It is the new year and one of your new year resolutions is to save more money.
What better than putting money in the bank…right ? We already know that the bank saving interest rates have been low for a while now so the next best alternative is…. fixed deposits ? or Fixed D for short.
Finding the best bang for your buck in fixed D will depend on :
1) how long you can let the money roll, typically in periods of 6 months
2) the principal amount
3) promotions from banks / financial institutions
4) prevailing interest rates
Check out this website for a feel of the going interest rate.
The current market is about 1.1% for 12 months at the top range so if you are getting this rate you can give yourself a pat on the back.
This rate is from CIMB and they are pretty aggressive since they are relatively new in Singapore so they are probably trying to attract more deposits here. So far Hong Leong Finance is the other one which is pretty on par with CIMB while the rest do not really come close.
Why I do not put my money into fixed deposit
Fixed Deposit would be the default choice of investment if for the non-financially savvy back in the 1990s since rates were at high of 9 to 10% back then but it has fallen from grace after the turn of the millennium and now it is not even enough to beat inflation.
Even putting your money in CPF would give you better returns ( 2.5% ), provided you are ok not seeing it till you retire or migrate. The are plenty of ways to get a better a return as compared to fixed deposits which I will write about in a later post.