Fixed deposit interest rates at two Singapore banks and several foreign lenders have dipped since the start of 2023. (Photo: iStock)
Fixed deposit interest rates at two Singapore banks and several foreign lenders have dipped since the start of 2023. (Photo: iStock)
SINGAPORE: Fixed deposit interest rates in Singapore have dipped in recent months, down from highs of about 4 per cent at the start of the year.
The lower interest rates at Singapore banks and foreign lenders come amid an uncertain economic outlook.
As of Friday (Apr 21), OCBC was offering an interest rate of 3.4 per cent per annum on six-month fixed deposits. There is a minimum placement sum of S$5,000 (US$3,747).
This was down from the 4.08 per cent offered at the start of the year for customers of the bank's flagship 360 savings account, for a minimum placement of S$20,000 over eight months. Non-360 customers got a rate of 3.88 per cent.
"We regularly review our time deposit promotional rates, aligning them with the competitive landscape and market conditions to offer customers competitive interest rates to meet their savings and wealth accumulation needs," OCBC's head of wealth management Tan Siew Lee said on Friday in response to a CNA query.
Ms Tan added that consumers are continuing to seek "safe havens that can offer them reasonable yield even as the market remains volatile".
As of Friday, UOB was offering an interest rate of 3.55 per cent per annum for six-month and 10-month fixed deposits of S$10,000 and above.
At the start of the year, the bank offered the same rate for six-month, 10-month and 12-month deposits of between S$10,000 and S$49,000.
It also offered rates of 3.85 per cent for amounts between S$50,000 and S$999,999, and 3.95 per cent for deposits of S$1 million or more, for all three tenors.
Fixed deposit interest rates at DBS have remained unchanged since December last year, with the bank's highest offered rate on Friday being 3.2 per cent per annum for 12-month deposits of between S$1,000 and S$19,999.
Singapore's largest bank has refrained from offering promotional interest rates, although it opted to raise its board rates or general fixed deposit rates three times in 2022.
"DBS continues to offer market-competitive fixed deposit board rates, which enable our customers to enjoy the tailwinds that have come through higher interest rates," a spokesperson for the bank told CNA.
"The current board rate was revised in December 2022. Fixed deposits that are pegged to our board rates have no minimum placement requirements and customers can continue to roll over or renew their funds at competitive rates.
"We continue to see a steady demand of our fixed deposits among customers who are seeking high-yield, low-risk savings products."
Some foreign banks have also lowered their fixed deposit interest rates.
"Given the recent market movements, we saw time deposit rates, especially those with longer tenors, to have fallen slightly compared to two months ago," an HSBC spokesperson said, adding that there was still a strong take-up of time deposit offers.
For a minimum fixed deposit of S$30,000, HSBC was offering a rate of 3.75 per cent per annum for three-month deposits. It was also offering 3.55 per cent per annum for seven-month deposits and 3.1 per cent for 12-month deposits.
A spokesperson for Hong Leong Finance said that rates for fixed deposits have generally dropped slightly in the past two months, although its rates "remain competitive in line with the industry's current rates".
"SORA (Singapore Overnight Rate Average) rates remain relatively high and inflationary risk will take time to ease. At the back of an uncertain economic outlook, rates are likely to soften later in the year," the spokesperson added.
It was offering a rate of 3.5 per cent per annum for 10-month fixed deposits of more than S$50,000.
In January, Malaysian bank CIMB offered interest rates of 4.15 per cent per annum for 12-month and 18-month fixed deposits and 4.05 per cent for nine-month deposits.
As of Friday, the interest rate for personal banking customers was 3.45 per cent per annum for a minimum six-month deposit of at least S$10,000.
Over the past two months at Maybank, some fixed deposit interest rates have dipped while others have remained steady.
It is offering 3.9 per cent per annum for 12-month fixed deposits and 3.6 per cent per annum for 18-month fixed deposits. These were the same rates offered for the same tenors in March.
Rates for 15-month and 24-month fixed deposits have decreased since March, from 3.8 per cent to 3.75 per cent for the former, and from 3.3 per cent to 3 per cent for the latter.
Customers have to put in a minimum of S$20,000 and open a Maybank bank account with a deposit of at least S$2,000 for the 12-month rate.
A Maybank spokesperson highlighted the impact of US Federal Reserve interest rate hikes on interest rates in Singapore.
"Since (the second quarter of 2022), the US Fed has hiked interest rates from 0 per cent to 0.25 per cent, to the current 4.75 per cent to 5 per cent range to manage growing inflation," the spokesperson said.
"As Singapore dollar interest rates have a positive correlation to the US dollar, we can expect that if inflationary pressures recede, interest rates should soften, or even be lowered, even if there is a recession risk."
In its last announcement in late March, the Fed raised interest rates by 25 basis points – its ninth straight hike.