For a conservative and risk-averse person, is putting my spare cash in fixed deposits a good idea? Saw that CIMB is giving 1.84% interest for locking in my funds for 1 year, any opinions? ?

FD, SSB,

Kinda late to the game, but I think everyone's echoing the same idea: SSBs are the way to go! CIMB's 1.84% interest rate is nothing compared to the 1.95% starting interest rate currently for Singapore's May 2019 issue SSB, accelerating to 2.49% by year 10!

If you were to compare liquidity, you could put your $500 in an SSB today, and withdraw a few days later, with all $500 safely back into your bank account. That's the government's guarantee! For FDs, tough luck - you're locked up for the entire period, so you won't be seeing your spare funds at least for a year.

Comparing default rates - you don't even need to think about it. Singapore is one of the safest places to buy bonds from, given it's large budget surplus and prudent spending strategy. What is a bank's ability to pay compared to Singapore's?

There is good reason why people call SSBs "fixed deposits on steriods". Stronger rates, unrivalled liquidity, and almost 0 default rate, you can see the strength of SSBs appeal. And all you need is a CDP account, and be old enough to drive. I hope this helps you in your journey!

Singapore saving bond is another good option for you to consider.

I think it also depends on the amount of funds you have? Rather than locking it up for one year for less than 2% interest rate, you can consider putting your capital in a bank account that would work best for you? For example if you have a high capital of 70k you can consider the UOB one account which can get you more than 2% if you fulfil their 2 criterias of min spend on card or salary/3 giros. It's also more fluid so if you need the cash anytime you can take it out! Otherwise if it's spare cash I think Singapore savings bonds is also a good risk free investment where you can just park the money there for up to ten years.

Alternatively sometimes you get random products in the market like the recent great eastern/OCBC fixed deposit promo where you place your money for 3 or 5 years and get 2.xx% back. Sorry I can't remember the figure off hand but I think they came up with 2-3 of such products recently!

My personal thinking is that anything that requires me to lock up money for a period of time should get me more than what my bank account can get me. Which is usually more than 2%.