Treasury Bills 2024

Build Passive Income with Fixed Deposits

In my previous post, I shared on how to build passive income with fixed deposits as one of the methods to help with retiring early in Singapore. Building passive income is important if you want to retire early as it helps to mitigate against longevity and inflation.

Fixed deposit is a type of bank account where you deposit a lump sum of money for a predetermined duration. In return, the bank pays you a fixed rate of interest on that amount. Fixed deposits are low-risk investments because they are practically risk-free. In Singapore, your deposits are also insured by the Singapore Deposit Insurance Corporation (SDIC) for up to S$75,000.

I have one fixed deposit placement with CIMB Bank which is maturing in April 2024. As usual, I will use the principal amount with the collected interests and continue to do another fixed deposit placement.

I am actually executing fixed deposit laddering. Fixed deposit laddering is a smart investment strategy that allowed me to optimize my returns while maintaining liquidity. I have created a ladder of fixed deposits. Instead of investing a lump sum amount in a single long-term fixed deposit, I spread my investment across multiple fixed deposits with varying tenures.

Fixed deposit laddering allowed me take advantage of better rates as they become available. Having fixed deposits maturing at different intervals ensured that I always have access to funds when needed.

Now, let us take a look at the various fixed deposit rates that banks are offering in March 2024.

OCBC Bank Fixed Deposit

Let us first take a look at the fixed deposit offered by one of Singapore’s popular bank OCBC. The minimum placement for OCBC bank’s fixed deposit remained high at S$30,000.

The highest fixed deposit rate offered by OCBC is 2.90% p.a. for a tenor of 6 months. However, this applies only if you do the placement via Internet Banking. If you do the placement over the counter at any OCBC branch, you will only receive 2.70% p.a. for a fixed deposit placement of 6 months.

Tenor Interest Rate (p.a.) Minimum Deposit (Fresh Funds) Banking Type
6 months 2.70% S$30,000 Any OCBC Branch
6 months 2.90% S$30,000 Internet Banking
12 months 2.80% S$30,000 Internet Banking

How much interest will you receive? For a fixed deposit placement of S$30,000 with OCBC Bank for 6 months via Internet Banking, the interest you will receive upon maturity is S$435.

UOB Bank Fixed Deposit

Similar to OCBC Bank, UOB Bank is offering the same interest rate of 2.90% p.a. for a tenor period of 6 months. However, UOB Bank’s fixed deposit minimum amount is lower at S$10,000 as compared to OCBC Bank’s minimum amount of S$30,000.

Tenor Interest Rate (p.a.) Minimum Deposit (Fresh Funds) Banking Type
6 months 2.90% S$10,000 All
10 months 2.70% S$10,000 All

If you make a fixed deposit placement of S$10,000 with UOB Bank for 6 months, the interest you will receive upon maturity is S$145.

DBS Bank Fixed Deposit

DBS Bank is also offering 2.90% p.a. for a fixed deposit placement of 6 months. I think the part where DBS Bank wins over the other banks is the increasing interest rates p.a. if you do a longer placement with them up to 12 months.

DBS Bank is giving you up to 3.20% p.a. for a 12 months fixed deposit placement. If you placed S$10,000 with DBS Bank for 12 months, the interest that you will received upon maturity is S$320.

 

CIMB Bank Fixed Deposit

As you can see from the table below, CIMB Bank’s 6 months fixed deposit is the most attractive at 3.35% p.a if you compare it with OCBC and UOB Bank. A 6-month fixed deposit placement of S$10,000 with CIMB will give you an interest of S$167.50 upon maturity.

The interest rates for CIMB’s 9 and 12 months fixed deposit is disappointing lower at 3.15% and 3.05% p.a. respectively.

Tenor PERSONAL BANKING
ONLINE PROMO INTEREST RATE (%P.A.)
$10,000 AND ABOVE
PREFERRED BANKING
ONLINE PROMO INTEREST RATE (%P.A.)
$10,000 AND ABOVE
3 months 3.30% 3.35%
6 months 3.35% 3.40%
9 months 3.15% 3.20%
12 months 3.05% 3.10%

RHB Bank Fixed Deposit

RHB Bank is offering 3.15% p.a. for a 6 months fixed deposit placement. For a S$20,000 fixed deposit placement with RHB Bank, the interest that you will receive upon maturity is S$315.

Tenor Personal Banking
(p.a.)
Premier Banking
(p.a.)
Minimum Placement
(S$)
6 months 3.15% 3.20% S$20,000
12 months 3.00% 3.05% S$20,000

The Best Fixed Deposit Promotion in March 2024?

If you are looking for a short term fixed deposit placement such as 6 months, CIMB Bank is the clear winner as the bank gives you the highest interest rate at 3.35% p.a.

However, if you are looking at a longer term fixed deposit ranging from 7 to 12 months, then I will go for a fixed deposit placement with DBS Bank because it gives you 3.20% p.a. for a 12 months fixed deposit placement.

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