Best fixed deposits in Singapore

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Fixed Deposit

If you’re looking for a low-risk way to invest your cash that still earns competitive rates of interest on your balance, a fixed deposit is worth considering.

Use this guide to learn everything you need to know about how fixed deposits work.

What is a fixed deposit account?

A fixed deposit (also called a time deposit) is a type of savings account that allows you to earn higher interest with little-to-no risk. Unlike regular savings account, a fixed deposit account is only opened for a certain period of time, which can be as short as 1 month to over 3 years — with 3, 6, 9 and 12 month being the most common tenure choice.

During this period, your deposited funds is locked and you won’t be able to access it. Upon maturity, you’ll get back your initial funds, plus interest accrued at the rate contracted when you opened the account. If you wish to recall the funds before the end of the tenure, you may do so, but your earned interest will be forfeited and may even incur penalty fees.

Compare a range of fixed deposits in Singapore

Disclaimer: Interest rates are applicable for deposits between S$1,000 and S$49,999. Interest rate and initial deposit are shown in Singapore dollars. Please check with the provider for deposits and rates in other amounts and currencies.

Why should I invest in a fixed deposit?

Fixed deposits are widely considered to be a safe, low-risk investment as, unlike savings accounts, they offer a guaranteed return through a fixed interest rate. Because your money is locked away, banks often offer a higher interest rate on some fixed deposits than they do on regular savings accounts.

If you have a chunk of money you know you won’t need for a while, a fixed deposit could be a good option. It removes the temptation to spend the money as you’ll need to pay a fee if you wish to withdraw before the deposit’s term is complete.

Also, fixed deposits are widely accessible investment options since they are fee-free and offered by most banks in Singapore. Many banks also extend eligibility to foreigners and joint account holders with minors as young as 12 years old.

Fixed deposit versus savings account

The main difference between a savings account and a fixed deposit is the ability to access your money. The money in a savings account can be accessed whenever you need it, and there’s no costs for withdrawing or depositing money. Fixed deposits are locked and will charge you if you need to withdraw your money early. So if you want easy access to your money, then a fixed deposit might not be right for you.

Here’s a quick overview of the difference between a fixed deposit account and savings account:

Fixed deposit accountSavings account
TenureFixed. Range from 1 to 36 monthsNone
Interest typeFixed at the rate contracted during account openingVariable
Interest rateTypically from 0.3% to 1.5% p.a.Typically from 0.5% to 4% p.a.
Minimum depositRange from $1,000 to $5,000Range from $0 to $3,000
Maximum depositNo capNo cap
LiquidityLow. May be withdrawn but may result in loss of interest earned and incur penaltiesHigh. Can be withdrawn anytime

Note: Information provided are accurate as of September 2020.

How does fixed deposit interest rates work?

The main appeal of fixed deposits is its guaranteed return at a higher interest interest rate compared to regular savings account. It also carries almost zero risk, making fixed deposit a much safer option than other risker investments.

Bank’s rates for new fixed deposit accounts often fluctuate month-to-month. However, the amount in your fixed deposit will still earn an interest based on its initial rate. This means that if you’re offered a 1% p.a interest when you opened your fixed deposit account, and the rate falls to 0.8% p.a a few months later, the amount in your account will still continue to accrue interest at 1% p.a.

While a fixed interest rate may be a good thing, be aware that if you placed a fixed deposit at a less competitive rate, your money will be locked in at that rate for the entire tenure.

What factors affect fixed deposit interest rates?

Fixed deposit interest rates tend to vary according to the tenure and size of the deposit. In general, longer tenures or a larger deposit size yield better interest rates. However, this may differ from bank to bank, so make sure to always check for the latest offers before deciding.

How are interest rate for fixed deposit calculated?

The calculation for interest earned through fixed deposit is straightforward. To find out how much return you’d get, simply multiply the principal (amount you deposit) by the offered interest rate (% p.a.) by tenure for the deposit (fraction of a year – e.g. 1.5 for 18 months, 1.75 for 21 months).

For example:

DescriptionValue
Interest rate0.9% p.a.
Deposit amount$100,000
Tenure of deposit18 months
Total interest earned$1,350

How to find the best fixed deposit account

Like most financial products, there is no best fixed deposit account. The account that suits your needs and circumstance the best is the one you should choose. But what is best for you, might not be best for someone else. You should look for:

  • A competitive interest rate
  • A term length that suits you
  • A minimum deposit amount you’re comfortable with

Ask these questions when looking for the best fixed deposits for you:

  • What is the interest offered?
  • What happens if I break the term of your deposit?
  • Can I withdraw a portion of the deposit without incurring a penalty?
  • How often will I receive statements?
  • Can you easily check on the balance in my account and how easy is it to manage other features (for example, with a mobile banking app in-line with a digital bank)?
  • What happens to the deposit when it matures? For example, will it automatically roll over into another fixed deposit?

Is a fixed deposit taxable in Singapore?

No, the interest income you receive from deposits with approved banks or licensed finance companies in Singapore is not taxable.

How do I open a fixed deposit account?

To open a fixed deposit account, you’ll need to apply in-person. Once you’ve compared your options, simply head down to the nearest branch of the bank or lending institution. Before that, make sure you meet the bank’s eligibility criteria and have all the relevant documents on hand.

Eligibility criteria

The specific eligibility criteria may vary from bank to bank, but you’d typically need to meet these requirements:

  • Age. You must be at least 18 years of age
  • Residency. Singapore citizen, permanent resident or foreigner.

Required documents

Make sure you bring along the following documents when you apply:

  • Singaporeans and permanent residents. ID and the latest copy of a proof of residence (e.g. local utility bill, local telecommunication bill, local bank statement)
  • Foreigners with valid work permit. Passport, proof of residence and a valid permit (e.g. Student Pass/Dependent Pass/S Pass or Long-Term Visit Pass).
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