I went to DBS Bank yesterday and wanted to place some money into their Singapore dollar fixed deposits (or time deposits). At the back of my mind, I thought the interest rate will be in the region of about 0.4% for I year tenor. I wrote a blog on 29 September on fixed deposits (FDs).
Since the middle of this month, DBS had revised the interest rates for savings accounts and fixed deposits but still it came as a shock that it offers very low interest rates for deposits.
POSB Savings accounts
For amount up to $350,000, interest rate is 0.05% p.a.
DBS Autosave accounts
For amount up to $100,000, interest rate is 0.05% p.a.
For next $250,000, interest rate is 0.15% p.a.
For amount up to $999,999:
on 12 months tenor, interest rate is 0.075% p.a.
on 18 months tenor, interest rate is 0.100% p.a.
on 24 months tenor, interest rate is 0.125% p.a.
(Note: when I wrote my earlier blog, interest rate for 12 months tenor was 0.35% p.a. and for 18 months tenor, it was 0.60% p.a.)
The interest rates had gone south and the bank is “telling us” that they “do not” want depositors’ money. With the deposits taken in, the bank has to ensure they can deploy them for higher returns (such as giving out loans) than the interest rates they are paying out to depositors. This is getting harder in this economic climate.
You can compare interest rates offered by other local banks and they are offering better interest rates than DBS.
Copyright © 2011, limkimtong for Living Investment
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