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The Best Fixed Deposits of May 2020

May 7, 2020May 7, 2020 My Sweet Retirement Leave a comment

Looking for the best fixed deposits in Singapore? There are varying fixed deposit promotions in terms of interest rates, tenure period offered by the banks in May 2020. As we are still in the “circuit breaker” period, the challenge came when customers are unable to physically be present at the bank to sign up for the fixed deposit promotion. As such, many banks have offered to their customers to do their fixed deposit place via mobile or internet banking.

The 1 year interest rate for June 2020 Singapore Savings Bonds has fallen as low as 0.57%, thus any of the fixed deposits promotion below will beat the Singapore Savings Bonds.

I have shared many other financial instruments that is similar to what fixed deposits can offer. They are endowment plans such as Tiq 3 Year Endowment Plan and China Taiping i-Save Plan. The benefit of these endowment plans is the guaranteed capital upon maturity which is similar to what fixed deposits offer.

I have also recently shared on the benefits of Singlife, which is an insurance savings plan that offers you 2.5% p.a. for up to S$10,000.

Nevertheless, if you still prefer traditional fixed deposits, below are the best fixed deposits promotion that I have found for May 2020.

DBS Fixed Deposit

Interest Rate: Refer below, Minimum Placement: S$1,000, Promotion Valid Until: Not stated

For a minimum amount of S$1,000, you can perform a fixed deposit placement with DBS.

For a 12 months placement of S$10,000 at 1.40% p.a., the interest that you will receive upon maturity is S$140.

MayBank iSAVvy Time Deposit

Interest Rate: 1.20% (12 months) or 1.40% (24 months), Minimum Placement: S$25,000, Promotion Valid Until: Not stated

I found some changes to the time deposit offered by MayBank. It seems that MayBank had decided to do away with their traditional time deposit and replace with the iSAVvy Time Deposit.

This promotion is valid from 17th April 2020 onwards for a minimum placement amount of S$25,000 in iSAVvy Time Deposit via Maybank Mobile/Online Banking (for individuals only).

For a 12 months placement of S$25,000 at 1.20% p.a., the interest that you will receive upon maturity is S$300.

For a 24 months placement of S$25,000 at 1.40% p.a., the interest that you will receive upon maturity is S$704.90.

CIMB Fast Fixed Deposit Promotion

Interest rate: 1.10% per annum, Minimum Placement: S$10,000, Promotion Valid Until: 31st May 2020

CIMB is keeping their interest rate for Fast Fixed Deposit at 1.10% p.a. for a 3, 6 or 12 month placement.

For 3 months, 6 months and 12 months placement of S$10,000 at 1.10% p.a., the interest that you will receive upon maturity is S$27.50, S$55, S$110 respectively.

Hong Leong Finance Deposit Promotion

Interest Rate: Up to 1.10%, Minimum Placement: S$20,000, Promotion Valid Until: Not stated

For 12 months placement of S$20,000 at 1.05% p.a., the interest that you will receive upon maturity is S$210.00.

Deposit Amount	3 month	6 month	12 month
S$20,000 to < S$100,000	0.70%	0.90%	1.05%
S$100,000 and above	0.75%	0.95%	1.10%

Standard Chartered Bank Singapore Dollar Time Deposit

Interest Rate: 0.90%, Minimum Placement: S$25,000, Promotion Valid Until: 9th May 2020

For 8 months placement of S$25,000 at 0.80% p.a., the interest that you will receive upon maturity is S$133.33.

For 8 months placement of S$25,000 at 0.90% p.a., the interest that you will receive upon maturity is S$150.00.

Minimum Placement	Tenure	Promotional Rate	Priority Banking Preferential Rate
S$25,000	8 months	0.80% p.a.	0.90% p.a.

UOB Time Deposit

Interest Rate: 1.25%, Minimum Placement: S$20,000, Promotion Valid Until: 31st May 2020

For 10 months placement of S$20,000 at 1.00% p.a., the interest that you will receive upon maturity is S$166.67.

Minimum Placement (Fresh Funds)	Tenor	Promotional Rate
S$20,000	10 month	1.00% p.a.
S$150,000	11 month	1.25% p.a.

OCBC Time Deposit

Interest Rate: 0.95%, Minimum Placement: S$5,000, Promotion Valid Until: 31st May 2020

Minimum Placement (Fresh Funds)	Tenor	Promotional Rate
S$5,000	12 month	0.95% p.a.

For 12 months placement of S$5,000 at 0.95% p.a., the interest that you will receive upon maturity is S$95.00.

OUE Commercial REIT 1Q2020 Financial Results

May 6, 2020May 6, 2020 My Sweet Retirement Leave a comment

OUE Commercial REIT (OUE C-REIT) has increased its market capitalisation from S$1.3 billion to S$3.0 billion after its merger OUE Hospitality Trust. The REIT now sits at position 12 in terms of ranking by market capitalisation.

On 5th May 2020, OUE Commercial REIT has released its 1Q2020 financial result. How does OUE Commercial REIT fare after its merger, especially during the COVID-19 pandemic?

Gross Revenue increased by 40.5% to S$77.7 million. Net Property Income (“NPI”) also increased 42.5% to S$62.1 million. The amount for distribution was S$37.6 million. However, no distribution per unit (“DPU”) was declared because OUE Commercial REIT has changed its distribution frequency to a semi-annual basis.

Below is the 1Q2020 financial results.

1Q2020 Financial Results

	1Q2020 (S$’mil)	1Q2019 (S$’mil)	YoY(%)
Gross Revenue	77.7	55.3	40.5%
Net Property Income	62.1	43.6	42.5%
Distributable Amount	37.6	26.0	44.5%

Occupancy

As you can see below, the occupancy for its commercial portfolio stood healthy at 94.3%.

Below is the average passing rent for the offices. I can see that passing rent is improving for its Singapore offices. The passing rent for its Shanghai offices as on a decline last quarter but has improved slightly in this quarter.

Revenue Per Available Room (RevPAR)

For the hospitality portfolio, we will now look at the RevPAR which is used to measure its hotel performance.

As we can see below, RevPAR fell dramastically. This is due to strict travel restrictions imposed from end January 2020. There was significant loss of demand from tourist arrivals as well as postponement and cancellation of planned MICE and social events. Although there was replacement demand from those on self-isolation as well as workers affected by border shutdowns, the operating environment remained weak.

The RevPAR at Mandarin Orchard Singapore declined 47.7% to S$110. Crowne Plaza Changi Airport recorded a decline of 23.9% to S$141.

Debt

The current gearing ratio stood at 40.2%. I still find this on the high side even though there was a decline as compared to 40.3% in 4Q2019.

Current Dividend Yield

Based on the current share price of S$0.40 and FY19 full year distribution of 3.31 cents, this translate to a current dividend yield of 8.23%.

Summary

In view of the COVID-19 pandemic, OUE Commercial REIT seems to be holding up well. The merger has proved to be beneficial. As you can see below, the office segment contributes 59.4% in terms of revenue. Retail segment and Hospitality segment makes up 18.9% and 21.7% respectively.

The increasing passing rent of its office portfolio can cushion the loss of revenue from its retail and hospitality segment which is badly impacted by COVID-19 pandemic.

While we can’t conclude the occupancy of the offices will not be impacted by the COVID-19 pandemic totally, having diversified asset types have proven to improve the resiliency of OUE Commercial REIT.

OUE Commercial REIT is now trading at an attractive current dividend yield of 8.23%. I am expecting the estimated dividend yield of 2020 to be lower given the lower contribution from the retail and hospitality segment but it should still hold up well as compared to other REITs with pure hospitality assets.

OUE Commercial REIT makes up 3.15% of my stock portfolio.

June 2020 Singapore Savings Bonds SBJUN20 GX20060S is 1.05%

May 5, 2020May 5, 2020 My Sweet Retirement Leave a comment

The effective interest rate for June 2020 Singapore Savings Bonds (SBJUN20 GX20060S) is 1.05% if you held it for 10 years. This is the lowest interest rate since inception of the Singapore Savings Bonds. As you can see from the chart above, the interest rate has been on the decline. The COVID-19 pandemic that started in March 2020 had caused the interest rate to fall dramatically.

The minimum amount you can purchase for Singapore Savings Bonds is S$500. If you decide to hold and sell it for 1 year, the effective interest rate is 0.57%.

There are alternative financial instruments out there that offer higher interest rates. They are short term endowment plans such as Tiq 3 Year Endowment Plan and China Taiping i-Save Plan which offers an interest rate of 2.10% p.a. and 2.18% p.a. respectively.

The latest attractive financial instrument that I have signed up for is Singlife Account that offers you an attractive interest rate of 2.5% p.a. Singlife Account is an insurance savings plan. There is no lock in period, no monthly fees and you can withdraw your money anytime.