Savings Account with the Highest Interest Rate vs Certificate of Deposit

When seeking ways to boost savings through financial institutions in Singapore, you may come across two popular vehicles: savings accounts with some of the highest interest rates, and certificate of deposit (CD) accounts.

With both operating similarly in certain ways, it may be confusing as to which is a better choice that best maximises your gains. However, there are notable differences that impact how they fit into your individual financial strategies.

What is a High-Yield Savings Account?

High-yield savings accounts represent a compelling option for those seeking to maximise returns through tapping into the highest interest rate. Unlike standard accounts with base rates that often hover around 0.05%, these offer significantly higher rates. They allow depositors to earn more with every dollar saved and have a larger pool of emergency funds for a rainy day.

What is a Certificate of Deposit Account

Similar to a high-yield savings account, certificate of deposit accounts enable depositors to earn interest on their balance. The key difference, however, lies in the certificate of deposit’s term length, which can go as high as five years.

Generally, the longer the term, the higher the interest earned. Unlike high-yield savings accounts, the interest rate for certificate of deposit remains constant throughout the term, providing a predictable return. However, this comes with a catch. Withdrawing funds before the term ends often results in an early withdrawal penalty, often equating to the interest earned or would have been earned over a certain period.

Due to these factors, certificate of deposit accounts may not be the ideal choice for building an emergency fund. Emergencies are by nature unexpected and unpredictable, and you never know when you might need immediate access to your savings. Considering this uncertainty, choosing the highest interest rate savings account could be a more suitable option for nurturing and growing your emergency fund, as it allows for more flexibility in withdrawals.

Find Your Perfect Savings Account at Trust Bank

That said, determining which is the best savings account for you in Singapore depends on your unique financial goals and preferences. For those seeking a balanced approach to wealth management, Trust Bank can be your ideal partner.

With Trust Bank, our savings account doesn’t just offer an attractive 2.5% p.a. interest rate; it also rewards account holders with an exclusive 11% savings on groceries and food from the FairPrice Group paid with our debit card.

Notably, what sets us apart is our fee-less approach. Under this structure, you can withdraw money or close your account at any time without penalties. Neither is there a need to maintain a minimum balance amount. In fact, you can even save on foreign transaction fees.

At Trust Bank, we provide more than just a savings account with some of the highest interest rates; we strive to boost the overall value of your banking experience. From interest earnings to daily spending benefits, we’ve crafted our services to fit your financial needs seamlessly. Ready to enhance your financial planning? Sign up online with Trust Bank today!

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