Amid surge in demand for fixed deposits and festive peak, banks urge customers to go online

SINGAPORE: Banks in Singapore have seen a surge in fixed deposit transactions amid the rising interest rate environment, prompting calls for customers to go online if they are able to, instead of queuing at branches.

Some banks have also deployed more employees at branches to cope with the expected increase in customers over the festive period.

OCBC said the demand for time deposits has continued to "grow significantly" in the past few months.

"The number of monthly time deposit placements has grown consistently seven times on average since June last year," OCBC's head of deposits Na Kok Peng told CNA on Tuesday (Jan 10).

This has translated to higher footfall at bank branches.

"Branch transactions have increased more than 15,000 every month since June 2022," said OCBC's head of branch service and risk management Jean Oh, adding that a majority of these customers were making time deposit-related transactions.

These include new time deposit account openings, deposit placements and withdrawals, applications for government treasury bills and applications for CPF Investment Scheme accounts.

HSBC, Citibank and Hong Leong Finance have similarly seen a surge in fixed deposit placements, with Citibank reporting more than 300 per cent growth in fixed deposits in the last six months.

"At the same time, we have also seen record client flows into fixed income products that can help clients lock in higher yields for longer tenors, given that peak rates may not be maintained for long in view of the macroeconomic environment," said Citibank Singapore's head of wealth management Lui Chee Ming.

HSBC said it has seen "strong interest" from customers, especially those from the Premier segment.

"In particular, we continue to see strong inflows in Q4 2022 where we saw time deposits volume increased by over 400 per cent year on year," said an HSBC spokesperson.

Hong Leong Finance noted that apart from having a "significant number" of new customers keen to capitalise on higher interest rates, people are also looking to lock in deposits in longer tenures than before.

COPING WITH THE SURGE

UOB, which said customers have been “very supportive” of its fixed deposit rate promotions, is among the banks that have beefed up manpower at branches to minimise waiting times. 

The bank noted that customers are not just interested in fixed deposits.

"In the current inflationary environment, customers have also approached us at our branches to apply for T-bills, seek advice on their investment portfolios as well as review their overall financial health," said Mr Benny Chan, managing director of group channels and digitalisation at UOB.

He added that over the past few months, UOB has implemented various measures to boost manpower at branches.

"Customers visiting our branches will be able to utilise our SMS queue system, where they need only come back to the branch to be served after they receive a text message from us," Mr Chan told CNA.

"We have also maximised the number of temporary as well as Gig+U Retiree staff deployment to assist in branch operations, and enhanced our digital services."

OCBC, meanwhile, said that in December, it deployed 60 per cent more employees than usual at its branches to help with the expected increase in customers in the weeks leading up to Christmas as well as the disbursement of government cash payouts.

"With the Lunar New Year also fast approaching, we have maintained the 60 per cent increase in our usual strength to manage the expected surge in customers during the festive season," said Ms Oh.

When CNA visited several banks at Toa Payoh Hub on Wednesday afternoon, there were no queues outside OCBC and Hong Leong.

Lines were seen outside a UOB and DBS branch, but the queues moved relatively quickly, with most customers entering the bank within 15 to 20 minutes.

Some customers queuing outside DBS told CNA that while they were not there for time deposits, their transactions required them to head to a branch. 

One customer, who did not want to be named, said that the "queues are better now" compared with previous years during the same period leading up to Chinese New Year, when people look to withdraw fresh banknotes for red packets.

ONLINE BANKING 

To minimise time spent queuing at bank branches, the banks told CNA that customers are encouraged to do their banking online if they are able to - and this is not limited to fixed deposit transactions.

Depending on the financial institution, customers may be able to make fixed deposit placements online. 

At HSBC, for instance, time deposit placements are offered to customers with an existing current or savings account.

"New customers can consider opening an account with us via our online or mobile channels, at their comfort and convenience," said a spokesperson.

At UOB, applications can also be made on the website or through the app, with varying instructions for customers who already have a fixed deposit account, those without a fixed deposit account but who are existing customers with a savings or current account, as well as those without a savings account with the bank.

"Should customers prefer a face-to-face meeting, they are welcome to visit us at our branches. However, given the increased number of customers coming to our branches to exchange new and fit notes for the upcoming Lunar New Year, we would like to seek their patience and understanding as we handle the festive demand for our in-branch services in the upcoming weeks," said UOB's Mr Chan. 

Hong Leong Finance encourages existing customers to send an online fixed deposit placement instruction via a Letter of Instruction and transfer the funds via PayNow.

"We will contact them upon receiving their instructions and execute the orders," said a spokesperson.

"We have seen an increase in adoption of this alternate FD placement mode by more than 45 per cent quarter-on-quarter for 4Q 2022."

However, new customers are required to visit Hong Leong Finance's branches to open fixed deposit accounts.

"If they wish to visit our branches, it is advisable to avoid the peak days such as Mondays, Fridays and post-public holidays," the spokesperson added.

OCBC's Mr Na said digital time deposit placements have increased by close to 50 per cent in the last quarter of 2022 compared to the preceding quarter, and by eight times from the second quarter of 2022.

At Citibank, more than 95 per cent of the fixed deposits are placed through remote channels such as phone banking and digital banking, said Mr Lui, the bank's head of wealth management.

His advice for people who wants to head down to a bank branch?

"Check if the time deposit placement is available on digital channels, or give their relationship manager or banking hotline a call to see if this can be facilitated on the phone," said Mr Lui.

"Going to a branch for deposit placement should be a last resort."