Short term interest rate increased in recent years

Short term interest rate have been very low for the five years. During the past year, it has increased significantly.

Here are the rates:

         3m SOR   12m SOR   5y SGS
Dec 01    1.3%      1.8%      4.0%
Dec 02    0.9%      1.0%      2.5%
Dec 03    0.8%      1.2%      3.4%
Dec 04    1.5%      1.6%      2.3%
Dec 05    3.3%      3.2%      3.1%
Dec 06    3.6%      3.5%      3.0%

3m SOR - 3 month swap offer rate, ie the rate offered by a bank to another bank
12m SOR - 12 month swap offer rate
5y SGS - 5 year Singapore Government Security

The rate charged by a bank to an individual is usually 1% to 4% higher than the swap rate, depending on the credit risk.

The 3 month rate used to be less than 1.5% p.a. until Dec 2004. It has since increased to 3.6%.

It is now possible to get a fairly good rate of return by investing in the money market (ie you will get swap rate less an expense margin).