Fixed Deposits vs Singapore Saving Bonds

Fixed Deposits Vs. Singapore Saving Bonds: Which is Better?

Protected by the semi-official organization and the Singapore government, Fixed Deposits (FDs), and Singapore Savings Bonds (SSBs) are risk-free investments with guarantees of capital and return. As popular investment tools in Singapore, choosing between them can be a challenge.

In this article, we’ll delve into the key features of both FDs and SSBs and explore other comparable alternatives. Keep reading to learn more and make an informed decision!

Fixed Deposits vs. Singapore Savings Bonds

The better option between fixed deposits and Singapore Savings Bonds depends on your individual investment goals, risk tolerance, and liquidity needs. Here’s a quick comparison guide.


Fixed Deposit Singapore Savings Bond


Parking place for cash and earning interest Regular and stable income streams

Interest rates

3% – 4% p.a. (minimum investment criteria met) Step-up interest from 3.01% to 3.21% p.a. & 3.07% p.a. on average

Investment amounts

S$500 minimum, varying from banks S$500 minimum to S$200,000 max. per person


3 – 36 months 10 years
Liquidity Immediately

7-30 days

Risk Low


Tax Exempt from income tax and deductible for CPF investors

Exempt from income tax and deductible for SRS investors

Accessibility High


Additional benefits Capital and interest guaranteed

Capital and coupons interests guaranteed



Fixed deposits are suitable for short-term, stable interest earnings, with early withdrawal flexibility. Singapore Savings Bond suits those seeking a consistent income stream with regular coupon payments for 1 to 10 years, offering predictable, long-term returns. Choose based on your financial needs and investment horizon.


More on Fixed Deposits 

A fixed deposit, offered by a bank or finance company, is a money deposit service for a certain period. In the end, a client gets back a principal with interest in return. Usually, people use fixed deposits as a place to store their funds temporarily, awaiting other investment opportunities at a later time.


  • Short-term deposits: The tenure of short-term deposits can be as short as 1 to 2 weeks, while usual deposit periods span from 3 to 6 months.
  • Longer-term deposits: The longest tenure for fixed deposits can extend up to 3 years. Banks or finance companies usually offer higher interests to long-term depositors than short-term ones.
  • Foreign currency fixed deposits: You may choose fixed deposits of other currencies, which offer higher interest rates and favorable exchange rates than Singapore dollars. At expiry, changing the exchange rate may affect your return when you convert a foreign currency into local dollars. Therefore, foreign currency deposits are riskier than Singapore dollars.

Interest rates

An interest rate, a return on a fixed deposit, varies depending on banks, deposit tenures, and amounts. The higher the deposit amount and term length, the higher the interest rate. However, gaps in rates exist among banks. You should check for the best-fixed deposit interest rates to maximize your return. The current interest rates range from 3% to 4% p.a. for minimum investment amounts.


  • Investor protections: Under Singapore law, investors have compensation protection of up to S$75,000 by the Singapore Deposit Insurance Corporation if a bank is bankrupt. Besides, deposit funds, including capital and interest(depositors commit to a whole term.), are also guaranteed.
  • Liquidity: Fixed deposits are highly liquid assets and are convertible into cash or other assets. If you withdraw from a fixed deposit within a committed period, you may need to forfeit any interest earned or pay a small charge. But you will receive the funds within the same day.


  • Low return: Though safe and guaranteed, fixed deposits have a lower return than other investments and do not appeal to active or aggressive investors opting for higher rewards from other high-rewarding investment tools.
  • Inflation: Fixed deposit is hardly an inflation-fighting arsenal. You may lose your capital in real value if you put all your savings into fixed deposits. High inflation may halt the growth of your savings and eat your real value of funds.

How to Apply

Like savings accounts, you should open one or more fixed deposit accounts with any bank in Singapore. Besides, you must meet a minimum investment amount set by your bank to enjoy promotional fixed deposit rates. Another requirement for a favorable rate is that banks only accept “new funds” from another bank.

How to Redeem

As one of the market’s most liquid investments, you can quickly cash out your funds in fixed deposits in the following steps: 

  1. Present your deposit information
  2. Present your identity
  3. Proceed with the withdrawal with your bank
  4. Get back your funds in cash or transfer them to another account, like a savings account, on the same day.

Happy Asian women put money in a piggy bank. save money concept

More on Singapore Savings Bonds (SSB)

An SSB is one of the Singapore government securities with the government’s full faith. Therefore, the savings bond guarantees the capital and interest payment portion. An SSB suits investors requiring regular and increasing interest income over time.

Besides guaranteed capital and interests, the SSB interest rates are on a step-up basis. A bondholder receives interest income on an increasing annual scale. The longer he accepts interest payments, the higher each interest payment is than the previous one. Usually, an investor gets the highest coupon payment at the last interest payment.


  • High-liquid asset: You can cash out your SSB anytime and forfeit future interest payments without penalty.
  • No risks: As a government-backed security, an SSB guarantees the capital and coupon interests.
  • Low initial investment amount: A minimum investment of S$500 is an entry for budget investors.
  • CPF investors: You can use the funds in CPF accounts to buy SSBs and gain another tax benefit.


  • Lower interest coupons: Compared to other investments like stocks, SSBs are in interest payments and have a lower return.
  • Maximum investment amount: A allowable offer of S$200,000 max. is permitted. 

How to Apply

You should apply for an SSB with:

  1. A bank account with one of DBS, POSB, OCBC, UOB
  2. CDP account linked up to your bank account
  3. A small charge of S$2 applies for every transaction.

You can also apply through an ATM or Internet banking account.

How to Redeem

An SSB will redeem automatically upon expiry and credited to your account with a transaction fee. However, if you redeem before bond maturity, you should submit your request to your bank through an ATM, internet banking account, or SRS account by each business day of every month and can get funds the next business day. A S$2 transaction fee applies to early redemption.

Alternatives to FD & SSB

You may choose other investment options like stocks, ETFs, REITs, or mutual funds instead of FDs and SSBs. However, these growth-oriented investments may incur more price fluctuations because they do not guarantee capital and dividends. 

You should evaluate your risk acceptance level and choose the best one regarding your condition and investment goals.

Read More: ETF vs Mutual Fund vs Unit Trust


1. Are savings bonds better than fixed deposits?

Both investments are low-risk and guaranteed products. Savings bonds suit investors opting for long-term and consistent income, while fixed deposits provide a place for short-term funds with appropriate interest payments to investors.

2. What is better than Singapore Savings Funds(SSBs)?

It depends on factors like risks, investment criteria, and goals. SSBs provide a stable investment environment for investors through capital preservation, fund guarantees, and sovereign backup like no other investments are offered.

However, other risky investments like ETFs, stocks, mutual funds, or gold can offer mid to long-term growth of double digits. Constant market volatility may not suit risk-averse investors for stable income and capital safety. A clear financial roadmap is what you need before deciding the best investment.

Final Thoughts

Fixed deposits offer a parking place for short-term funds to earn interest, while Singapore Savings Bonds provide step-up interest with long-term investors to earn increasing income over time. Both are low-risk and capital-guarantee products but offer low returns. If you are a return-oriented investor and accept high risks, you should look elsewhere.

Key takeaways

  • Fixed deposits and Singapore Savings Funds offer capital and interest guarantee to investors.
  • Fixed deposits fit short-term investors requiring a fund parking place with modest interest payments.
  • SSBs provide long-term investors with increasing higher interest payments over time.
  • Both investments offer a lower return, unable to beat inflation.

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