Thursday, March 11, 2010

Interest rate on bank deposits

Can you share information on the interest rate that you earn on savings account, save-as-you-earn account and fixed deposit of the banks. Show the following:

1. type of account
2. duration (for fixed deposit)
3. bank
4. amount invested
5. interest rate
6. any special condition, e.g. special terms for preferred customer


Anonymous said...

Currently Maybank Isavvy savings and FD is good, especially for those with big amounts (6 or even 7 digits) and willing to lock it up for 2 or 3 years (up to 1.85% pa).

Check Maybank website for details.

Anonymous said...

Hi Mr Tan,

I have $300k in cash sitting in banks and fixed deposits. But the interests are really low. I am looking to invest them to give me an annual income of $30k. Do you think this target is achievable? So far I have avoided financial planners and bank's recommendation of structured deposits.

Advice from other readers are appreciated too.


Ex-Con said...

Hi Retiree,

You are asking for $30K out of $300K every year, that's like non-compounded yield of 10% yearly.

Sorry, but if anyone promises you this, you should kick him in the balls and run away as fast as possible.

Even if it is some sovereign bonds paying you 10% coupon, it is because either (1) that country damn unstable & can collapse anytime, or (2) the domestic inflation is damn high e.g. india, and in the end your money can only buy kacham-puteh.

Take note that studies have shown that even with a low-cost well diversified retirement fund, you should only withdraw 4% of the initial amount each year, if you want your money to last. In your case it is yearly withdrawal of $12,000 only but can have adjustments for yearly inflation. This is provided your $300K is in low-cost mix of 50% equities & 50% investment-grade bonds.

** Below suggestion is only if you are willing to take some risk, and put in months to study and prepare first.

If you are able to bite the bullet, continue to keep your money in FDs. And wait for the next big crash in the stock market -- must be at least 50% drop, like in 1998, 2002 or early 2009. Then whack into STI ETF. If you did this in Mar-Apr 2009, you can expect dividends of about 6% per year. If you willing to educate yourself about stocks, you can select individual blue-chips and financially sound REITS to give yourself about 8% to 12% dividends in such financial crisis.

Jim Rogers call this kind of investing as do nothing but watching the corner of the room. When a pile of money appears in the corner and nobody wants to pick it up, then he will stroll over and grab it.

Anonymous said...

Anon 3:38 pm

You need to do business or invest in stocks to get 10% or more annual returns. And it works both ways, meaning 10% or more losses possible too.

Anonymous said...

I have $400K sitting with CPF since 2006 and have not withdraw any. I am living off my other savings in the bank, but am worried about the low interest returns and the escalating cost of living, food, transport etc.
I am a 63 yrs old retiree and lead a relatively frugal lifestyle. Am I being prudent in my choice? I am also not very good at investing having bought and holding on to a negative portfolio of shares of about minus $50K.

Anonymous said...

I think for those with huge amount of cash sitting in either CPF or bank a/c, they have to think carefully on their actions. I think their top priority is wealth preservation plus some growth to minimize the effect of inflation.
Do some financial planning first and if the amount of money left is enough to last till age 100 in a relatively frugal lifestyle, then I think no harm leaving the cash intact in either CPF or bank a/c.

What is Mr Tan's comments?

Anonymous said...

Finatiq (OCBC), 0.9% FD, 6-month, $10000 minimum, (mine matures next week).

Anonymous said...

Finatiq does not offer FD anymore since November last year.

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