Are you looking for the best fixed deposit in September 2024 because the interest rates for Singapore Savings Bonds and Singapore Treasury Bills have fallen? With the high possibility of the Fed announcing interest rates cut in the upcoming Jackson Hole Economic Policy Symposium, the interest rates for SSB, T-Bills and Fixed Deposits have all fallen. Where is the best place to park your money?
As the interest rate cuts will benefit Singapore REITs, most investors have shifted from placing their money in low-risk investments into the stock market. Having said that, we should never place all our money in the same basket. I diversify by investing in Singapore REITs but also park cash in safer instruments such as Fixed Deposits, SSB and T-Bills.
For newbies, what are Fixed Deposits?
Fixed deposits are a type of savings account offered by banks and financial institutions where a sum of money is deposited for a fixed period of time at a fixed interest rate. The duration of a fixed deposit can range from a few months to several years. The interest rate is usually higher than a regular savings account, making it an attractive option for those looking to earn a guaranteed return on their savings.
Fixed deposits are considered a safe investment as they are typically insured by the government up to a certain amount. However, the funds are locked in for the duration of the deposit, meaning they cannot be accessed until the maturity date without incurring a penalty.
Why Fed interest rate cut affect interest rate of fixed deposits?
When the Federal Reserve cuts interest rates, it can directly impact the interest rates on fixed deposits. This is because banks typically adjust their deposit rates in response to changes in the Federal Reserve’s rates.
If the Fed lowers its rates, it becomes cheaper for banks to borrow money, so they may lower the rates they offer on fixed deposits in order to maintain their profit margins. This can lead to lower returns for savers who have their money in fixed deposits, as banks offer less interest in return for keeping funds with them.
As a result, when the Fed cuts interest rates, it can have a cascading effect on the interest rates of fixed deposits offered by banks.
Which Bank Gives You the Best Fixed Deposit Returns?
Let us take a look at the interest rates offered by several Singapore Banks below.
CIMB Bank
Tenure: 3 Months
Interest Rate: 2.95% p.a. (Personal Banking) / 3.00% p.a. (Preferred Banking)
Minimum Amount: S$10,000
Tenure: 6 Months
Interest Rate: 2.95% p.a. (Personal Banking) / 3.00% p.a. (Preferred Banking)
Minimum Amount: S$10,000
Tenure: 9 Months
Interest Rate: 2.65% p.a. (Personal Banking) / 2.70% p.a. (Preferred Banking)
Minimum Amount: S$10,000
Tenure: 12 Months
Interest Rate: 2.65% p.a. (Personal Banking) / 2.70% p.a. (Preferred Banking)
Minimum Amount: S$10,000
UOB Fixed Deposit Rate
Here are UOB fixed deposit interest rates. Despite being lower than other banks, my father continued to renew his fixed deposit with UOB for the convenience as he had his life savings in UOB Bank.
Tenure: 6 Months
Interest Rate: 2.70% p.a.
Minimum Amount: S$10,000
Tenure: 10 Months
Interest Rate: 2.50% p.a.
Minimum Amount: S$10,000
OCBC Fixed Deposit Rate
Here are OCBC fixed deposit interest rates. They are pretty much similar to what UOB can offer.
Tenure: 6 Months
Interest Rate: 2.50% p.a. (OCBC Branch)
Minimum Amount: S$30,000
Tenure: 6 Months
Interest Rate: 2.90% p.a. (Internet Banking)
Minimum Amount: S$30,000
DBS Fixed Deposit Rate
Here are Singapore favourite bank DBS fixed deposit interest rates.
Tenure: 6 Months
Interest Rate: 2.90% p.a.
Minimum Amount: S$1,000 to $$19,999
Tenure: 7 Months
Interest Rate: 2.95% p.a.
Minimum Amount: S$1,000 to $$19,999
Tenure: 8 Months
Interest Rate: 3.00% p.a.
Minimum Amount: S$1,000 to $$19,999
Tenure: 9 Months
Interest Rate: 3.10% p.a.
Minimum Amount: S$1,000 to $$19,999
Tenure: 10 or 11 Months
Interest Rate: 3.15% p.a.
Minimum Amount: S$1,000 to $$19,999
Tenure: 12 Months
Interest Rate: 3.20% p.a.
Minimum Amount: S$1,000 to $$19,999
Hong Leong Finance
Tenure: 6 or 7 Months
Interest Rate: 2.95% p.a.
Minimum Amount: S$20,000 to S$49,999
Tenure: 11 or 12 Months
Interest Rate: 2.80% p.a.
Minimum Amount: S$20,000 to S$49,999
Tenure: 6 or 7 Months
Interest Rate: 3.00% p.a.
Minimum Amount: S$50,000 and above
Tenure: 11 or 12 Months
Interest Rate: 2.85% p.a.
Minimum Amount: S$50,000 and above
RHB Bank
You could earn up to 3.70% p.a. for 3, 6 or 12 months fixed deposit placement with RHB Bank if you sign up for their Wealth Product.
Tenure: 3 or 6 Months
Interest Rate: 2.95% p.a. (Personal Banking) / 3.00% p.a. (Premier Banking)
Minimum Amount: S$20,000
Tenure: 12 Months
Interest Rate: 2.65% p.a. (Personal Banking) / 2.70% p.a. (Premier Banking)
Minimum Amount: S$20,000
Which bank fixed deposit is the best?
Let us take S$20,000 as an example. In my opinion, CIMB, Hong Leong Finance and RHB offers the best competitive fixed deposit interest rate at 2.95% p.a. for a 6-month fixed deposit placement.
Having said that, the cut off yield for last issue of Singapore Treasury Bills is 3.10% p.a. Thus, you may wish to check out the next issue of Singapore Treasury Bills whereby the interest rate may not be too far off.
If you would like to do a 12-month fixed deposit placement, I will opt for DBS Bank as they offer the highest interest rate in town at 3.20% p.a. for deposits between S$1,000 to $$19,999.