Tan Kin Lian's Blog: Banks cash top-up scheme

Tuesday, June 08, 2010

Banks cash top-up scheme

Dear Mr Tan,

I am a regular reader of your blog. I have found it informative and helpful. Many have found the space you have provided a very useful forum. Thank you.

I would like to find out whether there are others like me, finding banks "top-up" schemes unfair and tiring. Because only fresh funds can enjoy higher interest rate, you need to transfer funds and for all the trouble you can only enjoy the higher rate for a short period of time. Initially only Standard Chartered Bank has such scheme. Now UOB and other banks follow suit. I find such schemes very meaningless.

I hope that you can raise this problem in your blog so that others who feel the same way can come together to do something.

Liangxin

My comments
I agree that banks should treat their existing customers fairly. They should not get the customer to go through a lot of trouble just to enjoy a decent rate of interest that is offered to new customers for their deposits.

5 comments:

Anonymous said...: the whole purpose of this tactics is to make depositors visit the branches and let the RM has a chance to meet you so that there is a chance to sell you other bank's products.; June 09, 2010 5:50 AM
Anonymous said...: Rex comments as follows,

I share the view of your reader that bank promotions for "high" intrest rate deposits, coupled with multitiers structures on top up sums, is very "unfair and tiring".

Worst, they seem to pay only very slightly higher interest on only top up amount, and new deposits, how to account are not mentioned. The multitier structure of the top up scheme is also very tiring to digest.

It is strange that such a complicated, silly scheme started by StanChart, is viewed as innovative and other banks are now just following the bandwagon!!!!!!

I think if the banks can't provide high interest then they should simply DON'T provide, heck! What they are doing now --they make tables which take time to fully understand, but it boil down to telling you that you get a miserable few decimal points of interest only when you put in very very very large principal sum.

Most common folk don't have several hundred thousands spare cash to put in bank, so who is the target of these huge Full/half page newspaper advertisements - the masses or the super rich?

Super rich don't put 100,000's in banks for peanuts interest, they have more intelligent ways to grow money.
Ordinary folks don't have so much Principal sum to park to gain from the tiny fractional interests increase.

So all these recent new products is really stupid, as pointed out by your reader!

rex; June 09, 2010 8:46 AM
Anonymous said...: Don't be misled by the recent banks' higher interest rate,
e.g. UOB higher rate only last two or three months, after this short period the interest reverts back to pre-promotion period, thereby wasting time and effort of transfering money or opening new accounts.
Keep track of Warren Buffet's financial moves. In his last Letter, he is keeping cash in the banks, earning miserable returns, and waiting for an opportunity to make investments. So follow this financial guru and have cash ready.
You bet when you open accounts at UOB, the relationship manager would call you and try to sell you some stupid investment plans.; June 09, 2010 9:39 AM
Anonymous said...: Maybe targeted at those with $500000 to 1 or 2 million and who are ultra conservative.

They are not really the super rich. To them maybe a few hundred dollars extra interest every month or for the short period is worth the trouble.

There maybe quite a number of them here. The banks may know better than we do and obviously will not do something silly.; June 09, 2010 10:04 AM
Responsible said...: Remember the people who have sold their homes en-bloc?

Over the last 2-3 years there were at least 6 en-bloc sales and if you total up the number of people who have pocketed $1.5 million,you will know that there is a LOT of cash floating around!

Even after putting aside $500,000 for their next purchase of a home, there is still a large amount sitting in the banks or under the pillow.

With uncertainties in the stock markets, there is a lot of cash waiting on the sidelines. Thats why people are trying to earn $50 to $100K in flipping properties.

The banks are merely trying to soak up loose change.

Again, here is a potential group of people who will cry "unfair" caused by their own greed.

Greed is good.

But do not claim unjust methods and pretend to be some small helpless, uneducated, misinformed 'investor'

I shed not a tear for anyone.

I own up to my own actions, be it stupidity or outright cheated.
This is all about risk management.

Do you feel cheated when after paying $50K for a degree or MBA and realise later that the employment market has changed?
Go sue the university.; June 09, 2010 11:18 AM