Interest rates are going down
The short-term interest rates are coming down…banks fixed deposits, Tbills, SSBs are coming down. Currently today is near the end of January 2023, likely banks will announce new fixed deposits rate soon. Quite likely it will be same or slightly lower for a while.
Of course, you if are a saver, most likely you would like to put your money in the safest options that you can ever find in the current market. For many, this would mean the three local banks – DBS, UOB, OCBC or Treasury Bills/Singapore Saving Bonds by MAS.
Please take note of the 75k SDIC insurance that we have. Spread your risks across different banks. For those who are unsure how this SDIC insurance works, do read here.
In the event a Deposit Insurance (DI) Scheme member bank or finance company fails, all of your insured deposits with that member are aggregated and insured up to S$75,000 by the Singapore Deposit Insurance Corporation Limited (SDIC). Insured deposits held in trust and client accounts held by non-bank depositors are insured up to S$75,000 per account.
In short, your deposits are insured up to S$75,000 per bank/finance company. If you hold a joint account with your spouse, your deposits are insured up to S$150,000 in total (S$75,000 each, assuming each of you don’t hold other deposits with the same bank/finance company).
Money in your Personal Account with Bank A: $20k.
Money in your Joint account with Spouse with Bank A: $120k.
Amount not insured by SDIC under your name = ($20K + $120K/2) – $75K = $5K
Amount insured by SDIC under your name = $75K (since max is $75K)
Amount insured by SDIC under your spouse’s name = $120K/2 = $60K
Keep things short, for savers, these are few options which you can consider now.
DBS Fixed Deposit 5 Months Promotion
I have received a notification about this promotion with DBS Fixed Deposit when I logged in to my internet banking few days ago:
3.9% p.a. 5 months fixed deposit promotion for a minimum of $20,000 placed.
Promo code: SR5A.
However, this might be for targeted customers of DBS only. Whatever the case is, no harm to try if you are keen? Simply login to your internet banking and submit to apply for it!
Personally, I have quickly applied in case the promotion code run out!
OCBC 4.08% Fixed Deposit Promotion
8 Month Fixed Deposit at 4.08% for OCBC 360 Customers. Don’t miss it! The caveat is you will need to have OCBC 360 accounts in the first place.
CIMB Fixed Deposits
With 10k minimum, the rate is 3.95% for 6 months, 4.05% for 9 months and 4.15% for 12/18 Months.
For those who think that the interest rate will starts to go down from here, it would be good for you to lock some funds (remember SDIC insurance is 75k) for the 12/18 Months.
This promotion is only until 31 January 2023 (today and tomorrow!).
My guess is the rate will drip from 1 Feb 2023 onwards, do consider locking up some funds that you may be planning to use in 6/12/18 months from now.
While stock last!
There are some savers who don’t like to lock up their funds but still like to get high interest rate. Options for this kind of accounts would be using Money Market Funds. There are many companies that offer this – MoneyOwl WiseSaver, FSM Autosweep, Poems Money Market Funds, Tigers’ Broker Cash Plus, Moomoo Cash Plus etc.
Of course, Singapore Saving Bond is another option, but the current 10 years rate is 2.97% and need 1 month to take out. For those who want to lock up their money for longer term with 1 month liquidity, this is a very good option. Personally, I have put in my emergency funds into Singapore Saving Bonds and built a bond ladder using these.
Personally, for Money Market Funds which give high interest rate with few days liquidity, I have Trust Issue and prefer local companies to hold my funds that I indicate to allocate under “Fixed Income”. Hence, I am only using MoneyOwl WiseSaver, FSM Autosweep and Poems Money Market Funds. Out of these three, I would recommend using MoneyOwl WiseSaver for higher rate of around 4% for savers who like high interest and high liquidity.
For regular DIY investor, I would recommend FSM Autosweep as we can use it to buy equities anytime.
MoneyOwl Wisesaver is investing in Fullerton SGD Cash Fund – Class A (SGD) which invested mainly in SGD Fixed Deposit and backed by Temasek. MoneyOwl itself is under NTUC income. It is as safe as you can get!
The latest rate is around 4.01%. This is liquid and you can take out anytime.
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To earn the first free $20, simply sign up for WiseSaver which the underlying fund is Fullerton Cash Fund – invested in rolling SGD Fixed Deposit and backed by Temasek. Then put in minimum $10 via FAST transfer to fund this account to earn full liquid ~4% yield. Since free money and risk free, why not?
For those with idling funds and would like to get higher returns, please consider the options above to make your funds work harder.
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