Can banks sustain their high-interest savings accounts?

Hmm, the banks are seeking to lock down capital and have a steady stream of income coming in through recurring GIRO transactions. This is in preparation for a recession actually (and a response to the last recession) so that they have sufficient funds for their war chest. I doubt they will drastically lower their interest rates for these savings accounts, maybe just the top tier interest rate, as they still want consumer loyalty during a recession. As the 10-year average return for this month's issue is 1.95%, I don't think that SSB will be more beneficial in the LR. I don't see SSB issues improving in the near future, so I think it is still best to maintain your multiplier or look for short single premium endowment plans which offer you an interest above 2.2%. My two cents here, would love to discuss more with you.

Banks can continue to give attractive rates on the conditions that:

1. They are able to loan out excess liquidity at a much higher rate than what it cost. The net interest margin – NIM (the differential between the lending rate and the borrowing/cost rate). The borrowing rate is what DBS pays to the depositors and lending rate is the rate that DBS earns by loaning out the excess liquidity to corporations, home mortgages, etc. In fact, the NIM in 2019 for DBS is actually increasing. Check out the article linked below.
2. The economy does not go into a recession (point 1 is sort of dependent on this point). In a market downturn, businesses tend to refrain from borrowing from the banks for their expansion and in turn, banks would not be able to loan out its excess liquidity as before. This will impact their earnings and therefore impact the borrowing rate to depositors.
   https://shentonwire.net/2019/08/01/ocbc-and-uob-can-singapore-banks-pull-a-net-interest-margin-trifecta/

As to your concern, if DBS will alter its rate, I don’t think it is something you should be overly worried about since it is outside of your control. Enjoy while it lasts.

That said, if you want to hedge your interest rate risk, you can always go with a fixed deposit to lock in that interest rate.
As always, do your own due diligence.

On a side note, I am starting a financial blog. Do check it out.

www.investment-blueprint.com