Fixed deposits, for years, have served as a safe harbour for cautious investors. Due to global interest rates fluctuating and the US dollar maintaining its dominance as a reserve currency, many investors are revisiting USD fixed deposit rates to assess whether they still make sense in 2025. While these instruments continue to offer security and predictability, several new factors—from inflation trends to changing fixed deposit promotions—now determine whether they remain a practical choice.
Interest Rate Trends and Market Shifts in 2025
The appeal of USD fixed deposits depends largely on the broader interest rate environment. Following a period of elevated US Federal Reserve rates between 2023 and 2024, 2025 has seen moderate adjustments as inflationary pressures ease. Due to this, USD fixed deposit rates offered by banks are slightly lower than last year’s highs but still outperform many SGD-based options. This instance means investors can still achieve modest gains, particularly if they are holding funds they intend to park short-term.
However, the stabilisation of rates also signals reduced volatility, meaning fewer opportunities for exceptional returns. In other words, fixed deposits may continue to offer stability, but no longer the windfall-level yields seen during the tightening cycles. The question for investors becomes whether predictable income outweighs the opportunity cost of higher-yield alternatives such as money market funds or short-duration bonds.
Evaluating Fixed Deposit Promotions and Bank Offers
Competition among local and international banks has intensified, with many institutions introducing new fixed deposit promotions to attract foreign currency deposits. These often include higher introductory rates for limited periods, bonus interest for first-time customers, or preferential terms for high-balance accounts. Savvy investors are using these offers strategically—locking in attractive rates for 6 or 12 months before shifting funds when the promotional period ends.
Still, it is critical to read the fine print. Many fixed deposit promotions are conditional on minimum deposit amounts or specific banking relationships, such as premium or priority accounts. Investors should also note that early withdrawal penalties can offset any short-term gains. The most competitive deals are often reserved for deposits above USD 50,000, making these promotions more suited to affluent individuals or corporate treasuries seeking capital preservation.
Currency Risk and Exchange Considerations
While the US dollar remains strong in 2025, local investors must consider currency exchange risk when dealing with USD deposits. The SGD/USD exchange rate continues to fluctuate due to regional trade dynamics and the Monetary Authority of Singapore’s exchange rate policy. A strengthening Singapore dollar could erode returns once funds are converted back into SGD, even if the USD fixed deposit rates themselves appear attractive.
Investors with future USD obligations, such as education, overseas expenses, or business transactions, benefit the most, as they avoid conversion losses. While for everyone else, hedging or timing currency conversions can help protect yields. The gains from fixed deposit interest could be nullified by unfavourable exchange movements without such precautions.
Who Should Still Consider USD Fixed Deposits?
USD fixed deposits continue to make sense for specific investor profiles. Conservative investors who value safety over growth may still find them appealing, especially if they already hold USD-denominated funds. They are also suitable for short-term capital parking, offering better returns than leaving funds idle in a current account.
However, for investors seeking growth or higher yields, the limitations are clear. Real returns remain low with inflation still outpacing most deposit rates. Those with a moderate to high risk appetite may prefer balanced funds, US Treasury bills, or diversified income portfolios that offer higher potential returns without sacrificing too much liquidity.
Conclusion
Ultimately, USD fixed deposit rates in 2025 continue to deliver on their core promise: stability. They remain a dependable choice for individuals prioritising capital preservation or managing short-term liquidity, particularly when paired with well-timed fixed deposit promotions. Yet, they no longer serve as a vehicle for meaningful wealth growth in a changing financial climate.
Investors must assess their broader goals before committing. Fixed deposits are not obsolete, but they now function best as one piece of a diversified financial strategy rather than the main pillar of wealth management.
Visit RHB Bank to discover the latest USD fixed deposit promotions and identify options that align with your investment goals.