Dear readers, as a someone who keeps pulse on the fixed deposits scene in Singapore, with so many fixed deposits offerings from many financial institutions, I believe a common question asked by retail saver or investor is this: what annual returns should your fixed deposits be, in order to be decent?
To answer this question, we must take note of this point: the fixed deposit interest and holding period of the fixed deposit should have an inverse correlation.
This means simply that if the fixed deposit interest period is long, then one should expect a lower annual fixed deposit interest.
Banks these days are offering fixed deposit interest rates of at least 3% per annum, with a few offering rates of around 3.2% per annum and these interest rates depend of different factors like holding period and amount of fixed deposit.
I would think a good benchmark for fixed deposit interest rates will be the yield of the Singapore Savings Bonds which has a longer tenure. At around 2.82% per annum for the average 10-year yields for recent tranches, I believe fixed deposits should aim to be above this 2.82% to be considered a decent yield now.
A simple decent yield will be 3% per annum.
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