CIMB FastSaver Interest Rates Changes

Piggy Bank

CIMB FastSaver used to be one of the best savings account out there. The reason is simple. There are no multiple conditions to fulfill such as salary credit, investments with CIMB or taking up any loan from the bank. The savings account offers you a high 1% interest rate p.a. for the first S$50,000.

The simplicity and high interest rate is the reason that I opened the CIMB FastSaver account. However, good things are coming to an end. CIMB is revising the interest rates for its FastSaver account with effect from 15th July 2020 onwards.

Below are the revised interest rates.

Account BalancePrevailing Interest Rates (%p.a.)Interest Rates from 15th July 2020 (%p.a.)
First S$50,0001.00%0.50%
Next S$25,0001.50%0.80%
Next S$25,0001.80%1.50%
Above S$100,0000.60%0.40%

Why is CIMB revising interest rates?

The central banks globally have reduced interest rates to prevent further slowdown in economic growth due to the COVID-19 outbreak. In line with the revision of both the Singapore Interbank rates and global interest rates, CIMB are revising the interest/profit rates for their Singapore Dollars (SGD) Accounts.

Are there alternative financial instruments with higher interest rates?

Yes, there are. I have previously wrote about the Singlife Account. Singlife Account is an insurance savings plan that was launched in November 2019. There are no monthly fees, no regular top ups required and no lock in period.

You get 2.5% per annum for the first S$10,000 deposited. This interest rate of 2.5% per annum is not guaranteed and may also change like CIMB FastSaver in the future. The next S$90,000 earns you 1% per annum. Anything above S$100,000 does not earn you any interest.

ReturnsAccount Value
0 %Above S$100,000
1% p.a.Next S$90,000
2.5% p.a.First S$10,000

 

CIMB Fixed Deposit Promotion Makes Your Money Work, Not You!

CIMB Fixed Deposit Promotion Makes Your Money Work, Not You!

I like the way CIMB says “Your money should work, not you!“. Following my previous post on “Fifty Six Percent Invested Forty Four Percent Cash“, I do have some spare cash to place into a fixed deposit or Singapore Savings Bonds. Both are brainless, effortless investments where you sit and wait till maturity to earn the interests.

If you remember, CIMB offers a fixed deposit promotion during Chinese New Year whereby you can get up to 1.90% interest per annum if you do a placement for 12 months online. It seems that this promotion is here to stay as they are offering the same promotion in the month of March.

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 Months6 Months12 Months
Branch Rate1.301.451.55
Online Exclusive Rates1.551.701.90

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 + (0.0155 × 0.25)) = 10038.75
A = $10,038.75

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

A = 10000(1 + (0.0170 × 0.5)) = 10085
A = $10,085.00

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

A = 10000(1 + (0.0190 × 1)) = 10190
A = $10,190.00

CIMB Fixed Deposit Promotion Versus Singapore Savings Bonds

How does this promotion fair against the latest Singapore Savings Bonds?

If we have placed S$10,000 in the April 2019 Singapore Savings Bonds, we will receive S$196 in interest payout after a year. This will be S$6 more than CIMB 12 months fixed deposit promotion. If we deduct away the S$2 application fee for Singapore Savings Bonds application, then it will be S$4 more.

CIMB Fixed Deposit Promotion Makes Your Money Work, Not You!

My Opinion

Both are comparable, risk free investments. If you ask me, I might prefer the Singapore Savings Bonds as there is no lock in period. You can sell off the bonds and there is no penalty should you need the money urgently within the 12 months.

My favorite website, StocksCafe has introduced a new feature to allow adding of Singapore Savings Bonds into your portfolio. If you didn’t know, I signed up as a Friend of StocksCafe as my most favorite feature of StocksCafe is the automated tracking of dividends payout.