75K Interest Adjustment in UOB One Program ?!

[tomcat]

It was only made known to select customers via SMS on 14th July 2018.

There will be an adjustment to the interest rates / increment amount in the UOB One Program.

 

For those who may not know, or is not using this program, it basically gives an interest of $100 for 50K capped amount parked inside the account. Some other criteria include monthly charge of $500/$1000 to the credit card, crediting of bank salary  or 3 bills connected to them via Giro.

The recent announcement is very very quiet. I received the SMS while my partner did not. Some friends also did not know, I only recently found out. The new changes can be seen in the PDF link below, and it does promise a bigger interest every month IF you are able to meet the 75K cap amount.

 

https://www.uob.com.sg/assets/pdfs/one-account-online-notice.pdf

I have calculated and there is a bit of shortchange between the older rates and newer, 
I wonder if many even know about this increased cap, or are even able to meet it.

It started on August 1st, where the daily account balance must be at 75K for that day's interest to be accrued.
If a full month of 75K is met, the interest amount every month will be approx SGD150.

Any thoughts? Was this made well known to you, if you are an existing UOB One account holder?

The hushed changes resulted in a bit of scramble for me and my partner to shift some funds around to meet the new cap.

 

 

 

 

 

 

 

Edited August 3, 2018 by tomcat

[keyboard]

These sort of deals usually get worse over time... I believe it have happened to other products from the same bank and other banks too. The initial promotion is to lure as much new capital to the bank as possible (due to rising interest rates SIBOR and SOR). Afterwhich there is really no value to provide you the same amount of benefits since the consumer will not likely move the funds out of the bank (or locked in).

 

You do get a higher cap however, the new structure means you get for the next 25k, only 2% rather than the former 2.4% interest. Reducing the effective interest rate (from their website),

Maximum effective interest rate (EIR) on the One Account is 1.50% p.a. for deposits of S$75,000, provided customers meet the criterion of S$500 Card

Spend in each calendar month. Maximum effective interest rate (EIR) on the One Account is 2.44% p.a. for deposits of S$75,000, provided customers

meet both criteria of S$500 Card Spend AND (a) a min. S$2,000 salary credit via GIRO OR (b) 3 GIRO debit transactions in each calendar month.

 

A comparison to the Singapore Savings Bonds for this month's issue will give, year 1-10,

Average return per year, %*	1.75	1.88	1.99	2.09	2.17	2.24	2.29	2.34	2.39	2.44

 

Not forgetting, CPF yielding 4%, SRS (deduction 3.5-7% or more one time). Fixed deposit currently doesn't have promo to match the values though.

 

Of course, no harm if you can meet their criteria of $500+3GIRO. As for the SMS notification, I'm sure it's targeted to those who can put in fresh funds. Banks have the data though their networks of ATM, POS, statements, online etc to know which customers are likely to do what (to benefit them, not so much for you).

[Guest Woodie]

25K can buy a good index stock

[lonelyglobe]

bank are never your friend or neighbour, they will try all ways to milk out as much as they could, on the other hand I don't understand someone with 75k would want to deposit in bank and earn the miserable interest, there are many other better options to part the money depending on your risk appetite

[tomcat]

2 hours ago, keyboard said:

These sort of deals usually get worse over time... I believe it have happened to other products from the same bank and other banks too. The initial promotion is to lure as much new capital to the bank as possible (due to rising interest rates SIBOR and SOR). Afterwhich there is really no value to provide you the same amount of benefits since the consumer will not likely move the funds out of the bank (or locked in).

 

You do get a higher cap however, the new structure means you get for the next 25k, only 2% rather than the former 2.4% interest. Reducing the effective interest rate (from their website),

Maximum effective interest rate (EIR) on the One Account is 1.50% p.a. for deposits of S$75,000, provided customers meet the criterion of S$500 Card

Spend in each calendar month. Maximum effective interest rate (EIR) on the One Account is 2.44% p.a. for deposits of S$75,000, provided customers

meet both criteria of S$500 Card Spend AND (a) a min. S$2,000 salary credit via GIRO OR (b) 3 GIRO debit transactions in each calendar month.

 

This is the breakdown based on the latest rates.

 

15K (1.85% Int = $277.5)
15K (2.00% Int = $300)
15K (2.15% Int = $322.5)
15K (2.30% Int = $345)
15K (3.88% Int = $582)

All added = $1827/year

$1827 divide by 12 mths = $152 / mth

New monthly interest is $152 (+/-)

 

7 minutes ago, lonelyglobe said:

bank are never your friend or neighbour, they will try all ways to milk out as much as they could, on the other hand I don't understand someone with 75k would want to deposit in bank and earn the miserable interest, there are many other better options to part the money depending on your risk appetite

 

Banks and most financial institutions are well, not to be trusted, to put it lightly. Remember Goldman Sachs, Lehman Brothers..

 

It's probably hard for most to understand, but we are minimalists. And streamlining is part and parcel of it - we hv more than enough and have zero risk appetite aka not in any rush to get rich quickly, lol.  

 

Also having lived a bit, we feel keeping things liquid gives us the best options and flexibility. 

[keyboard]

I'm not sure if it makes too much sense. There really isn't much to think about this, since it's the "best" deal at the moment on the market. Only downside is to fulfill the requirements. Of course, if you already have to spend $500/mth + 3 bills to qualify. Else it's an additional of $6000 on card expenses a year which you can earn more putting 75k on fixed deposit. I hope you have already maxxed out on your CPF contribution because compounded 4% is a lot over a few years.

[tomcat]

On 8/3/2018 at 4:52 PM, keyboard said:

I'm not sure if it makes too much sense. There really isn't much to think about this, since it's the "best" deal at the moment on the market. Only downside is to fulfill the requirements. Of course, if you already have to spend $500/mth + 3 bills to qualify. Else it's an additional of $6000 on card expenses a year which you can earn more putting 75k on fixed deposit. I hope you have already maxxed out on your CPF contribution because compounded 4% is a lot over a few years.

Thanks for confirming. It is the easiest and more straightforward scheme that i know of. There are some others but it can get complicated and also not very stable as it utilises some loopholes. My friends play this because they stay on top of it and are interested in monitoring these changes.

Yes, it took me a few weeks to focus all expenditure to this one card, which is the goal of the bank. But I did not opt for the 3 bills, as we have streamlined our lifestyle such that we only have 2 major bills to pay each month. Instead, I opt to credit my salary into the account.

For the past 2 years or so, there has not been any lapses in the criteria, exept for 1 or 2 months. I  simply ask the bank to backdate or waive and they did it no problem. Essentially, with minimal adjustments to spending and lifestyle, there has been free SGD100+ each month. Not a lot, but since I don't spend and it goes into a rainy day account, it just snowballs slowly.

CPF contributons, hmm we are not going full steam - because there is a high chance, we will be not retiring here in SG. So I'll either max out one shot when I need to to meet the minimum requirements, if anything just to get the annuity. Either that or leave it as it is, and just see how to play with the funds for medical or later year investing. Having the money locked down is a bigger drawback than the 4%.

We have our housing sort and paid for, so that will be another asset we see how we can play with, when the time comes.





 

[Coolbriz]

No doubt CPF appears to yield attractive interest, I tend to agree with tomcat to go easy with parking any additional cash to it. In my opinion, judging from the way CPF board adjusts the retirement age and minimum sum before withdrawal, you might end up not having much liquidity with your savings with them. I’m also having account with UOB One. Prior to this, I started with OCBC 360 account as it offered really good interest back then. Well, we probably got to adjust accordng to market condition I guess. 

[doncoin]

It's better to put your money to work than leave it sitting in a savings account. With inflation going on, $1,000 today may not be worth the same a year from now. Figure out the NPV, then calculate the FV. It should help with making a decision. 

Edited August 6, 2018 by doncoin

[sg indian here]

On 8/3/2018 at 3:56 PM, lonelyglobe said:

bank are never your friend or neighbour, they will try all ways to milk out as much as they could, on the other hand I don't understand someone with 75k would want to deposit in bank and earn the miserable interest, there are many other better options to part the money depending on your risk appetite

Agreed... They are perfect loan sharks. 

I went on to close and make full settlement on my loans and CC. 

Still pay out all  within full credit cards... Loans interests... It took me 35 years to free up from this miserable. 

.. Believe me when I said bank are not yr best friends... 

[tomcat]

16 hours ago, Coolbriz said:

No doubt CPF appears to yield attractive interest, I tend to agree with tomcat to go easy with parking any additional cash to it. In my opinion, judging from the way CPF board adjusts the retirement age and minimum sum before withdrawal, you might end up not having much liquidity with your savings with them. I’m also having account with UOB One. Prior to this, I started with OCBC 360 account as it offered really good interest back then. Well, we probably got to adjust accordng to market condition I guess. 

Hi, thanks for your comment. Were you aware of the new 75K cap also?
I have a feeling if most people are not able to meet the new requirements, most will lapse back to 50K,

or in this case 45K. which means the bank will see more people withdrawing and putting their money elsewhere.

Once this happens, then another bank will come up with another product that is more lucrative.

Then it's time to cancel, restart and move around all over again, haha.

 

14 hours ago, doncoin said:

It's better to put your money to work than leave it sitting in a savings account. With inflation going on, $1,000 today may not be worth the same a year from now. Figure out the NPV, then calculate the FV. It should help with making a decision. 

 

Thanks, I have started to look into present & future values, based on inflation with my advisor. Ideally, the insurance policies that have been put into place factor those in, in terms of returns and pay outs, but no harm also doing it for liquid savings. I'll see what I can do.

is blue chip investing still the best for low risk appetite investors?
 

[tomcat]

13 hours ago, sg indian here said:

Agreed... They are perfect loan sharks. 

I went on to close and make full settlement on my loans and CC. 

Still pay out all  within full credit cards... Loans interests... It took me 35 years to free up from this miserable. 

.. Believe me when I said bank are not yr best friends... 

I believe you have achieve an amazing feat, don't beat yourself up!
To be free from rolling debt, and have attained financial freedom is a very good thing.

You sleep much better at night, and you can start outward planning of your life and resources.

I am always very happy when others tell me they have focused on being debt free and achieved it. 

Congratulations once again!
 

Edited August 7, 2018 by tomcat

[Coolbriz]

6 hours ago, tomcat said:

Hi, thanks for your comment. Were you aware of the new 75K cap also?
I have a feeling if most people are not able to meet the new requirements, most will lapse back to 50K,

or in this case 45K. which means the bank will see more people withdrawing and putting their money elsewhere.

Once this happens, then another bank will come up with another product that is more lucrative.

Then it's time to cancel, restart and move around all over again, haha.
 

No, wasn’t aware of the changes.. time to review haha. Thanks for the info  

[doncoin]

8 hours ago, tomcat said:

is blue chip investing still the best for low risk appetite investors?
 

 

Blue chips tend to be somewhat better capitalized by virtue of the size of the companies. However, I think investing directly into the stock of one blue chip company can be putting your eggs in the basket literally. Consider ETFs instead as the risk is more spread out. Some ETFs are more aggressive than others, so if you are low risk, go for the ones with less volatile performance, and keep up with the news to know how it can affect your investments. Plus some ETFs do pay dividends regularly. While it may not be as high as interest, look at it from as a whole, if the value of the fund goes up, it is worth a lot more. 

Edited August 7, 2018 by doncoin

[keyboard]

9 hours ago, tomcat said:

Thanks, I have started to look into present & future values, based on inflation with my advisor. Ideally, the insurance policies that have been put into place factor those in, in terms of returns and pay outs, but no harm also doing it for liquid savings. I'll see what I can do.

is blue chip investing still the best for low risk appetite investors?

 

Do you have an easy way to show how much interest you actually earn from insurance? I really don't think the projected 5 or 7% interest is real. On average, I think they only pay out 0.5-0.9%/annum if you keep to maturity. Same thing with endowment.

 

I don't think blue chip is still a thing in this decade with many blue chip companies not gaining or even losing value. Businesses are no longer the 100/150 years brand anymore with disruptive technology killing a lot of companies that can't keep ahead.

[tomcat]

11 hours ago, doncoin said:

 

Blue chips tend to be somewhat better capitalized by virtue of the size of the companies. However, I think investing directly into the stock of one blue chip company can be putting your eggs in the basket literally. Consider ETFs instead as the risk is more spread out. Some ETFs are more aggressive than others, so if you are low risk, go for the ones with less volatile performance, and keep up with the news to know how it can affect your investments. Plus some ETFs do pay dividends regularly. While it may not be as high as interest, look at it from as a whole, if the value of the fund goes up, it is worth a lot more. 

I'll look into it, thank you!
 

10 hours ago, keyboard said:

 

Do you have an easy way to show how much interest you actually earn from insurance? I really don't think the projected 5 or 7% interest is real. On average, I think they only pay out 0.5-0.9%/annum if you keep to maturity. Same thing with endowment.

I started becoming a minimalist around the age of 30. That helped me to streamline, clarify & project future monthly costs based on what I utilise now. Apart from the obvious consideration of amounts require in semi/full retirement, part of the planning also takes on some morbid issues like what age do I expect to die/hospice care.

But to answer your question the simplest way: figure out how much you need, buffer a comfortable percentage for inflation and unforeseen factors and work backwards. The key is to also fully assess policies with their maxed out riders, most people don't do this. 

I searched for an agent that was able to take on all these, work backwards to achieve the desirable economic landing. He is a nice guy, straightforward, patient to listen and also very serious in handling my concerns, even though he is more used to handling larger portfolios. Since I met him 5 years ago, he has been servicing me with the same passion and care. 

 

He works in a multi-disciplinary financial advisory company, so he is not tied down to one insurance brand, or trying to push one product to meet a sales quota. We were in discussion for a good 3 months, where he pitched about 15 different policies that looks at needs and failsafes. I really have to give it to him the level of dedication. He is a master at what he does.

The base that I have are Hospitalisation, Medical and Life Insurance. The latter two policies are maxed out with riders that promises payout upon maturity at age 55. Combined, the payout will be 3K monthly, not incl active and passive incomes. I expect to transition into semi-retirement at this point, maybe do consulting to keep relevant and still have some cash rolling in. After adding active and passive incomes, expected total monies per mth will be approx 5K. That is way more than what i need, even with how i see inflation shaping my costs. 

Together with my partner, our projected combined (passive income, payouts, etc) will be approx 11K/mth. This is before any CPF - which we will monitor closely to see how best we can play with that. Of course, Annuity will be the most ideal, but it is not vital. The extra 1-2K annuity after meeting minimum sum might not be needed after all. This is also before our individual liquid savings.

For the past 5 years, I have survived on 1.5K a month and feel it is good for me. My partner's expenditure is slightly higher, but together we live a pretty simple life without having to deprive ourselves of anything. We travel, we cook, we enjoy nature, the outdoors, we are not vegans but we eat and consume responsibly. It is a life I am really blessed to have, but that I have put much intention and effort to achieve and sustain. 

The hospitalisation policy that is in place is a failsafe for smaller medical needs. Unless absolutely necessary, the medical insurance policy that covers the critical illnesses should not be touched - and seeing that the hospitalisation policy is also maxed out with all expenses covered, it is more than sufficient to meet low to mid level medical needs.  

I have utilised it for two minor procedures recently at a private hospital, it was really good seeing the investment working and kicking into action, without worrying about footing a single bill. The total costs for the two surgeries were 53K. 

Recently, I also discovered many others doing the same. Apparently it is called the FIRE movement  : Financial Independence, Retire Early. 
The base philosophy mirrors my own, give or take a few elements. It advocates prudent spending, putting away 50% into savings etc, which by default are core minimalist values anyway. 

It makes it possible for most with minimalist leanings to structure a way to achieve financial freedom/independence at an earlier age. 

Although I am not sure what I will do if I were to retire in my 40s, too early is also not good.





 

[Guest Guest]

On 8/3/2018 at 10:24 AM, tomcat said:

It was only made known to select customers via SMS on 14th July 2018.

There will be an adjustment to the interest rates / increment amount in the UOB One Program.

 

For those who may not know, or is not using this program, it basically gives an interest of $100 for 50K capped amount parked inside the account. Some other criteria include monthly charge of $500/$1000 to the credit card, crediting of bank salary  or 3 bills connected to them via Giro.

The recent announcement is very very quiet. I received the SMS while my partner did not. Some friends also did not know, I only recently found out. The new changes can be seen in the PDF link below, and it does promise a bigger interest every month IF you are able to meet the 75K cap amount.

 

https://www.uob.com.sg/assets/pdfs/one-account-online-notice.pdf

I have calculated and there is a bit of shortchange between the older rates and newer, 
I wonder if many even know about this increased cap, or are even able to meet it.

It started on August 1st, where the daily account balance must be at 75K for that day's interest to be accrued.
If a full month of 75K is met, the interest amount every month will be approx SGD150.

Any thoughts? Was this made well known to you, if you are an existing UOB One account holder?

The hushed changes resulted in a bit of scramble for me and my partner to shift some funds around to meet the new cap.

 

 

 

 

 

 

 

Most Singaporeans are living hand to mouth. Tell me which singaporeans have so much money?? 

[keyboard]

1 hour ago, tomcat said:

The base that I have are Hospitalisation, Medical and Life Insurance. The latter two policies are maxed out with riders that promises payout upon maturity at age 55. Combined, the payout will be 3K monthly, not incl active and passive incomes.

 

3K monthly payout from 55 till 100 years? Is this projected or guaranteed? If so, what is the effective interest rate per annum assuming you started this at age 30. Which year will be your breakeven year inclusive of interest (provided the company had not liquidated).

[tomcat]

25 minutes ago, keyboard said:

 

3K monthly payout from 55 till 100 years? Is this projected or guaranteed? If so, what is the effective interest rate per annum assuming you started this at age 30. Which year will be your breakeven year inclusive of interest (provided the company had not liquidated).

I do sense an underlying tone of contrariness which I am not sure is conducive for the discussion. Liquidation is always one possibility amongst many, so it is odd that you have to mention that.

The payout is either incremental, or one time lump-sum. As such the planning is to work backwards to achieve an approx 3K monthly payout based on the individual nest eggs. 

As you may have guessed, I don't give much importance / attention to money or the structures it puts into play, like interest rates etc. I choose to do the bare minimum because Life is more than chasing and obsessing about interest rates, which is why the UOB One account revision caught me by surprise.

 

Give me some time to refer to my policy folio and I'll see if I can share these details. 

 

[tomcat]

1 hour ago, Guest Guest said:

Most Singaporeans are living hand to mouth. Tell me which singaporeans have so much money?? 

This is a topic that I am deeply curious about.

In your opinion, Singaporeans that are living hand to mouth find themselves doing so because of low salary? or other reasons like negative cash flow due to lifestyle inflation (meaning keeping afloat a lifestyle that is more expensive than what they are earning)

To be honest, I have been putting away at least 1K of my salary ever since I had a steady paying job, as I prescribed to the rule of emergency fund of 6 mths to 1 year of expenses. From there, I just continued saving.

I do not come from a wealthy family, so I had to fund myself from a relatively young age, be it expenses or education. I am as average a Singaporean as they come, so if the consensus is that Singaporeans are struggling financially, what is the real reason?

https://www.sloww.co/lifestyle-inflation/

 

[Guest Guest]

12 minutes ago, tomcat said:

This is a topic that I am deeply curious about.

In your opinion, Singaporeans that are living hand to mouth find themselves doing so because of low salary? or other reasons like negative cash flow due to lifestyle inflation (meaning keeping afloat a lifestyle that is more expensive than what they are earning)

To be honest, I have been putting away at least 1K of my salary ever since I had a steady paying job, as I prescribed to the rule of emergency fund of 6 mths to 1 year of expenses. From there, I just continued saving.

I do not come from a wealthy family, so I had to fund myself from a relatively young age, be it expenses or education. I am as average a Singaporean as they come, so if the consensus is that Singaporeans are struggling financially, what is the real reason?

https://www.sloww.co/lifestyle-inflation/

 

Rich calling himself poor.. singaporeans are very prudent. We want to save but can we save? After paying expenses and high taxes, singaporeans have no money left to save! For you to save over $1000a month? Good for you as you are earning a very high salary. Well most singaporeans earn slightly more than $1000 only.

[tomcat]

24 minutes ago, Guest Guest said:

Rich calling himself poor.. singaporeans are very prudent. We want to save but can we save? After paying expenses and high taxes, singaporeans have no money left to save! For you to save over $1000a month? Good for you as you are earning a very high salary. Well most singaporeans earn slightly more than $1000 only.

Can you substantiate your comments with statistics? It seems very exaggerated to say that most Singaporean do not even earn $2000/mth, then our flats, condos and cars must be purchased by ghosts and unicorns.

https://blog.seedly.sg/average-singaporean-household-income-stand/

Please review these figures and correct yourself. 

It it true that Singaporeans like to complain, but throwing assumptions left right centre just to make a silly point must be a new low.

[tomcat]

On 8/8/2018 at 11:54 AM, keyboard said:

 

3K monthly payout from 55 till 100 years? Is this projected or guaranteed? If so, what is the effective interest rate per annum assuming you started this at age 30. Which year will be your breakeven year inclusive of interest (provided the company had not liquidated).

i checked the policies. each policy's payout is different. but the amount is guaranteed + projected. at the time, the projected was 3.2% at the lowest or 4.5% at the highest. I also failed to mention in my earlier posts that I also have a retirement policy! as you know for retirement policies, the amount collected increases with each year upon maturing.

[keyboard]

Thanks for the info. Rather I have asked quite a few insurance agents and they don't know (claim they don't understand what I'm asking) what is the effective interest rate for the money that you put in over the years vs the annuity given out. Why I ask this is because from the statements, it seems like effective interest rate is more like <1% whereas you could have got more from FD.

 

Simple comparison - by putting the money in annuity vs same amount in FD/other stable machines

 

But thanks for the response.

[fly360]

This one of my accounts which generates some cash for me. I am no guru but I am making use of what ever I can to let idle cash work. Placing $75,000 in UOB and getting $150 a month isnt a bad idea. At least the principle is guaranteed intact.

[tomcat]

On 8/10/2018 at 4:32 PM, keyboard said:

Thanks for the info. Rather I have asked quite a few insurance agents and they don't know (claim they don't understand what I'm asking) what is the effective interest rate for the money that you put in over the years vs the annuity given out. Why I ask this is because from the statements, it seems like effective interest rate is more like <1% whereas you could have got more from FD.

 

Simple comparison - by putting the money in annuity vs same amount in FD/other stable machines

 

But thanks for the response.

Will be hard to ask them point blank to calculate as there are too many variables in play.

• rates are adjusted every financial year/quarter (?)
• 1 policy has higher & lower, so that is already 2 outcomes
• different quantum amount and time = different equation to apply

If effective interest rates can only be calculated once you nail down all the variables/boundaries, it defeats the purpose of asking in the first place.
Although if one is really invested, this is ultimately the leg work he will have to do, along with an agent that has the patience of a saint.

All in all, your approach seems to be about getting the best rates, while the usual approach is to work backwards from the amounts

that you foresee yourself needing in later years, and then setting up the infrastructure to achieve it.

 

I am due for a portfolio review anyways, so this is all happening in good time, I can ask and refresh the details.
 

 

 

 

 

 

On 8/11/2018 at 11:18 AM, fly360 said:

This one of my accounts which generates some cash for me. I am no guru but I am making use of what ever I can to let idle cash work. Placing $75,000 in UOB and getting $150 a month isnt a bad idea. At least the principle is guaranteed intact.

Yup same here, I am no financial guru by any stretch of the imagination - I just do the safest way.

 

But what sits more comfortably with me is that the One account allows me to keep the cash liquid at 3.88% maximum while CPF is at 4%. The difference is only 1.2%, less than SGD5/mth. I'd rather forfeit that 5 bucks to have full access and flexibility to my own funds than have everything trapped in a system that is subjected to the whims and fancy of the government.

I am sure there are rich folks out there who can afford to max out their CPF, and still have other funds to invest or rollover somewhere.

But for me, this is my primary nest egg that will continue to grow, and like a mother bird, I will continue to keep my eye on it.

Putting the funds in CPF is like entrusting a large cat to take care of your nest. One day all is well, the next day it can just decide to devour everything, or use your chicks for a snack or a plaything. Once the whole nest is ravaged, the cat just walks away, finds another nest or takes a nap until the next general elections.

 

Haha, no thanks.
 

 

 

 

 

 

 

Edited August 13, 2018 by tomcat

[fly360]

2 hours ago, tomcat said:

Yup same here, I am no financial guru by any stretch of the imagination - I just do the safest way.

 

But what sits more comfortably with me is that the One account allows me to keep the cash liquid at 3.88% maximum while CPF is at 4%. The difference is only 1.2%, less than SGD5/mth. I'd rather forfeit that 5 bucks to have full access and flexibility to my own funds than have everything trapped in a system that is subjected to the whims and fancy of the government.

I am sure there are rich folks out there who can afford to max out their CPF, and still have other funds to invest or rollover somewhere.

But for me, this is my primary nest egg that will continue to grow, and like a mother bird, I will continue to keep my eye on it.

Putting the funds in CPF is like entrusting a large cat to take care of your nest. One day all is well, the next day it can just decide to devour everything, or use your chicks for a snack or a plaything. Once the whole nest is ravaged, the cat just walks away, finds another nest or takes a nap until the next general elections.

 

Haha, no thanks.
 

 

 

 

 

 

 

Thanks for sharing, however I feel compelled to correct the "3.88%" because it is nothing more than a marketing gimmick. UOB is the only bank which advertises its bonus interests in "tiers". What we should be looking at, is really the "effective interest rate" per annum. Before the change on 1 Aug, it was 2.43% on max $50K. After the change,  it becomes 2.44% on max $75K.

However, if you still maintain 50K after 1 Aug, you will be getting less interest actually, because only the 60,001th to 75,000th dollar attracts 3.88% interest. To maintain your interest of 2.44%, you MUST top up deposits to $75K.

 

As with regards to CPF, I am a firm believer of the annual $7k topup to the Special Account to earn 4% interest as well as income tax relief. A return of 4%, risk-free! compound over the working life time!

Edited August 13, 2018 by fly360

[tomcat]

On 8/3/2018 at 4:08 PM, tomcat said:

 

This is the breakdown based on the latest rates.

 

15K (1.85% Int = $277.5)
15K (2.00% Int = $300)
15K (2.15% Int = $322.5)
15K (2.30% Int = $345)
15K (3.88% Int = $582)

All added = $1827/year

$1827 divide by 12 mths = $152 / mth

New monthly interest is $152 (+/-)

 

 

Banks and most financial institutions are well, not to be trusted, to put it lightly. Remember Goldman Sachs, Lehman Brothers..

 

It's probably hard for most to understand, but we are minimalists. And streamlining is part and parcel of it - we hv more than enough and have zero risk appetite aka not in any rush to get rich quickly, lol.  

 

Also having lived a bit, we feel keeping things liquid gives us the best options and flexibility. 

 

5 minutes ago, fly360 said:

Thanks for sharing, however I feel compelled to correct the "3.88%" because it is nothing more than a marketing gimmick. UOB is the only bank which advertises its bonus interests in "tiers". What we should be looking at, is really the "effective interest rate" per annum. Before the change on 1 Aug, it was 2.43% on max $50K. After the change,  it becomes 2.44% on max $75K.

However, if you still maintain 50K after 1 Aug, you will be getting less interest actually, because only the 60,001th to 75,000th dollar attracts 3.88% interest. To maintain your interest of 2.44%, you MUST top up deposits to $75K.

 

As with regards to CPF, I am a firm believer of the annual $7k topup to the Special Account to earn 4% interest as well as income tax relief. A return of 4%, risk-free! compound over the working life time!

Yup, they rearranged the tier system - I did a breakdown earlier. 
If you have 50K, essentially you are still at 45K tier.

[keyboard]

5 hours ago, tomcat said:

All in all, your approach seems to be about getting the best rates, while the usual approach is to work backwards from the amounts

that you foresee yourself needing in later years, and then setting up the infrastructure to achieve it.

 

When the time comes when the cat eat your chicks, you won't be able to get any value from your paper money in the bank. Likely won't be able to withdraw also, just look at how recent years places like Greece pan out. Stock markets will also plummet rendering no value, perhaps except gold or bitcoin.

 

It is interesting that you keep saying to work backwards, if let's say i want $100,000 for retirement, the basis to calculate backwards on premium on 5%, 4%, 3% and 0.5% will be a large difference per year for the same tenure. Not forgetting, the first few years are negative due to sales, agent commission + ongoing maintenance of your account. So if your agent tells you that based on a 3% interest that after 20 years you get your $100k, and after 20 years the Effective Interest is only 0.5%, how many more years it must take to reach the $100k amount.

 

I'm being cynical on a product that nobody can prove how it works and yet tell people to buy it, forget about it and have oneself to blame at the end. Not even sure if the new type of independent advisers earn commission by advising clients to put money in FD instead.

[keyboard]

@tomcat Saw an advert for 6% interest. Didn't go through it properly as the information is not very upfront.

 

https://www.hsbc.com.sg/1/2/premier#welcomerewards

PREMIER ACCOUNT BONUS INTEREST²

Up to
6.0% p.a.
total interest

=

1.5% p.a.
bonus interest
on your SGD
deposits

+

0.8% p.a.
bonus interest
with min. spend of S$800 on your HSBC Premier Debit Card

+

0.7% p.a.
bonus interest
with online remittance with FX via Worldwide Transfer

+

3.0% p.a.
bonus interest
with min. annual premium of S$15,000 on an eligible HSBC Insurance plan