Saturday, June 20, 2015

Is it safe to leave deposit with foreign based banks?

Mat Alamak
Is it less safe, as compared to a local bank, to put even a fixed deposit in a foreign based bank here, eg one from Malaysia? Some of these banks are giving very attractive interest rates, even upfront whole interest payment some more. Whereas the local banks are paying comparatively much lower rates even for fixed deposit, and this can make a big difference in interest (even up to 4 figures) for those with big deposit sums.
If the bank is licensed in Singapore, the depositor enjoys the same protection as local banks for a sum of up to $50,000. If you have more than this sum, you can place them in deposits of $50,000 in each bank, to enjoy the full protection. Read this FAQ for more detail.
The foreign banks are able to pay higher interest rates because they do not have a deposit base of low cost funds provided by their depositors.

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