Bank Deposits

What
Cash that is deposited in banks to earn interest depending on the account type and tenure.

Pros
It is a liquid asset, easily accessible and earns some interest. In Singapore, deposits are relatively safe as depositors are protected by the Deposit Insurance Scheme - administered by the Singapore Deposit Insurance Corporation - which insures each depositor up to $20,000 per institution they bank with. This covers an individual's Singapore-dollar current, savings and fixed deposit accounts.

The scheme provides depositors with peace of mind and they can expect to be compensated within three weeks of an order by the regulator to pay out from the Deposit Insurance Fund.

Cons
Bank deposits in excess of what is insured by the Deposit Insurance Scheme might be list in a bank run. Also, current bank interest rates, which ranges from 0.2 to 1 per cent, are unattractive. They are also unable to beat inflation, so the monetary value of deposits will diminish over time.