In September 2025, Singapore’s fixed deposit (FD) interest rates remain modest, with leading banks offering up to 1.60% p.a.. While FDs are safe, they may not keep pace with inflation. This has led many savers to search for the best fixed deposit alternatives in Singapore — or simply, better options than fixed deposits
Best Fixed Deposit Alternatives in Singapore (2025)
One popular alternative to fixed deposits is life income plans such as Singlife Flexi Life Income II and FWD Life Income Plus.
Why Choose a Life Income Plan Instead of Fixed Deposits?
Unlike FDs, which have limited growth, these FD alternatives in Singapore provide guaranteed yields and protection benefits.
Higher Potential Returns – up to 3.3% p.a. guaranteed
Capital Guarantee – your principal is protected
Lifetime Income Streams – annual payouts, similar to FD interest
Death Benefit – payout to beneficiaries
Bonus Interest – reinvest payouts for extra 3% p.a
Read more: 3 Best Life Income plans in Singapore
Comparison: Fixed Deposit vs Singlife vs FWD
Fixed Deposit Comparison: Traditional FD vs Life Income Plan in Singapore
| Feature | Fixed Deposit (Singapore 2025) | Singlife Flexi Life Income II | FWD Life Income Plus |
|---|---|---|---|
| Interest Rate (p.a.) | 1.10% – 2.45% | Up to 3.3% | Up to 3.3% |
| Capital Guarantee | ✅ Yes (SDIC up to $100k) | ✅ Yes (SDIC up to $100k) | ✅ Yes (SDIC up to $100k) |
| Liquidity | Fixed tenure (3–24 months) | From year 3 onwards | From year 5 onwards |
| Payouts | End of tenure | Annual lifetime income | Annual/Monthly lifetime income |
| Death Benefit | ❌ None | ✅ Yes | ✅ Yes |
| Extra Bonuses | ❌ None | 3% reinvest bonus | 3% reinvest bonus |
👉 See the visual comparison below for a quick snapshot of Singlife Flexi Life Income II vs FWD Life Income Plus.
Read more: Why an insurance portfolio review is important
Which Plan Suits You Best?
If you want safety and liquidity, a fixed deposit still works.
If you want higher guaranteed returns plus protection, Singlife and FWD life income plans are worth considering. Many Singaporeans use a mix of both for balance.
Get your FREE customised quote today with no hard-selling and pressure. While fixed deposits offer safety, they may not provide substantial growth in today’s low-interest-rate environment. Exploring life income plans like Singlife and FWD can offer higher returns, additional bonuses, and a reliable income stream, all while ensuring your capital is protected. However, it’s crucial to assess your financial goals, risk tolerance, and investment horizon before making a decision.
Frequently Asked Questions (FAQ)
1. Is a fixed deposit better than a life income plan in Singapore?
A fixed deposit offers low returns, while a life income plan vs fixed deposit comparison shows higher yields and added protection.
2. Are Singlife and FWD life income plans safe like fixed deposits?
Yes, both Singlife and FWD life income plans come with capital guarantee from the end of year 3. Unlike bank deposits, they are regulated as insurance products, not banking products. However, they provide principal protection and are covered under the SDIC policy protection scheme (up to S$100,000 per policyholder per insurer).
3. How much more can I earn with a life income plan compared to a fixed deposit?
Fixed deposits in Singapore currently offer up to 2.45% p.a. for a 12-month tenure. In contrast, life income plans can provide guaranteed 3.3% p.a. yields and the potential for reinvestment bonuses. This means your effective returns can be significantly higher compared to parking money in an FD.
4. Can I withdraw money early from Singlife or FWD life income plans?
Yes, but with conditions. For both Singlife Flexi Life Income II and FWD Life Income Plus, capital is guaranteed from the end of year 3. Withdrawals before this period may reduce your returns or surrender value. After year 3 (Singlife) or year 5 (FWD), you can start receiving income and access funds more flexibly.
5. Do life income plans in Singapore carry risks?
Life income plans guarantee your capital and base returns, but the bonuses depend on the insurer’s performance. The main risks are lower-than-expected bonuses or committing funds for a minimum holding period. Unlike FDs, they are not immediately liquid.
6. Should I switch all my savings from fixed deposits to life income plans?
Not necessarily. Fixed deposits offer liquidity and simplicity, while life income plans provide higher returns, lifetime payouts, and protection benefits. Many Singaporeans use a combination of both to balance safety, growth, and accessibility.
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