Fixed deposit rates rise as banks and financial firms jostle for market share
SINGAPORE – Term deposit interest rates are rising and are now at the same level, if not higher, than before Covid-19 in an increasingly competitive market for lenders.
UOB and Hong Leong Finance are the latest to raise rates.
UOB is increasing promotional rates for its fixed Singapore dollar deposits from Thursday with a minimum investment of $20,000.
The rate for the 10-month term will be increased by 0.8 percentage points to 2.4% while the 12-month term remains at the current promotional rate of 2.6% per annum. Ms Jacquelyn Tan, head of group personal financial services at UOB, said the bank had seen a 16% increase in its term deposit portfolio for the first seven months of this year.
Hong Leong Finance also announced a special fixed deposit promotion for the Mid-Autumn Festival, but customers need to deposit the money with the finance company for 15 months.
Balances of $10,000 to less than $50,000 earn 2.4%, while those of $50,000 to less than $200,000 earn 2.43%. Balances over $200,000 get 2.45%.
Meanwhile, on the OCBC website, there are fixed deposits with terms of 12 and 24 months.
The promotional rate for a minimum investment of $5,000 is 2% for a term of 12 months and 2.3% for 24 months.
DBS does not offer promotional rates, but it increased its general fixed deposit rates – called tip rates – in June and updates them regularly.
The fixed deposit rates for balances between $1,000 and $19,999 are 0.15% for a three-month term and 0.85% for an eight-month term as of August 31.
Ms Huong Tran, head of consumer deposits and transactional payments at DBS, said the bank had stopped accepting fixed deposits with maturities beyond eight months due to the uncertainty of longer maturities.
On the other hand, a shorter duration allows the bank to adjust its rates more easily according to the evolution of the interest rate environment.
DBS is the only bank in Singapore to raise its repo rates, unlike other lenders, who offer promotional rates.