Fixed Deposit Promotions in October 2018

Following my post on CIMB Bank’s latest fixed deposit promotion, I realize many other banks are introducing their fixed deposit promotions as well.

Despite fixed deposits having a locked in period for a specified amount of time (usually 12 or 24 months), fixed deposits offer much lower risks as compared to investment products such as stocks and REITs. For example, REITs have recently suffered a setback when Federal Reserve decided to hike their interest rates in September. My stock portfolio was not spared.

Another comparable investment product which has low risk is the Singapore Savings Bonds. However, you will need to hold it for a longer period of time (10 years) to reap its full interest rate. For example, November 2018 Singapore Savings Bonds offers an effective interest rate of 2.48% if you held it for 10 years. If you have followed my monthly updates, you know that I am a supporter of Singapore Savings Bonds and I have been purchasing Singapore Savings Bonds every month.

If you decided Singapore Savings Bonds does not suit you, below are the fixed deposit promotions I have found so far. Read More

CIMB Bank 9th Birthday Fixed Deposit Promotion

It really has been a very long long time since I wrote about fixed deposits because I could not find any ones that are good and simple to understand. Recently, I found a good deal from CIMB Bank.

As part of their 9th Birthday celebration, CIMB Bank is offering an additional 0.09% interest per annum on all their online promotional SGD Fixed Deposit rates.

You can choose the duration of 3 months, 6 months or 12 months and if you apply online, they offer higher interest rates as shown in the table below.

Interest Rates (% p.a.)
3 Months 6 Months 12 Months
Branch Rate 1.30 1.45 1.55
Online Exclusive Rates 1.49 1.64 1.84

A minimum of S$10,000 per placement is required.

Using S$10,000 as an illustration,

If you place a fixed deposit for 3 months, the total accrued amount (principal + interest) that you will receive is

A = 10000(1 + (0.0149 × 0.25)) = 10037.25
A = $10,037.25

If you place a fixed deposit for 6 months, the total accrued amount (principal + interest) that you will receive is

A = 10000(1 + (0.0164 × 0.5)) = 10082
A = $10,082.00

If you place a fixed deposit for 12 months, the total accrued amount (principal + interest) that you will receive is

A = 10000(1 + (0.0184 × 1)) = 10184
A = $10,184.00

I believe the above is a good deal if you have extra cash to park aside for a short duration of maximum 12 months.

Singapore Savings Bond versus Savings Account versus Fixed Deposits

The latest Singapore Savings Bond (“SBSep17“) is offering 2.12% effective interest rate over a ten years period. Many people have been lamenting about the low interest rates and I also think the Singapore Savings Bond interest rate is not attractive. I decided to do some research by comparing it with similar low risk products out such as a popular high yield Savings account and Fixed Deposit account. I am excluding REITs and Stocks in the comparison as the intention is to park the money somewhere as a form of war chest or savings.

I picked CIMB StarSaver Account, CIMB 12 month fixed deposit and MayBank 12 month fixed deposit. Read More