Banks raise fixed deposit rates as demand rises for safe yields

SINGAPORE: Thinking of putting money in a fixed deposit? Good news – as interest rates for loans and savings accounts rise, so do fixed deposit rates.

Several banks in Singapore have launched promotions, with rates this month of up to 2.6% for a 12-month fixed deposit and 2.7% for 24 months.

Most lenders require minimum investments of S$20,000 for these promotional rates.

A fixed deposit, otherwise known as a term or term deposit, earns a guaranteed amount of interest for a lump sum of money deposited with a bank over a specified period of time. Unlike ordinary savings accounts, customers cannot withdraw this money until the end of the so-called “lock-in” period.

UOB has been among the most aggressive banks, adjusting its fixed deposit promotions monthly and offering one of the highest rates on a variety of term options to date.

For September, the promotional rate for a 10-month fixed deposit is 2.4%, compared to 1.6% last month. The 12-month rate is 2.6%, likely the highest in the city since Monday (Sept. 5), when CNA ran a check at various banks.

Jacquelyn Tan, Head of Personal Financial Services at UOB Group, said: “In the current uncertain market environment, we have seen more and more clients seek safe havens to protect their wealth.”

Another local bank, OCBC, is offering 2.3% for 12-month fixed deposits, according to its latest promotional rate released over the weekend.

Changes to its promotions are made “in accordance with market conditions”, said the bank’s deposit manager Na Kok Peng. “We will continue to monitor the landscape and ensure that our interest rates remain competitive.”

Among foreign lenders, RHB raised its promotional rate for a 24-month fixed deposit to 2.7% pa from 2.3%. Its 12-month promotion is 2.45%, while a six-month deposit with interest rates of 1.8% is also available for those who prefer a shorter term.

Maybank also this month rolled out new promotional rates for longer fixed deposit terms – 2.35% per annum for 18 months and 2.4% per annum for 24 months. These are in addition to the existing promotional rates of 2.2% and 2.3% for 12 months and 15 months, respectively.

Such a variety caters to different customer preferences and needs, said a spokesperson who added that Maybank pays interest in advance on the business day following placement of fixed deposits.

“We have received a very positive response for our various fixed deposit promotional campaigns,” she told CNA.

Standard Chartered Bank is also running a promotion this month, which offers 1.8% for a minimum of S$25,000 over 12 months.

The bank also offers a “sustainable” fixed deposit option, described as allowing customers to link their capital to the bank’s sustainable loans and projects. This is also currently happening at a promotional rate of 1.8% for a 12 month term.

A spokesperson said the sustainable term deposit had been “well received” since its launch in December 2020, with demand mainly from clients who “want to invest their money in a targeted investment to address long-term environmental challenges”. .

DBS, Singapore’s largest bank, is the only bank that hasn’t jumped on the promotion bandwagon so far, but it told CNA that it remains the only bank to have raised council rates. administration or general fixed deposit rates.

“Our Singapore dollar term deposits are particularly popular with smaller retail depositors, and our key rates remain competitive after the recent June increase, the first among local banks,” said Jeremy Soo, head of retail banking. in Singapore.

“Nevertheless, we are continually revising our suite of initiatives and product offerings to help our customers better withstand the inflationary environment in various aspects of their lives.”

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