Wow ...... Fixed deposit rate is up again

Above image is extracted from https://blog.seedly.sg/best-fixed-deposit-rate-singapore/

Fixed deposit

There are so many people talking about placing their funds inside fixed deposit because the interest rate is at a all time high over past 25 years.

However, do you understand the difference between DBS 3.2% interest rate for 12 months VS Standard Chartered 3.55% interest rate for 6 months?

Let's calculate in dollar value

If you place $25000 SGD in both banks base on their terms

DBS @ 3.2% pa will provide you a $800 return

SCB @ 3.55% pa for 6 months will provide you $443.75

The conclusion here is that , if you are basing on interest rate , DBS seems to lose out to SCB. However, when you calculate in dollar value, DBS is actually the winner.

Lessons to learn here

1. Take note on the tenure of the product instead of focusing too much into the interest return only

2. Do not cancel FD pre maturely and move to another FD just because the rate grows higher .

3. If you have a goal beyond 12 months to 24 months , FD may not be the only product you should be focusing on

4. Despite knowing the FD interest is at the all time high over past 25 years , the return as calculated may not be high and worth the wait.

5. Think about it , what banks can do with your money when they can guarantee you 3-4% pa returns , can you do the same or similar ?

Let's have a good financial year 2023.