.0% |
Fixed deposits are offered by banks and provide a higher interest rate than a regular savings account. However, the money will be locked in for a fixed period of time. Every bank offers different interest rates, which typically vary according to the minimum deposit amount and agreed-upon tenor. It is popular among Singaporeans because they are virtually risk-free, with up to $75,000 of the amount being insured by the Singapore Deposit Insurance Corporation (SDIC). Additionally, the interest earned from your fixed deposit sum is exempted from tax in Singapore.
CONs of Fixed Deposit
By locking up an amount of money, you will give up the liquidity of your savings for a fixed amount of time to get the interest. Withdrawing your money before the deposit reaches its maturity date will mean receiving less interest, and there is usually a minimum deposit amount required.
PROs of Fixed Deposit
Despite these drawbacks, fixed deposits can be a good investment choice for those with low-risk appetites. With better interest rates being offered by banks in Singapore, now might be a good time to consider them. Fixed deposits are a low-risk investment, virtually risk-free, and provide guaranteed returns. They are also fuss-free, with no need to deposit fresh funds or buy insurance and investment products, and can be a low-risk component of your investment portfolio.
Fixed deposits are also liquid, which means you can withdraw your money anytime. However, fixed deposits require a fixed commitment period, and there may be early withdrawal clauses that require you to pay a certain administrative fee. You might receive less or no interest if you withdraw your money before maturity. Before you decide to put your money in a fixed deposit account, make sure that you can afford to put it aside for the stipulated amount of time and be cautious of the early withdrawal clauses you are signing off on.
If you’re not convinced that fixed deposits are for you, there are other low-risk investment options with the flexibility of withdrawal in the short term, such as Singapore Saving Bonds (SSB) and Treasury Bills (T-bills). SSBs and T-bills may offer a higher return than a fixed deposit, with each SSB/T-bill tranche’s interest rate differing monthly. However, note that for SSBs and T-bills, you might not get the full amount that you want to be allocated.
Summary
In conclusion, fixed deposits are an excellent option for those with low-risk appetites who want a virtually risk-free way to grow their money without losing their capital. They offer guaranteed returns and are fuss-free, making them a low-risk component of your investment portfolio. Fixed deposits are also liquid, although you should be cautious of early withdrawal clauses. If fixed deposits don’t appeal to you, there are other low-risk investment options available, such as SSBs and T-bills. Regardless of your option, always do your own due diligence when investing.
