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Jul 24, 2008

Singapore Bank Savings Vs Singapore Fixed Deposits

Singapore Bank Savings Vs Singapore Fixed Deposits

Singapore bank savings vs Singapore fixed deposits: Which is a better bank deposits deal to park your money and earn interest? Is a Singapore bank savings account a better option or is a Singapore fixed deposits account better?

Understanding Yourself
To answer this question, you need to understand what you want to do with all the spare cash in your wallet or purse. You need to decide what you want to do with the unspent money you receive as salary before you deploy your funds in a bank savings or fixed deposits account.

What is the purpose for this spare sum of money? Is it to

(1) Store it in a safe place
If you just need a place that is safer than under your pillow to store your spare cash, a bank savings account would be ideal because such a bank savings account can accept small sums of money for deposit, and can be withdrawn anytime for use. You still earn daily interest on the amount in your Singapore bank savings before it is withdrawn.

(2) Earn interest
If you want to earn higher Singapore bank savings interest on your Singapore deposits, choose the investment that can offer you the highest interest rates. Depending on the interest rates quoted by the various banks in Singapore, you can choose to park your savings in a Singapore bank savings account or a Singapore fixed deposits account as long as the interest rate appeals to your needs.

(3) Hold it for impending use
If you know the specific length of time when you need to take out your cash for other uses, choose the appropriate Singapore fixed deposits package that fits your requirement. If you do not know the actual date that you need to use this sum of money, than a Singapore bank savings account may be a better option.

Other considerations to think carefully about are listed below.

(1) Set up & maintenance costs
Account opening usually requires a minimum sum for Singapore fixed deposits or Singapore bank savings, although some savings accounts can often be opened with as little as S$1. There may be monthly service and other charges on sums that fall below a certain level for certain banks. Check out the details before you commit to a bank.

(2) Penalty charges
Singapore fixed deposits accounts often carry a penalty charge for premature withdrawal of your principal. This can potentially wipe out the extra interest earned in your Singapore fixed deposits, making the Singapore savings account a better choice as it does not impose any charges for early withdrawal.

(3) Administrative and other costs
You need to consider the time taken for queues, paper work, transport costs and other opportunity costs when you go down to a bank branch to open or close your savings and deposits account. Once opened, you can link your savings account to a current account, to ATM services and other Internet banking transactions to save you from more such hassles.

Recommendation
All things being equal, in practice, we would recommend that you credit your salary directly into a Singapore bank savings account immediately on payday. Any extra sources of income, dividends, payouts and money from elsewhere should be credited into a bank savings account. This way, you will effectively start to earn more interest and earn more money while you deliberate on your next move.

Conclusion
In conclusion, whether a Singapore bank savings account is better or a Singapore fixed deposits account is better depends on numerous factors, which we have already elucidated in this Singapore Bank Savings Vs Singapore Fixed Deposits article. All you need to do now is to look at your own circumstances and examine your own objectives. Only then can you decide for yourself if a Singapore bank savings, a Singapore fixed deposits or maybe both is / are suitable for your banking needs.

By Singapore Savings Account Rates blog


We recommend these posts in Sg Savings Account Rates blog:

1. Latest Singapore Un-fixed Deposits Rates
2. Best Bank Savings Interest Rates

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