Dear readers, I believe by now, you would have read that UOB has cut its interest rates on its flagship account.
Specifically, UOB One customers with account balances of up to $100,000 + a credit of a monthly salary of at least $1,600 +a spend in the same month of a minimum of $500 on eligible debit and credit cards, will earn:
a) from now to Apr 30, 2024: interest rate of between 3.85 % and 7.8% per annum
b) with effect from 1 May 2024: interest rate of between 3% and 4.5 % per annum
The move, according to what I read from the news was to align with the expectations of the longer-term interest rates.
I am not surprised by the move as I believe the period where interest rates are higher than usual is almost over. What is certain is that interest rates going forward will be volatile and my take is that rates will reduced over the longer term.
So, what is next for savers are to secure decently good interest rates for as long a period as possible. In this regard, I favour the Singapore Savings Bonds which still offers an average 10-year annual interest rate of 3.04% per annum for the May 24 tranche.
And next, savers should refocus on the equities markets, which I believe have been neglected after focus has been shifted to fixed deposits, Singapore Savings Bonds and Treasury Bills in recent years when interest rates are attractive. Make the best use of the opportunities when the stocks markets correct.