REITs vs Fixed Deposit Singapore 2026: Which Gives Better Returns?
Definition: Comparing Singapore REITs and fixed deposits involves weighing higher yield potential and inflation protection from REITs against the capital safety, guaranteed returns, and liquidity of fixed deposits. The right choice depends on your risk tolerance, investment horizon, and income needs.
This article is for informational purposes only and does not constitute financial advice. Please consult a licensed financial adviser before making investment decisions. Data current as at Q1 2026.
Table of Contents — REITs vs Fixed Deposit Singapore 2026: Which Gives Better Returns?
- REITs vs Fixed Deposits: The Core Trade-Off
In 2022–2024, Singapore fixed deposit rates surged to 3.5–4.0% per annum as MAS tightened policy. This made FDs genuinely competitive with S-REITs for the first time in years. By 2025–2026, as the rate cycle turned and deposit rates moderated towards 2.5–3.0%, S-REITs (distributing 5.5–7.5% yields) have recovered their yield advantage.
Fixed Deposit Rates in Singapore 2026
Bank 6-Month FD Rate 12-Month FD Rate DBS ~2.80% p.a. ~2.90% p.a. OCBC ~2.75% p.a. ~2.85% p.a. UOB ~2.80% p.a. ~2.90% p.a. T-Bill (6-month SGS) ~3.0–3.2% p.a. N/A Note: Rates are estimates for Q1 2026 illustration. Verify with banks directly as rates change regularly.
S-REIT Yields in 2026
The iEdge S-REIT Index has an average distribution yield of approximately 5.8–6.5% as at Q1 2026. Individual S-REITs range from ~5.0% (defensive healthcare REITs) to 8%+ (office REITs). This represents a yield spread of 2.5–3.5 percentage points above fixed deposits — the highest since before 2020.
Key Differences: REITs vs Fixed Deposits
Factor S-REITs Fixed Deposits Typical Yield 2026 5.5–7.5% p.a. 2.7–3.0% p.a. Capital Safety Not guaranteed — unit prices fluctuate Principal protected (SDIC up to SGD 75,000) Liquidity High — trade on SGX during market hours Lock-in period (break penalty applies) Inflation Protection Partial — some leases linked to CPI None — fixed nominal return Capital Growth Possible if unit prices rise None Tax on Income Zero for Singapore individuals Zero for Singapore individuals SDIC Protection No Yes — up to SGD 75,000 per depositor Who Should Choose REITs Over Fixed Deposits?
Consider S-REITs if: you have a 3–5 year+ horizon and can tolerate short-term price volatility; you want inflation-linked income growth; you are building a passive income stream with yields significantly above FD rates. Consider fixed deposits if: you need capital certainty within 12 months; you have very low risk tolerance; you want simplicity with guaranteed known returns.
The optimal approach for many Singapore investors: 3–6 months expenses in a fixed deposit (emergency buffer) + T-bills or SSBs for medium-term reserves + a core S-REIT portfolio for long-term income and growth. Use our S-REIT vs Bond Spread Calculator to compare current yield spreads, and our Best S-REITs 2026 guide for a curated REIT list.
- FAQ
REITs vs Fixed Deposits: The Core Trade-Off
In 2022–2024, Singapore fixed deposit rates surged to 3.5–4.0% per annum as MAS tightened policy. This made FDs genuinely competitive with S-REITs for the first time in years. By 2025–2026, as the rate cycle turned and deposit rates moderated towards 2.5–3.0%, S-REITs (distributing 5.5–7.5% yields) have recovered their yield advantage.
Fixed Deposit Rates in Singapore 2026
| Bank | 6-Month FD Rate | 12-Month FD Rate |
|---|---|---|
| DBS | ~2.80% p.a. | ~2.90% p.a. |
| OCBC | ~2.75% p.a. | ~2.85% p.a. |
| UOB | ~2.80% p.a. | ~2.90% p.a. |
| T-Bill (6-month SGS) | ~3.0–3.2% p.a. | N/A |
Note: Rates are estimates for Q1 2026 illustration. Verify with banks directly as rates change regularly.
S-REIT Yields in 2026
The iEdge S-REIT Index has an average distribution yield of approximately 5.8–6.5% as at Q1 2026. Individual S-REITs range from ~5.0% (defensive healthcare REITs) to 8%+ (office REITs). This represents a yield spread of 2.5–3.5 percentage points above fixed deposits — the highest since before 2020.
Key Differences: REITs vs Fixed Deposits
| Factor | S-REITs | Fixed Deposits |
|---|---|---|
| Typical Yield 2026 | 5.5–7.5% p.a. | 2.7–3.0% p.a. |
| Capital Safety | Not guaranteed — unit prices fluctuate | Principal protected (SDIC up to SGD 75,000) |
| Liquidity | High — trade on SGX during market hours | Lock-in period (break penalty applies) |
| Inflation Protection | Partial — some leases linked to CPI | None — fixed nominal return |
| Capital Growth | Possible if unit prices rise | None |
| Tax on Income | Zero for Singapore individuals | Zero for Singapore individuals |
| SDIC Protection | No | Yes — up to SGD 75,000 per depositor |
Who Should Choose REITs Over Fixed Deposits?
Consider S-REITs if: you have a 3–5 year+ horizon and can tolerate short-term price volatility; you want inflation-linked income growth; you are building a passive income stream with yields significantly above FD rates. Consider fixed deposits if: you need capital certainty within 12 months; you have very low risk tolerance; you want simplicity with guaranteed known returns.
The optimal approach for many Singapore investors: 3–6 months expenses in a fixed deposit (emergency buffer) + T-bills or SSBs for medium-term reserves + a core S-REIT portfolio for long-term income and growth. Use our S-REIT vs Bond Spread Calculator to compare current yield spreads, and our Best S-REITs 2026 guide for a curated REIT list.