I would like to find out why foreign banks like ICICI and CIMB can offer higher fixed deposit interest rates than local banks? It it safe to park my money in these bank ? Thanks.
Submitted by: Justin
Banks compete with one another for customers’ deposits. However, foreign banks typically offer higher interest rates for customers’ deposits because foreign banks have a strong demand for customers’ deposits due to their limited branch network in Singapore. Unlike local banks, foreign banks do not have an extensive branch network in Singapore to tap customers’ deposits. Banks make use of these customers’ deposits to extend loans to their borrowing customers. Consumers have to make their own choice as to which banks they should place their deposits with.