OCBC Bank has raised its promotional interest rates on its fixed deposits to match UOB’s hike earlier this week.
Effective Oct 4, OCBC is offering 2.9% p.a. interest rate on 12-month fixed deposits of at least $20,000 in fresh funds.
OCBC Premier Banking customers get 3.0% p.a., while OCBC Premier Private clients get 3.1% p.a.
This is up from previous rates of 2.6%-2.8%, effective since Sept 15.
Na Kok Peng, head of deposits at OCBC Bank, says: “Our previous promotional time deposit rate… was very well-received by customers. Placements grew close to 70% compared to the same period in August.”
Thanks to the OCBC Digital app for digital banking, Na shares that customers are able to place a time deposit via the app almost immediately. This has buoyed the overall demand for time deposits, which are about 75% higher in average in September and August compared to the average placements in the past six months. “We continue to reward customers for depositing with us and review our interest rate offerings in line with market conditions,” adds Na.
Neck and neck
UOB raised promotional rates on its Singapore dollar fixed deposits on Oct 3, with 10-, 12- and 15-month tenors now at 2.8%, 2.9% and 3.0% p.a. respectively. This is up from last month’s headline rate of 2.8% p.a.
Like OCBC, UOB customers must deposit fresh funds of at least $20,000.
For its more affluent customers, UOB has also increased its promotional privilege account interest rates from 1.9% p.a. in September to 2.3% p.a. for fresh fund deposits of between $200,000 and $3 million.
DBS has yet to match the other two banks’ rates on fixed deposits. It last raised rates on Sept 13, bringing payouts on a 12-month tenor to 1.6% p.a. for deposits between $1,000 and $19,999.
Nearing 3.11% p.a. peak
Attractive rates on fixed deposits by the local banks drew long queues at the start of September. With rates on 12-month fixed deposits pushing past 3%, Singapore last saw higher rates in November 1998, when it hit 3.11%, according to data from the Monetary Authority of Singapore (MAS).
Other bond instruments have also moved in line with fixed deposits. The one-year average return for the November issue of the Singapore Savings Bonds (SSBs) set a record high on Oct 3, hitting a peak of 3.21% since its launch in 2015.
At $500 per bond, SSBs have fixed interest rates that rise for each year they are held, over 10 years. The first-year interest rate of 3.08% in the November issue is also the highest ever for the bond instrument.