Is DeFi the Future of Savings? Comparing Fixed Deposits vs. Stablecoin Yields (2025 Edition) #am05sg

🏦The Great Savings Dilemma

Imagine this: You walk into your bank, deposit your hard-earned $10,000 in a Fixed Deposit (FD), and after a year… you earn a grand total of $250 in interest. 🎉 (yay?)

Meanwhile, your friend parked the same $10,000 in DeFi stablecoin staking and walked away with $800-$1,200. 🤯

Sounds too good to be true?

Let’s compare DeFi vs. traditional savings and see if it's really the future of saving for Singaporeans.

💰 How Fixed Deposits Work in Singapore

Traditional Fixed Deposits (FDs) are straightforward: ✅ You lock in your money for a set period (e.g., 6 months, 1 year). ✅ The bank offers a fixed interest rate (1.5% - 3.5% p.a.). ✅ Your capital is fully protected, but the returns are relatively low.

Example (Feb 2024 rates):

• DBS: 2.8% p.a. (12-month FD)
• UOB: 3.1% p.a. (12-month FD)
• OCBC: 2.9% p.a. (12-month FD)

Source: giphy

📈 How DeFi Stablecoin Yields Work

DeFi platforms allow you to deposit stablecoins (e.g., USDT, USDC, DAI) into lending protocols like Aave, Curve, or Compound, earning returns of 5% - 12% p.a..

✅ Higher yields than FDs. ✅ No lock-in period—you can withdraw anytime. ✅ Your returns come from lending fees & staking rewards.

Example:

• Aave: 5% - 7% p.a. on USDC
• Curve Finance: 6% - 10% p.a. on stablecoin pools
• Binance Earn: 8% - 12% p.a. (promotional rates)

Source: giphy

⚠️ Risks: Is DeFi Safe for Singaporeans?

Before you YOLO into DeFi, here are some real risks:

🔺 Smart Contract Hacks – Some DeFi platforms have been hacked. Stick to reputable protocols with audited smart contracts.

🔺 Stablecoin Depegging – While rare, some stablecoins have lost their $1 peg (e.g., UST crash). Choose well-backed stablecoins like USDC or USDT.

🔺 Regulatory Uncertainty – MAS is still monitoring crypto regulations. Some platforms may become restricted over time.

Source: giphy

🎯 Should You Switch to DeFi?

👉 Go for Fixed Deposits if… you want zero risk and guaranteed returns.

👉 Try DeFi if… you’re willing to learn about stablecoins and can handle some risk.

For many tech-savvy Singaporeans, a mix of both might be the best strategy! 🌱

Would you consider moving your savings to DeFi?

🔗 Related Reads:

📌 Beginner’s Guide to DeFi Investing

📌 Beginner's Guide for Crypto: Licensed under MAS