By Linette Lai and Joanna Seow

The interest rates on fixed deposit and savings accounts are nearing the lows of 2003, but investors are resigned to keeping their money there, not so much to earn high returns but for safety's sake.

Across the board, interest rates have been sliding downwards.

DBS, for example, has cut its interest rates on both fixed deposit and savings accounts.

UOB has also cut interest rates on its High Yield Account, a current account for large sums. Once, investors could get as much as 1.2 per cent interest on the total value of their deposits and investments. Now the maximum rate they can get is just 0.88 per cent.

According to a Sunday Times check of several banks' websites, the rates on fixed deposit accounts range from a paltry 0.25 per cent at local banks DBS, OCBC and UOB to a slightly more generous 0.625 per cent at Maybank.

As for savings accounts, a check shows that the base rates hover below 0.5 per cent although some banks offer promotions that come with conditions.

Singapore-dollar fixed deposit interest rates are not the only ones that are falling. Those who are eyeing foreign currency fixed deposits will also be disappointed.

Where just early last year a deposit in Australian dollars could have earned more than 8 per cent, OCBC Bank is now offering just 2.52 per cent for a six-month deposit.

As central banks worldwide have slashed their key lending rates to record lows, all other deposit and lending rates have been cut in tandem.

In the case of Singapore, banks' interest rates are largely linked to the Singapore Interbank Offered Rate (Sibor) - the rate banks pay one another to borrow cash and a key influence on the rate that banks pay depositors.

Sibor has fallen to about 0.69 per cent, about a third lower than at the start of the year.

While depositors acknowledge that the low rates mean they will not be able to get much bang for their buck, many would rather be safe than sorry.

With the Straits Times Index down more than half from its peak in 2007, many investors have been burnt by putting their money in stocks.

Bank broker Jerome Emmanuel, 32, is one of them. 'I got my hands burnt once from playing with stocks, so now, no stocks for me,' he said.

For others, keeping their money in savings accounts is a matter of convenience, especially in these uncertain times. 'My money is more accessible in a savings account, which is important as I might need money any time,' said Mr Bryan Lim, 28, an operations staff at the Singapore Expo.

Their sentiments are echoed by many other investors. The majority of the people The Sunday Times spoke to said that they would rather take the low-risk option of keeping their money in low-paying bank accounts, especially as all Singapore-dollar and foreign currency bank deposits are guaranteed until end-2010.

'I don't trust investments,' said Ms Angie Enge, 43, an assistant manager. 'Especially not since the collapse of Lehmann Brothers. I'd rather be safe.'

Still, all is not lost. Investors can benefit if they shop around for a good deal.

For StanChart's 150th anniversary, the bank celebrated by giving customers up to 2 per cent interest on their e$aver accounts, but this applies to top-up amounts.

OCBC's Extra Interest promotion also gave its customers an additional 0.8 per cent interest on top of their base rates.

Looking ahead, Singapore savers will have to be content with meagre returns on their savings as interest rates are unlikely to rise any time soon.

StanChart economist Alvin Liew said that the three-month Sibor, which is influenced by the London Interbank Offered Rate and the US Federal Reserve rates as well as demand for domestic loans, is likely to be fairly weak for the rest of the year.

'We can expect Sibor to be below 1 per cent for the most part of this year.'