Savings Accounts

Average Effective Interest Rate for Savings Accounts 2019

Advertised interest rates for savings accounts in Singapore often reflect the highest available rate for one component within a larger, more complex savings plan. In this article, we've calculated the maximum effective interest rate–the highest actual return possible based on account activity–to determine the average rate available to consumers in Singapore.

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Average Effective Interest Rate [EIR] for Singapore Savings Accounts

Currently, the average maximum effective interest rate for savings accounts in Singapore is 1.43% p.a. This reflects the total potential return on savings per annum–or in other words, the amount of interest earned from making deposits across an entire year. It's worth pointing out that interest rates vary substantially according to account type, balance and deposit size, and overall savings behaviour. Nonetheless, this rate establishes a baseline that can be used as a benchmark for consumers seeking out a competitive savings account.

Landscape of Maximum Effective Interest Rates, Singapore Savings Accounts
Average EIR1.43% p.a.
Highest EIR3.65% p.a.
Median EIR0.87% p.a.
Lowest EIR0.08% p.a.
Data based on maximum effective interest rates for 24 savings accounts across 10 banks in Singapore

Because many variables impact savings account interest rates, there is a wide range of available rates. The highest maximum EIR, in fact, is an incredible 3.65% p.a., while the lowest is just 0.08% p.a.

Average EIR for Different Types of Savings Accounts

There are 3 types of savings accounts, each catering to consumers with different savings behaviours. These types include complex, multi-product accounts, accounts that incentivise growth, and basic accounts.

  • Complex, multi-product accounts offer the highest average EIR, at 3.287% p.a. These accounts offer the highest rates, but require the most involvement (salary crediting, use of select credit cards, paying bills through GIRO, and engagement with bank products like insurance and loans). Consumers who cannot fulfil all such criteria earn at lower rates.
  • Accounts that incentivise growth have an average EIR of 1.276% p.a. These accounts require some tracking and maintenance–consumers often need to increase their balance from month to month or forgo making withdrawals–but rarely require engagement with financial products or additional banking activity.
  • Basic accounts require almost no tracking or maintenance, but typically have lower interest rates. In fact, the average EIR for basic savings accounts in Singapore is just 0.447% p.a..

How to Earn the Highest EIR Based on Your Savings Behaviour

Regardless of an account's maximum EIR, consumers' actual earnings are highly dependent on their savings behaviour. Identifying an ideal account type is just the first step; understanding individual plans is equally essential.

Multi-product accounts, for example, have two additional components. First of all, consumers interested in products like insurance, loans, or investments may be able to earn boosted interest if they open a savings account with the same bank. Consumers with high monthly transactions (salary earnings, credit card spend) can also earn bonus rates for their activity. Some accounts reward only one of these components, while others reward both. In either case, consumers should chose their account carefully–failing to fulfil criteria can quickly lower the offered rate.

Average Monthly Interest Earned on S$20k Balance, Multi-Product Savings Accounts

Engagement TypeHigh EngagementMedium EngagementLow Engagement
Salary CreditS$2,000S$1,500S$1,000
Credit/Debit Card SpendS$500S$200S$0
Bank ProductsLoan, Investment, InsuranceLoanN/A
Average Interest EarnedS$42.6910.59S$4.36
Average based on interest earned for a S$20k balance under the stated criteria for 6 multi-product savings accounts across 6 banks in Singapore

Incentivised growth plans also differ across accounts. Some reward incremental growth compared to the previous month, while others require a consistent, month-on-month increase across an extended period of time (6-24months). In this case, flexibility and budget stability are key to selecting an ideal plan.

Finally, basic accounts also have a bit of differentiation–interest rates may vary according to balance size, so it's important to find a plan that caters to the consumer's projected balance. Consumers in this category may also want to consider fixed deposit accounts, which are equally low-maintenance and often offer higher interest rates than basic accounts.

Carrie Arndt

Carrie is a Senior Analyst at ValueChampion, specialising in credit cards in Singapore. She previously led consumer studies worldwide as a Senior Research Executive at MMR Research.

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