SINGAPORE: United Overseas Bank (UOB) on Monday (Oct 3) raised its promotional interest rates for Singapore-dollar fixed deposits to as high as 3 per cent per annum for a 15-month duration.
This is up from last month’s promotional rate of 2.8 per cent.
The bank, Singapore’s third-largest lender, is also offering a higher rate of 2.9 per cent for a 12-month fixed deposit, up from 2.6 per cent.
Its 10-month promotion is going at 2.8 per cent, up from 2.4 per cent previously.
Customers will have to put in fresh funds of at least S$20,000 to enjoy the latest promotional rates.
A fixed deposit, otherwise known as a time or term deposit, allows one to earn a guaranteed amount of interest for a lump sum of money deposited with a bank over a specified duration.
Unlike regular savings accounts, customers cannot withdraw this money before the so-called “lock-in” duration is over – or they risk paying a penalty or losing the interest earned.
Banks here have been dangling increasingly juicy deals for fixed deposits in recent months, as central banks around the world hike interest rates.
The latest move by UOB means that the interest rate on 12-month fixed deposits has hit its highest in almost 24 years.
The last time interest rates on 12-month fixed deposits went above 2.9 per cent – UOB’s current promotional rate – was in November 1998, when the rate stood at 3.11 per cent, according to data from the Monetary Authority of Singapore.
That same month, three-month and six-month fixed deposit rates hit 2.95 per cent and 3.05 per cent respectively. The data from MAS does not track rates for 15-month fixed deposits.
For most of the past 20 years, fixed deposit rates in Singapore have been stuck below 1 per cent.