Read Also: Complete Guide To Buying Singapore Savings Bonds (SSB) Which Bank Offers The Best Fixed Deposit Interest Rates? Interest Rates: Non-promotional interest rates for fixed deposits are currently relatively low, even compared to virtually risk-free investments like SSB.

This means that if you do need that money urgently before maturity, you’ll receive little or no interest. It is worth noting that the amount lost for pre-maturely redeeming your capital is marginal, compared to what you would lose for surrendering other instruments early like endowment plans. Liquidity: Obviously, you will be giving up liquidity when you place money in a fixed deposit. Read Also: Best Savings Accounts In Singapore – If You Don’t Want To Keep Jumping Through Hoops Disadvantages Of Fixed Deposits In addition, Singapore’s Deposit Insurance Scheme insures up to $75,000 per account for deposits with all full-service banks and financial institutions.

Safe: Singapore banking consumers benefit from a tightly regulated banking eco-system. Also, the maximum deposit cap on fixed deposits is much higher, unlike the SSB, which has an individual limit of $200,000. Unlike instruments like SSB, where you may be allocated less than what you want to invest, especially where the bond is oversubscribed, there is no allocation limit with fixed deposits. Predictable: Fixed deposits can be interesting for investors looking to build a foundation of stable assets that guarantee their principal and returns, so they would be in a better position to make higher-risk, higher-return investments like stocks, properties, peer-to-peer lending, or even cryptocurrencies. Thus, they are useful for sums of money you absolutely cannot afford to lose to the fluctuations of the market, such as money set aside for renovations, education, or a down payment for a car.Īccessible: Fixed deposits can be made with sums of money as little as $500 and with maturity periods of one month to three years. You give your money to the bank, and they return your principal plus interest after the tenure is up. Simplicity: The simplicity of fixed deposits makes them popular among our parents’ generation, since you don’t need any skill, luck, or experience to make money from fixed deposits. Read Also: 6 Investments In Singapore That Provide Guaranteed Principal And Returns Advantages Of Fixed Deposits In this article, we’ll examine whether they still have a role to play for your investment and budgeting needs. Fixed deposits are a way to earn guaranteed returns on your money that are higher than savings accounts while still being virtually risk-free.

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