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There are some things a “good adult” should avoid, like falling asleep at night without brushing your teeth, being late for job interviews and of course, letting your cash sit in the bank, only to let it get eroded by inflation thanks to rock-bottom interest rates.
In all fairness, at times, that last transgression really can’t be helped. Sometimes you’re just not able to invest your cash. Perhaps you need to keep it liquid as you plan to spend it on something in the near future, or else the market is too turbulent to be able to invest without getting a heart attack.
In such situations, time deposits, also known as fixed deposits, are actually the perfect solution. These fuss-free products let you earn a higher interest rate on your cash for a fixed amount of time. When the time is up, you’re once again free to spend your money — which has grown due to the interest earned on it.
So, what are the advantages of time deposits and where can you find good rates? Read on to find out.
Benefits of time deposits / fixed deposits
A time deposit is an investment instrument that offers a fixed interest rate on a lump sum of cash for a fixed period of time. In other words, you agree to put your money in the time deposit for X amount of time, and in return you will be paid Y% interest.
Here are some of the benefits of time deposits:
- Low risk – Time deposits are considered a very low risk investment, which makes them suitable if you’re looking to balance risk elsewhere in your portfolio.
- Simple and predictable – As an investment, time deposits are as idiot-proof as it gets. Your money earns interest at a fixed rate for a fixed amount of time. There’s no need to jump through hoops in order to earn bonus interest, as is usually the case for high interest savings accounts.
- Usually fee-free – Most of the time, there are no commissions or administrative fees involved.
- Offers higher interest rates than bank accounts – Instead of letting your cash languish in your bank account, put it in a time deposit in order to get better interest rates.
Time deposits’ sheer simplicity and ease of use make them ideal for any cash that you can’t invest, whether because you need to use it soon or due to unfavourable market conditions.
The magic of time deposits is that they’re highly straightforward and predictable. Unlike Tinder dates, what you see is what you get. Let’s say you have saved up to buy a car 6 months from now. You can put your savings in a time deposit for exactly 6 months, knowing exactly how much interest you’ll have earned when you cash out.
In addition, the world seems to be going nuts these days, and financial markets are responding like a hormonal teenager. If buying stocks in such turbulence feels like jumping into shark-infested waters, you can always put your cash in a time deposit to ensure it still grows, until things calm down a bit.
BOC might just have the best time deposit rates in town
Not all fixed deposits are made equal. Different banks offer different interest rates, so you should of course go for the one offering the highest.
BOC deserves to be mentioned here because, compared to other banks, they’re offering some pretty sweet promotional rates at the moment, as follows:
BOC Time Deposit Rates
|Amount (SGD)||Tenor||Interest Rates (% p.a.)||Interest Rates (%p.a.)
|S$5,000 and above||3 months||0.45||0.45|
Rates as of 20 April 2022. Source
*Personal banking customers are required to log into BOC’s Mobile Banking to participate in this promotional rate.
Pretty good, right? Let’s now compare BOC’s 12-month fixed deposit promotional rate with what some other banks are offering for the same tenure.
BOC vs Other Banks 12-month Time Deposit Rates
|Bank||Deposit Amount||12-month Fixed Deposit Rate|
|Bank of China||S$5,000 and above||1.10% p.a.|
|CIMB||Min. S$10,000||0.85% p.a. (personal banking, online promo)
0.90% p.a. (preferred banking, online promo)
|HL Bank||Min. S$50,000||0.80% (New-to-Bank Customers)
0.70% (Existing Customers)
Max. S$1 million
|0.90% p.a. (promo)|
|OCBC||Min. S$20,000||0.55% p.a. (promo)|
|RHB||Min. S$20,000||0.95% p.a.
1.00% p.a. (RHB Premier Clients)
Rates as of 20 April 2022
Bank of China vs Other Banks 24-month Time Deposit Rates
|Bank||Deposit Amount||24-month Fixed Deposit Rate|
|Bank of China||S$5,000 and above||1.30% p.a.|
|CIMB||S$1,000 to S$99,999
S$100,000 and above
|0.30% p.a. (board rates)
0.35% p.a. (board rates)
|HL Bank||Min. S$50,000||1.00% (New-to-Bank Customers)
0.90% (Existing Customers)
Max. S$1 million
|1.25% p.a. (promo)|
|OCBC||Min. S$20,000||1.28% p.a. (promo)|
|RHB||S$20,000 to S$200,000
S$200,000 and above
Rates as of 20 April 2022
You don’t even need to leave your house to sign up and claim your cash rewards. Just download the BOC Mobile Banking app, apply for an account online, add funds and then transfer it to your time deposit.
In these volatile times, time deposits offer a low-risk way to earn a better interest rate on your idle cash. BOC is offering some of the most attractive fixed deposit rates right now, so don’t hesitate to find out more so you can put your money to work right away.
Deposit Insurance Scheme: Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured. Please visit www.sdic.org.sg for full details.