It is easy to be cheated (including a business professor), and many poor folks are being cheated. One of the main reasons is our bank deposit interest rate is ridiculously low. Some say this is due to market forces.
But I choose to believe it is caused by market manipulation by the banks and their cartel-like action. Credit card loans are charged at 24% p.a. yet the savings account interest is below 0.2% p.a. The government should legislate the mandatory bank deposit rate to be at least CPF rate minus 1.0% p.a.; that is at 1.5%.
Yes, I suspect there is some manipulation of bank deposit interest rate, due to cartel like action, but not fully.
It also has something to do with whether the banks really need additional funds from depositors. That's why some foreign banks pay more in interest due to this reason and also why all my money is parked there.
Agreed, bank deposit interest rate is too ridiculously low. The reason is because too many foreigners around the region like the Indonesians, Thais, Malaysians, etc deposited their excess and unaccounted cash here. Thus the banking system is flushed with liquidity. Sing Dollar, usually being the strongest currency relative to the region currency is also another factor why foreigners like to deposit excesses cash here.
I put in a sum of money as fixed deposit in Maybank for a period of four months. At the end of it, I received a letter from them saying that it has been rolled over for a further four months at less than a third of the original interest rate. I asked them to transfer the money to my DBS bank account. The fee charged for the transfer is more than the interest I have earned.
Why is the bank interest rate so low that depositiors are lured by any products which offer slightly more attractive interest rates but with lots of risk?
Daily, people are cheated by insurance agents, At the mrt, malls, in the homes people are being stripped of the interest. It is a very lucrative vocation that requires no qualification except lying.
Please see below link from UK Guardian. http://www.guardian.co.uk/football/2009/jun/12/mike-ashley-newcastle-united-singapore-profitable Why is such journalism not encouraged in Singapore? This is not attacking government or mischievous it is asking reasonable questions about a company claiming to offer investment products where transparency to investors should be everything.
Mr. Binder of Mckinsey, a global consultancy on insurance lamented that the working adults in Singapore are under insured and this creates opportunities for insurers. To a casual visitor it may appear so but he forgot Singapore population is not growing and therefore under insurance is not due to population growth.Perhaps , shy to fill him in that the insurers, in cahoot with the insurance agents are the cause of the under insurance. How to have consumers adequately insured when the insurance agents and their companies are only interested to sell products with high cost and high commission.These products only the rich can afford adequately and not the ordinary man in the street. In 2008 averagely $37K sum assured was sold by the insurance agents and their companies. What do you think? It is very obvious that the $37K sold were whole life or endowment products that gave the agents high commission.You can see the agents were NEVER interested to see their clients adequately insured.Oh yes, I heard, the agents are interested but unfortunately their clients can't afford. Poor thing, the insureds' family were put in dire straits when their claim proceed in April 31st,2009 was average $43K, enough to bury the bread winners and leave a couple of months living expenses for the dependents. Averagely a family with 2 children need $500K to leave to dependents to move on but unfortunately the insurance agents have created opportunities for themselves to sell more wholelife products by providing only less than 1/10 of the required amount which is MAS's observation too. So, now you are getting the facts, Mr Stephan Binder, why Singaporeans are grossly under insured and for whose opportunities that the ordinary working adults are under insured.You can now see it is not due to population growth. It is due to the greed, dishonesty, malpractices and consciencelessness of the insurance agents and their companies or you call them the insurers.Both are in cahoot to rob the ordinary folks for their own ends, the insurers for market share and the insurance agents to qualify for mdrt and incentive trips to resorts. I hope that with these facts you can advise our regulator and share what your regulator, the FSA is doing in the future to remove commission and to overhaul the system and to eradicate malpractices in the industry.
Thanks Zhummmeng, for your effort to educate the public. I agree with you on the following points about the whole life products and endowment.
1.WL and endowment are no longer good products because of high cost. Protection is more expensive and return is very poor. 2.People don't really need to have insurance for whole life It is a myth that insurance agents and insurers promote for their own benefits.Statistics are plenty to corroborate this fact that people don't keep for whole life. Only the rich can and for purpose of legacy which for the poor is only a wish. 3.WL as a forced saving? again another of insurance agents' mind conditioning insidious plans.What is forced saving? CPF may be the only forced saving everyone has. Forced saving is a one way street saving. It means you can't touch it.Even so, people are so ingenious that some managed to get out some money from their CPF. As long you can reach your saving it can never be a forced saving. Statistics again prove this. The best chance is discipline and have a plan that you believe. 4. As a protection plan it is very expensive. This is why singaporeans are grossly under insured because they are sold whole life and endowment which only benefit the insurance agents. 5. Saving is miserable and it is a guaranteed loss at the end of it. The problem is there are suckers who beleive in these unethical insurance agents. They are not a planner nor an adviser who can help you with your personal finance. They are salesmen, product pushers who peddle them for high commission. That is why they never mention term products because they get very little com but very good for you. Be more wary of these crooks out there disguised in the forms of gentlemen and ladies.
In the 1970s, the spread between loan and deposit rates were regulated by MAS. Thus, should deposit ratex fall, then loan rates must also fall. But MAS is now using the argument that we leave it to market and as a result, both depositors and borrowers are at the mercy of the banks who only care for their profits. Sadly, the number of local banks have also been reduced to only 3. A free market must mean freedom of entry and exit. It seems MAS is more concerned about the banks than the customers.
Low deposit interest rates encourage people to put their money elsewhere. Buy banking products, stocks etc. That’s why the stock market is being artificially inflated. Low interest rates offered by banks do not reflect the time value of money. Most banks do not practice the old way of banking i.e being the guardian of peoples wealth, being a boring place to work at. It’s such a sad reality that banks nowadays encourage you to take up credit cards to spend and buy their risky products. They are in my own view doing the opposite of being guardian of ones wealth and its easy to see.
As to a comment earlier that daily people are cheated by insurance agents, I have this to say which I have mentioned before. No one is a better guardian of your wealth than you yourself. People are being cheated partly because of greed themselves. You can always say no to them. Always take note theres no free lunch, money do not create out of thin air and no shortcuts. Many research and hard work is needed before committing oneself into investments or insurance. The hard work I mentioned is the same as the hard work you put in your office work, in school or in raising your kids.
1. By keeping interest rates low, you would be motivated to move your money into other products like unit trust, structured products, dual currency bets etc. This generates profit for the banks. And it keeps their relationship managers busy, shifting you from one product to another. Juicing your commission as you are blindsided by your greed.
2. If you keep your money in SGD deposits, inflation would eat it away. The ultra low interest rates also encourage asset bubbles to form, further fueling more inflation. But at least, you won't lose your principal in the stock market jungle. However, this discourage the next generation of Singaporeans from saving for their future. Is this good for our country?
3. If public transport sector has the PTC to provide oversight, why can't this be implemented for banks to protect consumers' interest?
It is because of the ultra low interest rates offered by the banks, that ordinary folks are easily seduced by any products which offered a slightly higher interest rate that comes with unknown and unlimited risk.
The insurance agents always exploit the low interest rate .Eg. ntuc agents will tell you revosave is better than the bank, but how much better? It is like consumers are squeezed between the devil and the deep blue sea.
It is easy to be cheated (including a business professor), and many poor folks are being cheated.
ReplyDeleteOne of the main reasons is our bank deposit interest rate is ridiculously low. Some say this is due to market forces.
But I choose to believe it is caused by market manipulation by the banks and their cartel-like action. Credit card loans are charged at 24% p.a. yet the savings account interest is below 0.2% p.a.
The government should legislate the mandatory bank deposit rate to be at least CPF rate minus 1.0% p.a.; that is at 1.5%.
Yes, I suspect there is some manipulation of bank deposit interest rate, due to cartel like action, but not fully.
ReplyDeleteIt also has something to do with whether the banks really need additional funds from depositors. That's why some foreign banks pay more in interest due to this reason and also why all my money is parked there.
Robert
ReplyDeleteAgreed, bank deposit interest rate is too ridiculously low. The reason is because too many foreigners around the region like the Indonesians, Thais, Malaysians, etc deposited their excess and unaccounted cash here. Thus the banking system is flushed with liquidity. Sing Dollar, usually being the strongest currency relative to the region currency is also another factor why foreigners like to deposit excesses cash here.
I put in a sum of money as fixed deposit in Maybank for a period of four months. At the end of it, I received a letter from them saying that it has been rolled over for a further four months at less than a third of the original interest rate. I asked them to transfer the money to my DBS bank account. The fee charged for the transfer is more than the interest I have earned.
ReplyDeleteWe used to have more than 3 local banks. More banks will definitely have more competition. Why combined to just 3 local banks?
ReplyDeleteWhy is the bank interest rate so low that depositiors are lured by any products which offer slightly more attractive interest rates but with lots of risk?
ReplyDeleteToo much cash in the banks?
starlight
Daily, people are cheated by insurance agents, At the mrt, malls, in the homes people are being stripped of the interest. It is a very lucrative vocation that requires no qualification except lying.
ReplyDeleteConcerned (Jun 7, 11:36pm)
ReplyDeleteFor the first time, I see a knowledgeable comment on this blog.
Well done.
Please see below link from UK Guardian.
ReplyDeletehttp://www.guardian.co.uk/football/2009/jun/12/mike-ashley-newcastle-united-singapore-profitable
Why is such journalism not encouraged in Singapore? This is not attacking government or mischievous it is asking reasonable questions about a company claiming to offer investment products where transparency to investors should be everything.
Mr. Binder of Mckinsey, a global consultancy on insurance lamented that the working adults in Singapore are under insured and this creates opportunities for insurers. To a casual visitor it may appear so but he forgot Singapore population is not growing and therefore under insurance is not due to population growth.Perhaps , shy to fill him in that the insurers, in cahoot with the insurance agents are the cause of the under insurance.
ReplyDeleteHow to have consumers adequately insured when the insurance agents and their companies are only interested to sell products with high cost and high commission.These products only the rich can afford adequately and not the ordinary man in the street.
In 2008 averagely $37K sum assured was sold by the insurance agents and their companies. What do you think? It is very obvious that the $37K sold were whole life or endowment products that gave the agents high commission.You can see the agents were NEVER interested to see their clients adequately insured.Oh yes, I heard, the agents are interested but unfortunately their clients can't afford. Poor thing, the insureds' family were put in dire straits when their claim proceed in April 31st,2009 was average $43K, enough to bury the bread winners and leave a couple of months living expenses for the dependents.
Averagely a family with 2 children need $500K to leave to dependents to move on but unfortunately the insurance agents have created opportunities for themselves to sell more wholelife products by providing only less than 1/10 of the required amount which is MAS's observation too.
So, now you are getting the facts, Mr Stephan Binder, why Singaporeans are grossly under insured and for whose opportunities that the ordinary working adults are under insured.You can now see it is not due to population growth. It is due to the greed, dishonesty, malpractices and consciencelessness of the insurance agents and their companies or you call them the insurers.Both are in cahoot to rob the ordinary folks for their own ends, the insurers for market share and the insurance agents to qualify for mdrt and incentive trips to resorts.
I hope that with these facts you can advise our regulator and share what your regulator, the FSA is doing in the future to remove commission and to overhaul the system and to eradicate malpractices in the industry.
Thanks Zhummmeng, for your effort to educate the public. I agree with you on the following points about the whole life products and endowment.
ReplyDelete1.WL and endowment are no longer good products because of high cost. Protection is more expensive and return is very poor.
2.People don't really need to have insurance for whole life It is a myth that insurance agents and insurers promote for their own benefits.Statistics are plenty to corroborate this fact that people don't keep for whole life. Only the rich can and for purpose of legacy which for the poor is only a wish.
3.WL as a forced saving? again another of insurance agents' mind conditioning insidious plans.What is forced saving? CPF may be the only forced saving everyone has. Forced saving is a one way street saving. It means you can't touch it.Even so, people are so ingenious that some managed to get out some money from their CPF.
As long you can reach your saving it can never be a forced saving. Statistics again prove this. The best chance is discipline and have a plan that you believe.
4. As a protection plan it is very expensive. This is why singaporeans are grossly under insured because they are sold whole life and endowment which only benefit the insurance agents.
5. Saving is miserable and it is a guaranteed loss at the end of it.
The problem is there are suckers who beleive in these unethical insurance agents. They are not a planner nor an adviser who can help you with your personal finance. They are salesmen, product pushers who peddle them for high commission. That is why they never mention term products because they get very little com but very good for you.
Be more wary of these crooks out there disguised in the forms of gentlemen and ladies.
The Watchman
In the 1970s, the spread between loan and deposit rates were regulated by MAS. Thus, should deposit ratex fall, then loan rates must also fall. But MAS is now using the argument that we leave it to market and as a result, both depositors and borrowers are at the mercy of the banks who only care for their profits. Sadly, the number of local banks have also been reduced to only 3. A free market must mean freedom of entry and exit. It seems MAS is more concerned about the banks than the customers.
ReplyDeleteLow deposit interest rates encourage people to put their money elsewhere. Buy banking products, stocks etc. That’s why the stock market is being artificially inflated. Low interest rates offered by banks do not reflect the time value of money. Most banks do not practice the old way of banking i.e being the guardian of peoples wealth, being a boring place to work at. It’s such a sad reality that banks nowadays encourage you to take up credit cards to spend and buy their risky products. They are in my own view doing the opposite of being guardian of ones wealth and its easy to see.
ReplyDeleteAs to a comment earlier that daily people are cheated by insurance agents, I have this to say which I have mentioned before. No one is a better guardian of your wealth than you yourself. People are being cheated partly because of greed themselves. You can always say no to them. Always take note theres no free lunch, money do not create out of thin air and no shortcuts. Many research and hard work is needed before committing oneself into investments or insurance. The hard work I mentioned is the same as the hard work you put in your office work, in school or in raising your kids.
Did you know?
ReplyDelete1. By keeping interest rates low, you would be motivated to move your money into other products like unit trust, structured products, dual currency bets etc. This generates profit for the banks. And it keeps their relationship managers busy, shifting you from one product to another. Juicing your commission as you are blindsided by your greed.
2. If you keep your money in SGD deposits, inflation would eat it away. The ultra low interest rates also encourage asset bubbles to form, further fueling more inflation.
But at least, you won't lose your principal in the stock market jungle. However, this discourage the next generation of Singaporeans from saving for their future. Is this good for our country?
3. If public transport sector has the PTC to provide oversight, why can't this be implemented for banks to protect consumers' interest?
It is because of the ultra low interest rates offered by the banks, that ordinary folks are easily seduced by any products which offered a slightly higher interest rate that comes with unknown and unlimited risk.
ReplyDeletestarlight
The insurance agents always exploit the low interest rate .Eg. ntuc agents will tell you revosave is better than the bank, but how much better? It is like consumers are squeezed between the devil and the deep blue sea.
ReplyDelete