SINGAPORE - Retail deposits in Singapore have grown by up to 40 per cent at two local banks amid economic fall-out due to the Covid-19 outbreak, compared with a year ago, as more bank customers choose saving over spending.

The rise in retail deposits comes as total deposits hit a record high.

OCBC deposits head Gregory Cher told The Straits Times earlier this week that overall retail deposits at the bank have increased in the first five months this year, a 40 per cent year-on-year increase.

Personal finances services head Jacquelyn Tan at the United Overseas Bank said retail customers increased their deposits by 5 to 10 per cent in the first five months of 2020 - almost double the growth rate over the same period last year.

Deposits from customers aged between 25 and 39 grew more compared with those from other age groups, she added.

"This is largely attributable to their cutting back more on their discretionary spending and in turn saving more than they did last year," Ms Tan said.

On total deposits, the Monetary Authority of Singapore website showed a record figure in April. The central bank's preliminary data showed that total deposits through banks' domestic operations, which book transactions mainly in Singdollar, hit a record high at $743.6 billion in April.

The 4 per cent jump between March and April is the starkest compared with the earlier months this year. It is also much higher than the 0.9 per cent increase between March and April in 2019.

The increase between January and February this year is 0.9 per cent, while the rise from February to March this year is 2.1 per cent.

Total deposits in Singdollar hit $716.6 billion in April, up 3.2 per cent from March.

Specific data on individuals' retail deposits is not published on the central bank's site, but the data showed that the total deposits of residents and companies that are not financial institutions in Singapore grew to $560 billion in April, a 3.3 per cent increase compared with March.

Maybank Kim Eng senior economist Chua Hak Bin said that Singdollar deposits at domestic banking units rose strongly in April - by 10.1 per cent year-on-year - "possibly because consumers are stuck at home and saving more during the circuit breaker period".

OCBC chief economist Selena Ling said: "Typically in a recession story, consumers would prefer to save rather than spend given the anticipated deterioration in the labour market prospects."

Drivers of the total deposits growth came from residents outside Singapore and foreign currency deposits, analysts said.

Ms Ling said: "The bouts of risk aversion in the first quarter... may have contributed to some flight to quality flows to Singapore as a financial and wealth centre that is highly rated."

UOB economist Barnabas Gan said: "It reflects Singapore's status as a safe haven given the recent volatility in global markets."

"Foreign currency deposits into Singapore have also been growing since the second half of 2019 as investors found safe refuge in the city-state amid global social and geopolitical tensions," he added.

"The trend of increase in bank deposits is likely to continue on the back of safe haven flows, especially if the impact of Covid-19 pandemic and external social and geopolitical tensions persist for the rest of the year."

DBS Bank could not respond earlier on whether its retail deposits have gone up compared with last year, but its banking analyst Lim Rui Wen noted that demand for fixed deposits in Singapore remained high, alongside a surge in demand deposits, such as deposits in current accounts.

She said: "Fixed deposits growth has declined... possibly as fixed deposits rates have come off and are no longer as attractive."

"The ample deposits growth also continues to show that there is good liquidity in the system currently while Singdollar continues to appreciate... against the greenback as the market looks towards the economy's reopening," she added.

Standard Chartered Bank said on Wednesday that digital sign-ups for credit cards grew 71 per cent year-on-year for the first four months this year.

Wealth and investment-related transactions more than doubled, the bank said.