competition for fixed deposits?
http://btd.sg/1Fb754M
"The launch of the Singapore Savings Bonds (SSB) in the second half of this year could be a win for retail investors but a loss for banks' fixed deposits, industry observers said." - BT
(30-03-2015, 10:35 PM)CCUV Wrote: [ -> ]I think the product will disappoint most vb forumers. If it start with 0.9% interest for the first years, rising to 2-3% for 10 years. If I need short term liquidity I would have place it in a 3 months fd. BOC sg now offerin 1.64% for 3 month, Y would I go for 0.9% p.a? Anything below 50K with a bank is consider risk free since the deposit insurance covers up to that amount.
Naturally the govt doesn't want to kill the FD market. But it is certainly attractive for those who have long term unused funds and who keep on rolling over their FD.
I predict this will result in banks offering even longer term FD than presently.
(30-03-2015, 11:09 PM)pianist Wrote: [ -> ]sounds more like copying those structured products already in existent from the banks?
A structured deposit will not guarantee either the interest or principle or both and you have to hold till maturity or suffer penalties. This guarantees everything. It is almost truly riskless (even partially against inflation) since you can redeem the principle at any time to reinvest.
I thought I read a post by AQ a while ago but it's gone now.
(31-03-2015, 09:32 AM)egghead Wrote: [ -> ]I thought I read a post by AQ a while ago but it's gone now.
Think tanjm made the same points as me in an earlier post, so I deleted mine.
I hope Child Devt Acct (CDA) can be used to buy this savings bonds. Although CDAs are mainly used for the general population
to offset the rising operating costs of raising children. But I see it as a vehicle for education planning.
To the government, it is an alternative source in replacing declining CPF fund. To the public, it is an alternative investment which doesn't come with any lock in period. It's a win win situation IMO.
I hope the final implementation is good.
I got my mom to be 50% equities invested, this ssb seems to be suitable for the next 20-30% flexible and simple bond investment. She was pretty open to the idea knowing that the bond was govt backed.
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