Ensuring Fair and Competitive Base Interest Rates for Saving Accounts
Prime Minister's OfficeSpeakers
Summary
This question concerns whether the Monetary Authority of Singapore (MAS) will take steps to ensure that the 0.05% base interest rate for bank savings accounts remains fair and competitive, as raised by Mr Murali Pillai. Deputy Prime Minister Lawrence Wong replied that deposit rates are market-driven and that MAS does not directly intervene in pricing, though it expects banks to treat depositors fairly and disclose product features clearly. He noted that consumers can earn higher interest between 3.1% and 3.4% through fixed deposits or tiered accounts that reward salary credits and CPF LIFE payouts. Furthermore, alternative options such as Singapore Savings Bonds and Treasury Bills currently provide yields exceeding 3% per annum for interested depositors. MAS will continue to monitor bank processes and work with the industry to ensure that information regarding the wide range of available deposit options is effectively communicated to all customers.
Transcript
3 Mr Murali Pillai asked the Prime Minister whether the Monetary Authority of Singapore will consider taking steps to ensure that the current base interest rate for bank savings accounts standing at 0.05% per annum for all three local banks is fair, competitive and in tandem with the prevailing high interest rate environment.
Mr Lawrence Wong (for the Prime Minister): Deposit rates are set competitively in the market. The Monetary Authority of Singapore (MAS) does not directly intervene in the pricing of bank deposits, but expects banks to treat their depositors fairly and clearly disclose information on the available deposit options and the corresponding product features.
Apart from basic savings accounts, banks offer a range of other savings and fixed deposit products with higher interest rates. For example, based on the latest public information, depositors can earn interest of between 3.1% and 3.4% per annum on fixed deposits if they meet requirements, such as tenor and minimum deposit amounts, which could be as low as S$1,000. Some banks also offer accounts that provide higher interest if customers credit their salary or CPF LIFE payouts to the account and conduct other transactions with the bank. Besides bank deposits, consumers can also access alternatives like Singapore Savings Bonds, Singapore Government Securities and Treasury Bills that currently pay in excess of 3%.
MAS will continue to monitor banks' deposit products and processes and work with the industry to ensure that information on the wide range of deposit options are effectively communicated to all bank customers.