Singapore Fixed Deposit Guide: How It Works, Rates, and Risks

A Singapore fixed deposit is a time-bound, low-risk savings product offering predictable returns.

Backed by banks and often insured by the Singapore Deposit Insurance Corporation (SDIC), fixed deposits appeal to both residents and foreigners seeking capital preservation with minimal volatility.

This article covers key points including:

• Which bank is best for fixed deposits in Singapore?
• What is the best fixed deposit rate in Singapore?
• Are fixed deposits worth it in Singapore?
• What are the pros and cons of fixed deposit?
• Can foreigners open fixed deposits in Singapore?
• Are interests from fixed deposits taxable in Singapore?

My contact details are hello@adamfayed.com and WhatsApp +44-7393-450-837 if you have any questions.

The information in this article is for general guidance only. It does not constitute financial, legal, or tax advice, and is not a recommendation or solicitation to invest. Some facts may have changed since the time of writing.

How Does Fixed Deposit Work in SG?

In Singapore, a fixed deposit is a time-bound savings product where you deposit a lump sum with a bank for a fixed period, typically ranging from 1 month to 36 months at a predetermined interest rate.

The concept is simple: you lock in your money, and in return, the bank pays you interest when the term matures.

Key Features of How FDs Work:

• Fixed Tenure: You select a deposit duration (e.g., 6 months, 12 months). The longer the tenure, the higher the interest rate tends to be.
• Fixed Interest Rate: The rate is guaranteed at the time of placement and remains unchanged throughout the term, regardless of market fluctuations.
• Minimum Deposit Requirements: Most banks require a minimum deposit, often ranging from S$500 to S$20,000, depending on the bank and currency.
• Interest Payout: Interest is usually paid at maturity, but some banks offer options for monthly or quarterly payouts for longer terms.
• Premature Withdrawal Penalties: Withdrawing your funds before maturity often results in forfeited or reduced interest.

Where You Can Open FDs in SG:

• Traditional banks (e.g., DBS, UOB, OCBC)
• Foreign banks with local operations (e.g., HSBC, Maybank)
• Digital-only platforms offering promotional rates via online banking

What Is the Best Fixed Deposit in Singapore?

As of mid-2025, the best fixed deposit in Singapore is offered by DBS/POSB, with a 12-month rate of 2.45% p.a. for deposits starting at S$1,000.

 For higher deposit amounts, SBI offers a 6-month FD at 2.00% p.a., while ICBC and CIMB lead short-term options at up to 2.10% p.a. for 3 months.

The best fixed deposit in Singapore combines competitive interest rates, flexible tenure options, and a reputable banking institution.

Major local banks like DBS, OCBC, and UOB, as well as foreign and digital banks such as CIMB, ICBC, and SBI, regularly offer promotional rates especially for new funds.

When evaluating which FD product is “best,” consider:

• Tenure flexibility: Most banks offer fixed deposits from 1 to 24 months. Shorter tenures suit those seeking liquidity, while longer terms typically offer higher returns.
• Minimum deposit requirements: These vary significantly. Some banks accept as little as S$500–1,000, while others require S$20,000 or more especially for premier clients.
• Promotional offers: Time-limited promotions, often for new customers or fresh funds, can provide higher returns. Some promotions are bundled with investment or insurance products.
• SDIC coverage and bank reputation: Ensure your funds are placed with SDIC-insured institutions. The SDIC protects up to S$100,000 per depositor per bank.

Are Fixed Deposits Worth It in Singapore?

Fixed deposits remain a viable option in Singapore for those prioritizing capital preservation and predictable returns especially in times of economic uncertainty.

However, whether they are worth it depends on your financial goals and available alternatives.

What are the advantages of fixed deposit?

• Stable returns: With MAS tightening in recent years, FD rates have risen, making them more attractive than during low-rate periods.
• Low risk: Funds placed in SDIC-insured banks are protected up to a certain amount per depositor, per institution.
• Simplicity: FDs are straightforward; no market volatility, no monitoring required.

What are the disadvantages of a fixed deposit?

• Limited flexibility: Early withdrawal often leads to forfeiture of interest or penalties.
• Opportunity cost: Higher yields may be possible elsewhere with only slightly more risk or complexity.

Comparison with other low-risk instruments:

• Savings accounts: Some high-yield savings accounts offer up to 6.30% with specific conditions (e.g., salary crediting, card spend), potentially beating FD returns if requirements are met.
• Treasury bills (T-bills): MAS-issued T-bills frequently yield more than FDs and are also backed by the government, though they come with auction-based pricing.
• CPF Special and Retirement Accounts: These offer long-term, government-guaranteed returns (up to 4–5%) but lack liquidity and are subject to policy constraints.

Who can use a Fixed Deposit?

• Retirees seeking safe, predictable income without investment risk.
• Short-term savers parking funds for future use (e.g., home purchase, education).
• Conservative investors looking for alternatives to volatile markets.

While not always the highest-yielding choice, fixed deposits serve a practical purpose for capital stability, especially when used strategically alongside other instruments.

Is Fixed Deposit Guaranteed in Singapore?

Yes, fixed deposits in Singapore are generally considered safe and are partially guaranteed, thanks to the SDIC.

Under the SDIC scheme, deposits (including fixed deposits) placed with full banks and finance companies that are members of the scheme are insured.

This protection covers both principal and interest combined, as long as the deposit is denominated in Singapore dollars and placed with an SDIC-insured bank.

Most major banks in Singapore such as DBS, OCBC, UOB, Standard Chartered, and Maybank are members.

The term guaranteed in this context refers to the backing of your deposits by a statutory insurance scheme; not by the bank itself.

If a participating bank fails, SDIC ensures that insured depositors will be reimbursed up to the insured limit, typically within a few days.

However:

• Amounts above S$100,000 are not protected, which means large depositors should diversify across institutions to maintain full coverage.
• Foreign currency deposits and structured deposits may not be fully covered.

In short, while fixed deposits are not risk-free in the absolute sense, they are one of the safest options for Singapore-based savers when kept within the insured threshold.

Is Fixed Deposit Taxable in Singapore?

In Singapore, the tax treatment of fixed deposit interest depends on both the residency status of the account holder and the nature of the account, whether it’s personal or business-related.

For Individual Residents:

• Personal FD interest is tax-exempt: Under Singapore’s current tax regime, interest earned from deposits with approved banks and licensed finance companies is not taxable for individual residents.
• No need to declare: If you’re earning interest from a personal savings or fixed deposit account, you typically do not need to report this income in your annual tax return.

For Non-Residents:

• Generally tax-exempt as well: Interest earned by non-resident individuals from deposits with Singapore banks is also usually exempt from tax, unless it is connected to Singapore-sourced business income.

For Businesses and Corporate Accounts:

• Taxable income: Interest earned through business or corporate fixed deposits is considered taxable income. Companies must include this in their annual tax filings.

Can Foreigners Put Fixed Deposits in Singapore?

Yes, foreigners can open fixed deposit accounts in Singapore, although the process and terms may differ slightly compared to residents.

Eligibility and Documentation Required:

• Most Singapore banks allow non-residents and foreigners to open FD accounts.
• Commonly required documents include:
  • Valid passport
  • Proof of address (local or overseas)
  • In some cases, a valid visa or employment pass if residing in Singapore
  • Tax identification number (TIN) or equivalent may be requested for compliance

Some banks may require in-person verification, especially for those without a local residential address or those opening an account remotely.

Differences in Terms and Rates for Non-Residents:

• While interest rates are generally the same for residents and non-residents, some promotional rates may be restricted to Singapore citizens or PRs.
• Certain banks may require higher minimum deposits from foreigners.
• Non-residents may be excluded from SDIC deposit insurance, depending on account type and location of funds.

Foreign investors should also consider currency exposure and international fund transfer costs when evaluating FD options.

Conclusion

Fixed deposits in Singapore continue to serve as a dependable option for preserving capital with predictable returns.

However, they aren’t one-size-fits-all.

As market conditions shift and financial institutions adjust their offers, staying informed is key.

Comparing tenures, eligibility terms, and promotional rates across multiple banks allows you to make better-informed decisions that align with your savings goals and risk tolerance.

FDs won’t beat inflation over long periods like stocks or ETFs might. It’s also good to look at alternative options.

Pained by financial indecision?

Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.