Fixed deposit is one of the safest investment to make with the least amount of risk when compared to other investment options. It is one of the most liquid assets depending on the tenure you have chosen.

While a fixed deposit might not offer the most attractive returns as compared to other investment options, they do offer better security for your assets. On top of that, there are benefits that can help you financially along the way.

Let us shed some light on these benefits.

Getting a loan with your fixed deposit


Imagine that you have your funds tied in a fixed deposit of two years and you are in need of funds urgently. Most people will either liquidate their fixed deposit and in the process lose the payable interest or suffer some premature withdrawal penalty charge. Some may even go for a personal loan which comes with a high interest rate.

Here’s a tip – you can apply for a loan against your fixed deposit, subjected to the bank’s approval. The granted amount can be up to 90% of the total deposited amount in the fixed deposit. Just note that the loan term is subjected to the tenure of the fixed deposit.

Credit card application


If you have been saving since young, it is likely that you have amassed a comfortable 5-figure savings. Many of your friends have been telling you the perks you can get from a credit card while you spend, such as earning cashback or air miles, enjoy exclusive merchant deals, etc.

What if your income does not allow you to apply for the card you want? Fret not, you can place a lump sum into a fixed deposit and use it as a collateral for secured credit card application. For example, UOB requires at least a fixed deposit collateral of $10,000, in case your annual income does not meet the requirements.

Foreign Currency Fixed Deposits

While banks do offer multi-currency saving accounts, they are generally for the convenience of payment, receiving of payments, etc. Unfortunately, the interest return for the saving account is generally low.

Foreign Currency Fixed Deposits offer you better interest returns on your savings as compared to SGD Fixed Deposits. But before you go for this, you should consider the following factors:

  • Foreign exchange risk where you may incur some losses in exchange rates
  • Sovereign risk where you are subjected to the country’s political climate and instability which may result in currency exchange losses

The benefits (and downside) of Fixed Deposits

While the extra benefits are not exactly groundbreaking, it might still come in handy when the extra earnings get you out of a jam. Most importantly, it pays to plan your finances well. While fixed deposit is a liquid asset and offers higher interest than most savings account interest rate in the market, it is worth noting that there is a tenure to it. Failure to stick to the tenure will result in the loss of potential interest.

A smart way to do it is to split your money into different fixed deposits placements with different tenures to maximize your liquidity flexibility while gaining higher potential returns.

In summary, here are some benefits of fixed deposits:

  • Guaranteed returns
  • Low risk investment options
  • Can be used as a collateral to apply for other line of credit
  • Decide how long you want to place your money and how you want to distribute your money to ensure cash liquidity and maximise the interest returns you get

To find out more about the current fixed deposit rates in the market and which financial institution offer the best rates, compare at to find yourself the best deal now.

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GoBear team

Brought to you by GoBear Insurance Broker (SG) Pte. Ltd., a registered insurance broker with the Monetary Authority of Singapore