Friday, May 11, 2007

Avoid structured products - another view

Hi, Mr Tan
I share your thoughts on the structured deposits where the bank promises 100% capital protection on an invested sum of money. Sadly, I believe they are a lot of old folks who have succumbed to the bank officers persistent pursue and ended up locking their retirement funds for at least 4 years or more with much returns.
I have enclosed a list of these deposit rates from a local bank and apparently with the lock-in period of 4 years, almost near to maturity rated at (99.42%), it barely makes any profit yet (99.42%), possibly there were initial payouts of say 2% for 2 years, the amount is just miserable.

Enrich Account (Tranche A) 6Jun03 11Jun08 SGD 100% NA 97.19% 7May07
Enrich Account (Tranche A) 6Jun03 11Dec08 SGD 100% NA 95.77% 7May07
Enrich Account (Tranche A) 6Jun03 11Jun07 USD 100% NA 99.42% 7May07
Enrich Account (Tranche A) 6Jun03 11Jun08 USD 100% NA 96.12% 7May07
Enrich Account (Tranche B) 20Jun03 25Jun09 SGD 100% NA 94.31% 7May07
My very own past investment, on average on unit trusts for 5-6 years the profit is between 10-15%. I wonder how many of those structured deposits from banks are worthy to invest.

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