ST l Interest rates to stay low

Nov 23, 2009
Interest rates to stay low
Annual average savings rate this year likely to fall below last year's 0.22%
By Francis Chan



The rates of savings accounts are unlikely to rise - at least in the next six months, experts say. -- ST PHOTO: KUA CHEE SIONG

SAVINGS accounts have seen miserly interest rates of below 1 per cent per annum since 2001 - and people hoping for better yields ahead will be disappointed.

The rates are unlikely to rise - at least in the next six months, experts say.

Monthly average savings rates have been on a downward trend from January to last month. This means the annual average rate for this year is likely to dip below last year's already paltry 0.22 per cent.

Rubbing salt into savers' wounds - inflation is likely to rise next year.

Based on figures from 10 banks and financial institutions compiled by the Monetary Authority of Singapore (MAS), savings accounts earned an average of 0.22 per cent a year in January, before holding at just 0.16 per cent from July to last month.

This is a far cry from the 1.28 per cent savers used to get in 2000, which was the last time interest rates exceeded 1 per cent.