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Would like to understand if having a FD account grants some form of interest rate that is more attractive as compared to savings accounts these days - thanks!
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Both serve different purposes, FD rate is higher than SA. Not everyone have or can achieve those conditions set by eg. DBS Mutliplier.
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FD generally gives a higher interest rate than savings account. It is also less risky than putting money in other forms of investment. But you have to hold on to maturity in order to receive the full interest sum.
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Fixed deposit(FD) also known as time deposit is when you lock a sum of money with an entity(government, coporations, banks) in exchange for higher interest rates than what savings account offer.
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Disadvantage of FD: Illiquid, your money is locked until its maturity. If you choose to withdraw before the maturity date, you will not receive the interest and may inccur transaction fees.
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Advantage of FD: Higher interest rates than what common savings account offer
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Disadvantage of savings account: Lower interest rates than FD
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Advantage of savings account: You can choose to withdraw your money anytime without constraints and inccuring extra charges for any uses.
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You should put only a portion of your money into FD since you may not be able to touch the money within the next few years (usually 5-10 years).
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Jonathan Chia Guangrong
17 Sep 2018
SOC at Local FI
Both instruments serve different purposes. FDs incentive you to leave the money locked in for a sele...
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