Interest rate linked structured deposit

Dear Mr. Tan,

I learn a lot of finance knowledge from your website. I wish to share my experience on the following structured product:

Name of product: Interest Rate-Linked Structured Deposit (10yrs-2yrs SWAP rate >0.8 based)
Amount invested: SGD 20000
Period of investment: 5 years
What is your return on maturity? Only 3.2% for the first year, then zero return for the following years.

Why was this product unsatisfactory?

The salesman told me that at least get 3.2% yearly. (Originally, we wanted to open a fixed deposit at about 2%). He said that the bank will return the principal between 2 – 3 years. When we asked to withdraw after 6 months, they told me there is a penalty above 1%.

When I asked on how to check the swap rate daily, they asked us to call their hotline. We had to wait a long time to get a reply.

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REPLY:

Thank you for sharing your experience. It is better to invest in a straight forward fixed deposit, rather than a complicated product.