The example below assumes that you have US$10,000 in your Bank's FC account and you intend to invest this sum in fixed deposit for a period of 12 months. There are 2 options for consideration : continue to place the sum in the foreign currency account or to place it in S$ FD.
Placing US$10,000 (Principal Amount) for 12 months (Placement Period) at 3.125% p.a. (FCFD Interest Rate) will earn you an interest of US$312.50 at the end of the 12 months period. Your total investment for 12 months (Principal + Interest) will become US$10,312.50.
Alternatively, if you decide to place the same amount in S$ Fixed Deposits for 12 months, your Principal Amount will be S$14,705 (based on the Bank's US$ Buying TT rate of 1.4705). At the quoted interest rate of 0.825% p.a. for 12 months, your total investment will be S$14,826.32 at the end of 12 months.
You will make a capital gain in S$ (If you withdraw the US$10,312.50 in S$) if the Bank's US$ Buying rate is higher than 1.4377 (14,826.32/10,312.50) in 12 months time. On the other hand, you will incur a capital loss if this rate falls below 1.4377.