What Is a Fixed Deposit?

Let’s break it down: a fixed deposit is when you place a lump sum with a bank for a set period — usually 3, 6, or 12 months, or even longer. In return, you get a guaranteed interest rate. That means you know exactly how much you’ll earn by the time it matures.

Unlike regular savings accounts, where rates can fluctuate, FDs are all about certainty. You lock in your funds, and in exchange, the bank gives you higher interest in a low-risk, no-fuss way. It's especially handy if you have spare cash that you won't be touching for a while.

>> COMPARE: Best Fixed Deposits in Singapore

Here’s a quick look at why FDs are a go-to for many Singaporeans:

• Fixed interest rate: The rate you sign up for stays the same till maturity.

• Fixed tenure: Choose from short-term options like 3 months, or go for longer ones up to a few years.

• Higher returns than savings accounts: Especially true for longer commitments or bigger deposit amounts.

In short, FDs are great if you’re looking for a low-risk way to grow your money without needing frequent access to it.

As mentioned earlier, we’re seeing a noticeable drop in fixed deposit rates in 2025 compared to 2024. Last year, banks like DBS were offering eye-catching rates of up to 3.20% p.a. — but those days are cooling off. Right now, Maybank holds the top spot for 6-month FDs at 2.90% p.a., while both RHB and Maybank are offering 2.70% p.a. for 12-month tenures.

• Economic conditions: With inflation easing and growth slowing, banks are becoming more cautious.

• Monetary policy: The Monetary Authority Singapore (MAS) has kept interest rates steady (or lower) to encourage spending and keep liquidity flowing.

• Bank competition: Banks are adjusting their FD rates to stay in the game without overextending.

• Global uncertainty: With international markets staying volatile, local banks are playing it safe.

• Term and amount matter: You’ll usually get better rates with longer tenures and bigger deposits.

• Short-term promos: Banks may roll out attractive rates — but these often don’t stick around for long.

If you’ve been waiting to lock in a decent return, it might be time to make your move before rates slip further.

Here are three common scenarios where a fixed deposit makes sense:

You’re saving for a future expense. Got a big-ticket goal on the horizon? Whether it’s a home renovation, a wedding, or a car down payment, a fixed deposit is a great way to set aside money you don’t plan to touch in the near future. Instead of leaving it idle in your savings account, you can grow it with a guaranteed return — and avoid the temptation to dip into it early.

You want guaranteed returns. Not everyone loves the rollercoaster ride of the stock market. If you prefer steady, predictable growth, FDs are a solid pick. They come with a fixed interest rate, so you’ll know exactly how much you’ll earn by maturity — no surprises. This can be especially reassuring when markets are volatile or you're risk-averse.

You have idle cash. If you’ve got some spare funds sitting around in a regular savings account earning minimal interest, consider putting them to better use in a fixed deposit. Even short-term FDs often offer significantly higher returns than standard savings accounts. And with some banks offering FDs from as little as S$500, it doesn’t take much to start earning more.

Want to know if a savings account is better for you? Find out below.

>> MORE: Best savings accounts in Singapore

Before locking in your money, it’s worth weighing these four important factors to find the FD that best suits your needs:

Interest rates: Let’s face it — this is what most of us look at first. And with good reason: the higher the interest rate, the more our money grows. Banks regularly adjust their rates based on market conditions, so it pays to shop around. Some banks also run limited-time promos that offer better-than-usual returns — perfect if you’re ready to lock in funds on short notice. Check out current FD rates.

Tenure: In Singapore, fixed deposit terms typically run from 3 to 24 months, with a few stretching up to 36. If you already know when you’ll need the cash, match your FD tenure accordingly. Longer terms usually come with slightly better rates, but remember — you’ll need to leave the money untouched until the end of the term.

Penalties for early withdrawal: Need to access your funds before the FD matures? You’ll likely face penalties, which could mean forfeiting some — or all — of your interest. Some banks are a little more forgiving and may give you partial interest based on how long you kept the money in. Either way, it’s worth checking the fine print before committing.

Deposit amount: Minimum deposits can start as low as S$500, but some banks may require upwards of S$20,000. In some cases, the more you park, the better the rate. Choose an amount that fits your savings goals — without tying up more cash than you're comfortable with.

The best fixed deposit isn’t just about chasing the highest rate — it’s about picking one that works with your timeline, goals, and lifestyle. Keep an eye on new promotions too, especially if you’re planning to reinvest after maturity.

>> Best fixed deposit rates in 2025

Not all Fixed Deposits are created equal. Depending on your savings goals and preferences, there are several types of FDs in Singapore worth knowing about:

Standard fixed deposit: This is a common go-to option — straightforward and easy to understand. You deposit a lump sum for a fixed period (e.g. 6 or 12 months), and earn a guaranteed interest rate. It’s great for short- to mid-term savings goals.

Recurring deposit (RD): Prefer to build up your savings gradually? An RD allows you to deposit a fixed amount each month instead of a lump sum. It’s perfect for those who want a disciplined, automated approach to saving.

Senior citizen fixed deposit: If you're aged 55 and above, some banks may offer preferential rates on Fixed Deposits. These can be especially attractive if you're looking for steady returns during retirement without taking on investment risk.

Promotional fixed deposit: Banks in Singapore often roll out limited-time offers with boosted interest rates to attract new deposits. These promo FDs can be a great way to earn a little extra — but make sure to read the fine print on tenure and withdrawal terms.

Foreign currency fixed deposit: Want to diversify across currencies? These FDs are held in foreign currencies like USD or AUD and may offer higher rates — but they also come with foreign exchange risk. Best suited for experienced savers who can handle currency fluctuations.

Note: Tax-saving fixed deposits are not applicable in Singapore, as individual interest income is not taxed here.

When your fixed deposit matures, you generally have two main options. You can reinvest the funds into a new fixed deposit — either with the same bank or a different one — at the current prevailing interest rates. This can be a smart move if you're looking to continue earning guaranteed returns. Alternatively, you can withdraw the money entirely or transfer it into a savings account if you need more liquidity or have other plans for the funds.

FD laddering is a smart way to grow your savings without locking everything up at once. Instead of putting your entire lump sum into one fixed deposit, you split it across several FDs with different maturity dates — like 6, 12, 18, and 24 months. As each one matures, you can either cash out or roll it into a new long-term FD, depending on your needs and the latest rates. This approach gives you a nice balance of earning stable returns while still having regular access to your money.

The perks? For starters, you optimise your returns by capturing better rates over time, especially if interest rates are on the rise. You also enjoy greater liquidity since some portion of your funds is always nearing maturity. It’s also a handy way to reduce reinvestment and interest rate risk because you’re not tying everything to one term or market condition. And perhaps best of all — it helps you stay on track with your goals by encouraging financial discipline.

>> Learn more about investment strategies for new investors

Not sure whether to go with a fixed deposit or stick with a savings account? Here’s how they stack up in Singapore:

Fixed deposits might offer higher interest, but they aren’t always the best fit — especially if your priorities lean more toward flexibility. Here’s when a savings account might be the smarter choice:

You need access to your funds anytime. Emergencies, surprise expenses, or a sudden splurge? A savings account lets you tap your funds anytime without penalties.

Your income or goals fluctuate. Maybe your pay isn't fixed each month, or you're still figuring out what you're saving for. A savings account keeps things flexible while you adjust — no pressure to commit to fixed terms or deposit amounts.

You’re growing your savings bit by bit. No big lump sum? No problem. Savings accounts are great for building up your funds slowly — whether it’s for a holiday, a new laptop, or just a rainy

>> COMPARE: Best savings accounts in Singapore

Fixed deposits are a reliable way to grow your money with low risk. But as solid as they are, FDs aren’t always the best fit for everyone.

Back to top