Singapore Best Fixed Deposit Rates [Nov 2024]: Maximise Your Savings

As we venture into 2024, savvy investors are evaluating the best ways to invest money in Singapore for optimal returns and financial security. Among the many options, fixed deposits (FDs), also known as time deposits, have emerged as a significant point of interest. 

Summary:

• The best 12-month fixed deposit rate was 3.20% p.a. offered by DBS/POSB, with a minimum deposit requirement of S$1,000.

• The best 6-month fixed deposit rate was 2.90% p.a. from DBS/POSB & Maybank, requiring a minimum deposit of S$1,000 and S$20,000 respectively.

• The best 3-month fixed deposit rate was 3.00% p.a. from Bank of China, requiring a minimum deposit of S$500.

• Earn 3% – 3.8% p.a. with StashAway Simple™ Cash. Easy application with no minimum or maximum deposits.
  

Fixed deposits are investment vehicles where you deposit money at a predetermined interest rate for a fixed period.

Consequently, the new year has brought about noteworthy changes in FD rates, with banks across Singapore making strategic adjustments in response to the evolving economic condition. This shift presents various fixed deposit options and promotions, making them attractive for those seeking stable returns and looking to optimize their investment portfolios. 

If you're evaluating which bank is best for fixed deposits in Singapore, we provide a detailed comparison of Singapore's leading banks' latest fixed deposit rates.

Best fixed deposit rates in Singapore [Dec 2024]

source: Bank websites as of 1st Dec 2024

In addition to traditional fixed deposits from Banks, investors in Singapore can opt for innovative cash management products like StashAway Simple™ Cash, which offer investors a blend of liquidity, competitive returns, and ease of management.

StashAway Simple™ 

Earn a projected 3.40% p.a. at ultra-low risk with no minimum or maximum deposit amount, no lock-ins, no cap on earnings and low fees. Your cash is liquid—no limits on withdrawals or transfers.

StashAway Simple™ Guaranteed Interest Rates (Dec 2024)

Plan ahead confidently with guaranteed returns of up to 3% p.a. with no fees and no minimum or maximum deposits. 

StashAway Simple™ Plus

Earn 3.8% p.a. YTM on any amount with no lock-ins, no cap on earning, and low fees. Access your cash anytime —no limits on withdrawals or transfers.

Comparison of fixed deposit rates with other low-risk investment options

If you're considering investing in low-risk investments like fixed deposit accounts or cash management portfolios, it's crucial to compare them with other similar options to ensure they align with your financial objectives and risk preferences.

Fixed deposits vs. Singapore Savings Bonds (SSB)

Fixed deposits offer a consistent bank interest rate, making them a reliable option for short to medium-term investments. Typically, these rates are predetermined and remain stable throughout the deposit period.

In contrast, Singapore Savings Bonds provide a secure, government-backed investment opportunity, featuring returns that gradually increase over time. The interest rates for SSBs are typically linked to Singapore's long-term government securities rates and are subject to change with each new issue of the bonds.

The average return over 10 years on the most recent issuance of the Singapore Savings Bonds (SSB) stands at 2.81% or 2.66% (year 1) - 3.01% (year 10), which is slightly lower than the highest 12-month fixed deposit rate available from banks. The interest is paid every 6 months starting from the month of issue.

For the SSB, the minimum investment required is S$500 and the maximum investment amount for SSB is $200,000. In contrast, fixed deposits generally require a higher minimum investment amount of $1,000 to $10,000 and above. 

Which to consider?: Both options present unique advantages — fixed deposits for more consistent returns and SSBs for long-term safety and incremental growth.

Fixed deposit vs. Treasury Bills (T-Bills)

Fixed deposits lock in funds at a guaranteed interest rate of your chosen bank, offering a predictable return. On the other hand, Treasury Bills or T-Bills are short-term government-issued securities sold at a discount and redeemed at par value at maturity.

The earnings from T-Bills depend on market conditions, which can offer higher but less predictable returns than the steady interest from fixed deposits. The fluctuation seen in the yields are undeniably higher but the most recent yields (as of 21 Nov 2024) is at 3.08% for 6-months tenor.

T-Bills are issued on a regular basis, either fortnightly or quarterly, as outlined in the issuance calendar, and investors have the option between two tenures: 6 months or 1 year.

Echoing the Singapore Savings Bonds (SSB), T-Bills also feature a low minimum investment threshold, requiring just $1,000 to start, with subsequent investments in multiples of $1,000, making them accessible to a broad range of investors looking for short-term government-backed securities.

Which to consider?: If you prioritize stability, fixed deposits are preferable, but T-Bills might be a suitable choice if you're open to market fluctuations for potentially higher returns.

Fixed deposit vs. High-yield savings account

Fixed deposits are characterized by higher interest rates compared to traditional savings accounts, making them appealing for those seeking better returns over a specific period without needing immediate access to their funds. 

In contrast, high-yield savings accounts offer lower interest rates but with significantly greater flexibility, including immediate access to funds. These accounts often have tiered interest rates, with the potential to earn more based on fulfilling certain criteria like crediting your salary or spending on linked credit cards.

The effective interest rates can vary, with some of the best offerings with higher interest rates compared to even the best fixed deposits such as the Standard Chartered Bonus Saver that offers 7.68% per annum; UOB One Account that offers 6% per annum; and OCBC 360 Account that offers 7.65%. These rates however, are subject to fulfilling specific criteria and the balance on which the high rate applies. 

The choice between a fixed deposit and a high-yield savings account largely depends on individual financial goals and liquidity needs. Fixed deposits are suitable for investors willing to lock in funds for a predetermined period to earn a guaranteed rate, while high-yield savings accounts are better suited for those seeking more liquidity and the opportunity to earn higher interest rates through active account management.

Which to consider?: Both options serve different purposes in a financial portfolio, with fixed deposits offering a more conservative, set-and-forget approach to earning interest, and high-yield savings accounts requiring more active management but offering the flexibility and potential for higher returns.

Fixed deposit vs. Foreign currency fixed deposit 

In Singapore, while SGD fixed deposits offer stable returns, foreign currency fixed deposits, such as those in USD, can yield higher returns due to global interest rate trends. However, they come with the risk of currency fluctuations. For Dec 2024, the best 12-month USD fixed deposit was 4.05% p.a. offered by ICBC and Bank of China, with a minimum deposit requirement of US$500 and US$2,000 respectively.  

Yet, it's important to note that these foreign currency deposits are not covered by the Singapore Deposit Insurance Scheme, adding a layer of risk due to potential currency value changes and the absence of deposit insurance

Which to consider?: SGD fixed deposits might be a safer bet for conservative investors, while foreign currency deposits appeal to those seeking potentially higher gains with an understanding of forex risks.

Fixed deposit vs. Cash Management Accounts

In Singapore, cash management accounts like StashAway is gaining popularity as alternatives to traditional banking options. They provide an avenue for higher returns by investing in money market and bond funds.

These accounts, offering up to 3% p.a. on SGD and up to 4.7% p.a. on USD funds, stand out for their liquidity and the ability to withdraw funds swiftly. However, they lack the capital guarantee and SDIC insurance that fixed deposits benefit from, presenting a trade-off between higher flexibility and increased risk.

Which to consider?: SGD fixed deposits offer a secure option for those preferring stability, while cash management accounts cater to investors looking for flexibility and potentially higher returns, albeit without the capital guarantee and SDIC insurance.

Factors to consider: Choosing the right fixed deposit account in Singapore

When selecting the best bank in Singapore to open your fixed deposit account, you should consider several key factors to ensure your investment aligns with your financial goals and circumstances. 

Here are the crucial aspects to consider:

• Interest Rates: The primary appeal of a fixed deposit account is the interest rate offered. Higher rates translate to better earnings but often come with specific conditions or longer tenures.
• Tenures: Fixed deposit accounts vary in tenure length, ranging from a few months to several years. Your choice should reflect your liquidity needs and investment horizon.
• Minimum Requirements: Banks often set a minimum deposit amount for opening a fixed deposit account. Ensure that the required amount aligns with your investment capacity.
• Bank Interest Promotions: Look out for promotional offers that banks occasionally provide, including higher interest rates than usual or additional perks like cashback or bonus interest for maintaining the deposit for a certain period.
• Other Terms and Conditions: Pay close attention to the fine print. Some accounts may require the deposit to be fresh funds not previously held with the bank or may have penalties for early withdrawal. Understanding these terms is crucial to avoid any unforeseen drawbacks.

Considering these factors, you can partner with the best bank to save money while effectively maximizing your funds.

The Alternative: StashAway’s Simple™ Guaranteed

Traditional fixed deposit accounts may have been the staple in the banking sector but the rise in alternative investment options has given investors a broader spectrum of choices, catering to diverse risk appetites and financial goals. This shift not only reflects the evolving financial landscape but also underscores the growing demand for more flexible and potentially higher-yielding instruments, like StashAway’s Simple™ Guaranteed.

For instance, banks like CIMB, DBS, and HSBC also present various fixed deposit options, with interest rates ranging from 2.40% to 3.20% for tenures spanning 3 to 12 months, each with varying minimum deposit requirements.

In comparison, Simple™ Guaranteed, while offering a competitive 3% p.a. rate. Moreover, it does not impose any minimum or maximum deposit limits, providing unparalleled flexibility. 

Secure Your Financial Future with Smart Choices

Navigating Singapore's investment scene brings you to the reliable shores of fixed deposits, suitable for various financial goals and risk appetites. As you consider your options, exploring innovative solutions like StashAway Simple Guaranteed can be a wise addition to your portfolio, offering flexibility and competitive returns. Take this opportunity to enhance your financial journey with informed choices.