The Best Fixed Deposits of September 2020

The Best Fixed Deposits of May 2020

Looking for the best fixed deposits in September 2020 in Singapore? If you have 50K, you should read my previous post on Where Will You Put 50K? before you jump straight into Fixed Deposits.

Next, forget about the Singapore Savings Bonds. The 1 year interest rate for October 2020 Singapore Savings Bonds has fallen as low as 0.26%, 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.  One good alternative is buying a short term endowment plan. Endowment plans guarantee your capital upon maturity which is similar to what fixed deposits offer. Most of the short term endowment plans are on limited tranche basis. I have not done any look up for the best endowment plans in September yet. Thus, you can read more about Best Endowment Plans In August 2020 here.

In July, I have signed up for a Dash EasyEarn, which is an insurance savings plan that offers you 2.0% p.a. for the first year up to S$20,000. The estimated interest rate p.a. is 1.5% thereafter.

However, if you are planning to sign up for Dash EasyEarn, I suggest to sign up for Singlife Account first whereby you earn 2.5% p.a. for the first $10,000. For the balances beyond S$10,000, you can then place the rest of the money with Dash EasyEarn to earn 2.0% p.a.

Nevertheless, if you still prefer traditional fixed deposits, below are the best fixed deposits promotion that I have found for September 2020. The current low interest rates offered by most banks remained unattractive to me.

Among the banks below, I prefer the fixed deposit from DBS and MayBank given that they offer much higher interest rate per annum for a 12 month placement as compared to the rest of the banks. You will not find any banks except DBS that pays you 1.15% p.a. for a S$20,000 placement.

DBS Fixed Deposit (Recommended)

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

The interests rates were published on 3rd September 2020. The interest rates for the amount tier S$1,000 to S$19,999 and other tenors remain unchanged. The interest rates for 12 months and above tenors are applicable only to rollover placements at the same tenors.

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 1.15% p.a., the interest that you will receive upon maturity is S$115.

DBS Fixed Deposit Interest Rates 3 September 2020

MayBank iSAVvy Time Deposit (2nd Best)

Interest Rate: Refer below, Minimum Placement: S$5,000, Promotion Valid Until: Not stated

Here are the interest rates for MayBank iSAVvy Time Deposit as of 8th September 2020.

Maybank iSAVvy Time Deposit 8 Sep 2020

For a 6 months placement of S$5,000 at 0.55% p.a., the interest that you will receive upon maturity is S$13.75.

For a 12 months placement of S$25,000 at 0.85% p.a. and 24 moths at 1.20% p.a., the interest that you will receive upon maturity is S$212.50 and $603.60 respectively.

Hong Leong Finance Deposit Promotion

Interest Rate: Up to 0.65%, Minimum Placement: S$20,000, Promotion Valid Until: Not stated

For 12 months placement of S$20,000 at 0.60% p.a., the interest that you will receive upon maturity is S$120.00.

Deposit Amount 12 month (Renewal and Fresh Funds via PayNow) 15 month (Fresh Funds At Branch)
S$20,000 to < S$50,000 0.60% 0.60%
S$50,000 and above 0.65% 0.65%

UOB Time Deposit

Interest Rate: 0.65%, Minimum Placement: S$20,000, Promotion Valid Until: 30th September 2020

The interest rate has fallen from 0.80% p.a. in August to 0.65% p.a. in August.

For 10 months placement of S$20,000 at 0.65% p.a., the interest that you will receive upon maturity is S$108.33.

Minimum Placement (Fresh Funds) Tenor Promotional Rate
S$20,000 10 months 0.65% p.a.

OCBC Time Deposit

Interest Rate: 0.60%, Minimum Placement: S$5,000, Promotion Valid Until: 30th September 2020

OCBC has reduced their fixed deposit rate from 0.70% p.a. in August to 0.60% p.a. in September.

Minimum Placement (Fresh Funds) Tenor Promotional Rate
S$5,000 12 months 0.60% p.a.

For 12 months placement of S$5,000 at 0.60% p.a., the interest that you will receive upon maturity is S$30.00.

CIMB Fixed Deposit

Interest Rate: Refer below, Minimum Placement: S$5,000, Promotion Valid Until: 30th September 2020

For 12 months placement of S$5,000 at 0.30% p.a., the interest that you will receive upon maturity is S$15.00.

CIMB SG Fixed Deposit Rates August 2020

Standard Chartered Bank Singapore Dollar Time Deposit

Interest Rate: 0.20% to 0.30%, Minimum Placement: S$25,000, Promotion Valid Until: 30th September 2020

For 6 months placement of S$25,000 at 0.50% p.a., the interest that you will receive upon maturity is S$62.50.

If you happen to be a priority banking customer, for 6 months placement of S$25,000 at 0.60% p.a., the interest that you will receive upon maturity is S$75.00.

Minimum Placement Tenure Promotional Rate Priority Banking Preferential Rate
S$25,000 6 months 0.50% p.a. 0.60% p.a.

Frasers Centrepoint Trust Is Acquiring New Malls

Frasers Centrepoint Trust Is Acquiring New Malls

Frasers Centrepoint Trust is acquiring new malls (Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1) to its portfolio. On 3rd September 2020, Frasers Centrepoint Trust (“FCT”) announced the proposed acquisition of the remaining approximately 63.1% of the total issued share capital of Asia Retail Fund Limited (“ARF”) for approximately S$1,057.4 million from a wholly-owned subsidiary of Frasers Property Limited, the sponsor of FCT.

Acquisitions

Frasers Centrepoint Trust New Malls

Currently, there are 7 malls under Frasers Centrepoint Trust. They are Causeway Point, Northpoint City, Waterway Point, Changi City Point, Yew Tee Point, Anchorpoint and Bedok Point. After the acquisition, the number of malls will be increased to 11. The additional malls are Tiong Bahru Plaza, White Sands, Hougang Mall, Century Square and Tampines 1. There is also one office property Central Plaza that will be part of the acquisition.

Divestments

This is good news for existing Frasers Centrepoint Trust holders. The manager is seeking to divest Bedok Point for a sale price of S$108.0 million. In my opinion, with strong competition from Bedok Mall (belongs to CapitaLand Mall Trust), Bedok Point has significantly under performed.

Prior to FCT’s proposed ARF Acquisition, ARF will be divesting Mallco Pte. Ltd., a wholly-owned subsidiary of ARF which holds Setapak Central, a retail mall in Malaysia, for a sale price of approximately S$39.7 million, to a wholly-owned subsidiary of the Sponsor. Hence, the Enlarged Retail Portfolio will not include Setapak Central.

Current Dividend Yield

Frasers Centrepoint Trust has paid out a total of 12.07 cents in 2019. Based on the current share price of S$2.64, this translates to a current dividend yield of 4.57%. This is before the COVID-19 pandemic.

The estimated dividend yield for 2020 can be lower given most retail REITs are impacted by this pandemic. This can be seen from the 2Q2020 financial results in April whereby the dividend was slashed by 48.7%.

Frasers Centrepoint Trust Share Price 4 Sep 2020

2Q2020 Financial Results

2Q2020
(S$’000)
2Q2019
(S$’000)
YoY(%)
Gross Revenue 50,168 49,733 0.9%
Net Property Income 35,964 36,444 (1.3%)
Distributable Amount (Before Capital Retention) 36,002 28,808 25.0%
Distributable Amount (After Capital Retention) 18,000 29,158 (38.3%)
Distribution Per Unit (“DPU”) (cents) 1.610 31.37 (48.7%)