ocbc corporate fixed deposit interest rate

But is there a middle ground between the fixed and floating rate packages?įixed rate package are almost always more expensive than floating rate packages.Īs banks are unsure of the future interest rate, they will need to enter into hedging contracts, which incur a fee, to guarantee you the future rates. For example, if a bank charges Sibor + 1%, the bank can be assured to earn the spread of 1%, while the borrower takes on the risk of interest rate fluctuation of the Sibor.įixed rates are more costly for the bank, priced higher and hence harder to sell. Floating rate packages are best for the bank as they can simply put a mark-up on their cost of funds, typically Sibor, Sor or cost of funds or internal reference and most recently pegging to fixed deposit rates.įloating rates transfers the interest rate risks to the borrower. Hence all fixed rate home loans are typically only fixed for a certain period of time, ranging from 1 year to 5 years and reverts back to floating rate after the fixed rate period.īanks always face a challenge between offering fixed or floating rate packages.

It is either the floating rate or the fixed rate mortgage loan.īanks seldom offer very long tenure of fixed rates.

There are only 2 categories of mortgage loans in general.

Ocbc corporate fixed deposit interest rate