Fixed Deposits (FD) vs. Singapore Savings Bonds (SSB): What’s the Difference?

Choosing where to park your savings can feel overwhelming when there are so many options on the table. In Singapore, two of the most popular low-risk choices are fixed deposits (FDs) and Singapore Savings Bonds (SSBs). Both are designed to help you grow your money safely, but they work in slightly different ways. Fixed deposits reward you with predictable, guaranteed interest over a set period, while Singapore Savings Bonds give you the flexibility of cashing out anytime and the chance to earn higher returns the longer you hold them.

If you are wondering which option suits your financial goals best, this guide breaks down how FDs and SSBs work, their pros and cons, and how they compare to other savings and investment products available in Singapore today.

Fixed deposits and SSBs serve distinct purposes for investors. A fixed deposit offers a fixed interest rate over a set period, providing predictable returns, while a savings bond allows investment for up to ten years with increasing interest rates, offering greater flexibility than fixed deposits, along with monthly redemption options.

Although both are considered safe investment options, a savings bond provides more liquidity, whereas fixed deposits offer guaranteed fixed returns. Key attributes, including tenure, interest rate, and redemption terms, vary between the two. Let us guide you through these differences, so you can make a more informed savings decision.

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A fixed deposit (FD) is a savings account offered by banks in which you agree to deposit a lump sum of money for a fixed period, such as six months, one year or three years. The interest rate you earn varies based on the tenure of the deposit and the bank’s promotional offerings, and early withdrawals from a fixed deposit typically incur penalties.

A Singapore Savings Bond (SSB) is a bond issued by the Singapore government. You can invest in Singapore Savings Bonds (SSBs) starting from a minimum of S$500, with increments of S$500, up to a total maximum holding of S$200,000. SSBs feature a step-up interest structure, meaning the interest rates increase the longer you hold the bond. Unlike fixed deposits, Singapore Savings Bonds can be redeemed at any time without incurring penalties.

Note that SSBs are different from Singapore Government Securities (SGS) bonds. These are traditional government securities with maturities ranging from 2 to 50 years, bought through auctions or the secondary market.

A fixed deposit may be suitable in the following situations:

• If you have a lump sum of money you do not need immediately. A fixed deposit is an ideal option when you have a substantial amount of funds that you can afford to set aside for a specific duration. By depositing this lump sum into a fixed deposit, you can earn a predetermined interest rate, allowing your savings to grow steadily over time.

• If you prefer a guaranteed, predictable return. Fixed deposits offer the assurance of guaranteed returns, as the interest rate is fixed for the entire tenure of the deposit. This predictability makes fixed deposits a reliable choice for individuals who prioritise stability and wish to avoid the fluctuations associated with market-linked investments.

• If you are comfortable locking your money for a fixed period. Fixed deposits require you to commit your funds for a predetermined period, during which you cannot access them without incurring penalties. This commitment allows you to earn a higher interest rate compared to regular savings accounts, rewarding you for your long-term savings approach.

Promotional rates from some banks can offer even higher returns than standard fixed deposits, providing an opportunity to maximise your earnings. Common fixed deposit tenures in Singapore range from one month to five years, with interest rates varying based on the tenure and the bank’s existing offerings.

An SSB may be a better fit if:

• You want a flexible investment that allows early withdrawals without penalties. SSBs can be redeemed at any time without incurring penalties. This flexibility makes them an attractive option for investors who prioritise access to their funds while still earning interest.

• You want a government-backed option with low risk. SSBs are issued and fully backed by the Singapore government, providing a high level of security. This makes them a safe haven for investors seeking to preserve capital while earning a steady return, especially in uncertain economic climates.

• You plan to hold for the long term to benefit from step-up interest rates. The step-up interest rate structure of SSBs means that the longer you hold the bond, the higher the interest rate you will receive. This feature incentivises long-term investment and allows your savings to grow progressively over time.

Compared to traditional bonds, Singapore Savings Bonds are designed for individual investors, offering greater accessibility and flexibility. Traditional bonds may require larger investment amounts and may not offer the same ease of redemption.

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Both options provide safety, but the choice depends on whether you prefer fixed returns with some commitment, or flexibility with progressive returns.

Interest rates for both fixed deposits and SSBs are influenced by Singapore’s broader interest rate environment, which in turn is linked to global monetary policy. Since 2022, rising global interest rates have led to more competitive fixed deposit promotions, while SSBs have seen higher step-up yields. As of August 2025, banks in Singapore continue to offer promotional fixed deposit rates exceeding 1.2% per annum for selected tenures, while the latest SSB issuances offer 10-year average returns around 2%.

Fixed deposit rates in Singapore have historically fluctuated with global interest rate cycles. Before 2022, average fixed deposit rates often hovered below 1%. However, with global inflationary pressures and higher benchmark rates, banks have offered rates ranging from 1.2% to 2% for longer tenures in recent years. These promotional rates are a draw for investors who are comfortable locking in their funds.

Cash management accounts

Cash management accounts are offered by fintech platforms and investment brokers, often investing in low-risk instruments such as money market funds. They provide higher returns than regular savings accounts, with daily liquidity. However, returns are not guaranteed.

Insurance companies offer endowment plans that combine savings with protection benefits. They typically run for a fixed number of years and provide guaranteed and non-guaranteed returns. Endowment plans are less liquid than SSBs but may offer additional benefits such as insurance coverage.

» MORE: Fixed deposits vs. Endowment plans vs. Cash management accounts: Which should you choose?

Each option serves different needs. Fixed deposits provide bank-backed certainty, SGS are better for long-term investors, and Treasury bills suit those looking for short-term safe placements. There is no one-size-fits-all answer — the right choice depends on your financial goals, time horizon, and liquidity needs.