Date: For Parliament Sitting on 9 January 2024

Name and Constituency of Member of Parliament

Mr Murali Pillai, MP, Bukit Batok SMC

Question:

To ask 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.

Answer by Mr Lawrence Wong, Deputy Prime Minister and Minister for Finance, and Chairman of MAS:

1. Deposit rates are set competitively in the market. 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.

2. 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%.

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.

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