DBS Fixed Home Rate loans offer home owners a lot more options

DBS Fixed Home Rate Loans now come with better promotion when you apply for it online

For refinancing of home loan, cash rebate is given for loan amounts of at least S$250,000 for completed HDB flats and S$500,000 for completed private properties.

Bridging Loan

No lock-in period. This is based on the DBS Prime Rate which is currently at 4.25% per annum.

A fixed deposit (FD) is a financial instrument provided by banks which provides investors a higher rate of interest than a regular savings account, until the given maturity date. It may or may not require the creation of a separate account. It is known as a term deposit or time deposit in Canada, Australia, New Zealand, and the US, and as a bond in the United Kingdom and India.

The difference with fixed deposit is that the money cannot be withdrawn from the FD as compared to a recurring deposit or a demand deposit before maturity. Some banks may offer additional services to FD holders such as loans against FD certificates at competitive interest rates.

It is important to note that banks may offer lesser interest rates under uncertain economic conditions. The interest rate varies between 0.95 and 1.4 per cent.

DBS Fixed Home Rate Loans are pegged to the fixed deposit rates in 2015, since then a new category of Home Loans pegged to the Bank’s fixed deposit rates is born. Generally referred to as the DBS FHR home loan packages.

The DBS Fixed Home Rate Loans and their interest rates are based on: –

• FHR + Spread = Housing Interest Rate

If the FHR rises, then the interest rate rises. Some of them may be using FHR (8 months), so for DBS Fixed Home Rate Loans just look at the 8 month FHR plus the spread stated in your contract, this will be your new rate.

Some doubts over DBS FHR Fixed Deposit Pegged Home Loans

Initially it is thought that if the bank has $1,000,000 in fixed deposits in the 8-month Fixed Deposit (DBS FHR-8), therefore the bank can lend out $1,000,000 from this fund. However even if the bank has only $1,000,000 from the 8-month Fixed Deposit, it can lend out more than $1,000,000 because it can fund the loan from other pools of internal funds, although we do not really know how any specific bank funds their loan as this is an internal secret.

If a banks has $1,000,000 of depositors funds in one tranche of funds and then lends out $5,000,000 pegged to this Fixed Deposit rate, the bank may find it profitable to raise the rates for their fixed depositors as any cost increase is covered by 5 times more borrowers on this rate.

What is a Fixed Deposit Scheme

Fixed Deposit Scheme

The tenure of an FD can vary from 7 months days to 12 months and can be as high as 4 years. These investments are safer than investment schemes as they are covered by the Singapore Deposit Insurance Corporation or SDIC. However, SDIC guarantees amount up to $75,000 per depositor per bank.

DI Scheme

The DI Scheme in Singapore was established in 2006 with the primary objective of protecting small depositors. The Scheme protects deposits in savings, current and fixed deposit accounts that are held with full banks and finance companies. The Singapore Deposit Insurance Corporation (SDIC) is responsible for administering the DI Scheme and providing timely compensation for insured depositors in the event of a DI payout. MAS, in consultation with SDIC, conducts periodic reviews of the DI Scheme to ensure adequacy of depositor protection while limiting the cost of the Scheme.

PPF Scheme

The PPF Scheme protects policy owners for all life insurance policies and certain general insurance policies in the event of failure of a life or general insurer. Such general insurance policies include accident and health policies, insurance that are required by law, and Singapore policies of specified personal lines such as personal motor and personal property (structure and contents) insurance. The PPF Scheme is also administered by the SDIC.

Most people do not regard a fixed deposit account as a good form of investment due to the low interest rates. While higher than the interest rates offered by most savings accounts, fixed deposits still offer below-inflation interest rates.

But the simplicity of fixed deposits make them popular among the older generation, since you don’t need any skill, luck, or experience to make money from fixed deposits. Fixed deposits can also be useful to investors who are looking to build a foundation of stable assets that guarantee their principal and returns. They are also useful for sums of money you absolutely cannot afford to lose to the fluctuations of the market.