Banks in Singapore scramble for share of deposit pie

Banks here, especially foreign ones, are getting into the seasonal spirit by offering higher interest rates on deposits as they usher in Chinese New Year.

But some market watchers say the banks' motives for handing out 'red packets', to gain a share of the deposit pie after bonus season, may be far from festive.

They say some banks may be scrambling to stockpile cash just in case the global banking system seizes up again as it did in 2008 and 2009.

Banking analyst and head of research at CIMB, Mr Kenneth Ng, said: 'There is an aggressive hunt for deposits. Banks are offering rates considerably higher than the Singapore Interbank Offered Rate (Sibor), especially the foreign banks.'

What some banks are offering

• HSBC

Enjoy 0.8 per cent and 1 per cent per annum on eight- and 12-month Singdollar and US dollar term deposits.
Fresh funds of at least $25,000 and up to $5 million in either currency, deposited from now until Feb 29, will qualify for the promotion.

• UOB

Customers who place an additional sum of $10,000 from now till Feb 29, can enjoy an interest rate of 0.628 per cent a year. The $10,000 can be deposited incrementally throughout the promotional period.

• ANZ

Interest rates that increase at the end of every three-month cycle, starting at 0.7 per cent for the first three months, and up to 1.5 per cent for the fourth quarter, if at least $150,000 is held for a 12-month tenor.
Different rates apply for amounts less than $150,000.

• OCBC

The first 1,000 customers who deposit at least $68,000 will receive a two-piece abalone gift set. The first 380 who deposit $368,000 or more, will receive a six-piece abalone set.