Laddering FDs: A Strategy for Better Liquidity

What Is an FD Ladder?

An FD ladder spreads your savings across several fixed deposits that mature at staggered dates (for example, every 1–3 months). As each “rung” matures, you can either use the cash or roll it into a new FD at a tenor that keeps the ladder going. This creates a steady pipeline of liquidity while maintaining exposure to FD rates.

Why It Works Well in Singapore

• Liquidity on a schedule: Regular maturities give you predictable access to cash without relying on premature withdrawals (which may reduce or forfeit interest and can involve fees—see bank references below).
• Rate capture over time: As rungs mature, you can refresh them at prevailing rates. In changing markets, this helps you avoid being locked into a single rate.
• Deposit Insurance (SDIC): Eligible Singapore dollar deposits are insured up to S$100,000 per depositor per Scheme member, including savings/current/FD and SRS monies. A ladder can be distributed across Scheme members to stay within limits. See the SDIC and MoneySense references for details.

How to Build an FD Ladder

1) Define your cash tiers

Keep an immediate buffer in an accessible account. Allocate the balance to a ladder sized to your needs (e.g., three to six rungs).

2) Choose your rung spacing

Common approaches:

• Monthly access: 1, 2, 3, 4, 5, 6-month rungs. After month 1, one rung matures every month.
• Quarterly access: 3, 6, 9, 12-month rungs. After quarter 1, a rung matures each quarter.

If minimum placement amounts apply, adjust the number of rungs to suit your bank’s requirements.

3) Set maturity instructions

Before each FD starts, choose what happens at maturity (credit to account, or renew). Many banks let you review or change instructions in digital banking close to maturity.

4) Reinvest with intention

On maturity day, decide whether to spend the proceeds or lock them into a new rung. If rates have risen, you can lengthen the tenor on renewal; if rates have softened, you can keep it shorter and reassess on the next cycle.

5) Keep a simple record

Maintain a one-page schedule of amounts, start dates, maturities, and Scheme member names to track SDIC coverage and renewal timing.

Deposit Insurance (SDIC) Essentials

• Coverage: Eligible SGD deposits in savings, current and fixed deposit accounts—and monies under the Supplementary Retirement Scheme—are insured up to S$100,000 in aggregate per depositor per Scheme member.
• CPFIS/CPFRS monies: Aggregated and separately insured up to S$100,000.
• Trust & client accounts: Insured up to S$100,000 per account (without aggregation with the trustee’s other accounts).
• Foreign currency deposits: Not covered under the Deposit Insurance Scheme (see the Scheme member disclosures).
• Scheme member point: Coverage is by legal entity (the Scheme member). If several brands operate under one Scheme member, deposits are aggregated for insurance purposes.

Always check the exact Scheme member name shown on your bank’s Deposit Insurance disclosure and confirm eligibility for the specific account type you are placing.

About Premature Withdrawals

FDs are designed for funds you can set aside until maturity. If you withdraw early, banks commonly state that you may receive less or no interest and, in some cases, an early withdrawal fee may apply. Where available, digital banking channels provide clear steps to request a premature withdrawal. Please refer to your bank’s help pages for up-to-date terms and any fees.

Variations to Consider

“Barbell” ladder

Combine a short-tenor FD rung (for near-term access) with one or two longer-tenor rungs (for potentially higher promotional rates). This keeps liquidity flowing while aiming for a blended return.

FDs plus SSBs

Singapore Savings Bonds (SSBs) can complement an FD ladder. SSBs are redeemable in any month with no penalty (minimum S$500 per transaction), and individuals have an overall SSB holding limit set by MAS. This flexibility can serve as a “liquidity backstop” for larger ladders.

FDs plus T-bills

Six- and twelve-month Treasury Bills (SGS T-bills) can sit alongside FD rungs to diversify issuers and auction timing. Many investors simply hold T-bills to maturity; you can build a T-bill ladder by participating in successive auctions.

Illustrative Ladder (Example Only)

Imagine S$60,000 allocated to six monthly rungs of S$10,000 each at 1–6-month tenors. After month one, S$10,000 matures every month. If you do not need the cash, you roll each maturing rung into a new 6-month FD. This keeps the ladder “evergreen” while giving monthly access.

Quick Questions

Simple Checklist

• Decide your target access frequency (monthly or quarterly).
• Confirm minimum placement amounts and available tenors with your bank.
• Note the Scheme member name and track SDIC coverage.
• Set maturity instructions and calendar reminders.
• Review rates and promos when each rung matures.

Important

FD terms, eligibility, and Deposit Insurance details can change. For any critical decision, please verify the latest information on the official sources listed below and on your bank’s product pages before placing funds.