*

smooth

  • Banned
  • 26 -178
    • View Profile
I know FD is only insured up to max $50k only.

Presently, the highest interest FD rates for $50k by banks are 1.4% to 1.46%.

I saw HL BANK offers minimum $100,000 FD for 24 months at 1.7%.

Hence my qns is it safe to deposit $100,000 to $150,000 FD for 24 months at 1.7% at HL Bank? (If only $50k cannot get this 1.7% rate, must at least $100,000)

Or is FD rates likely to go even higher next year and so don't put 24 months at 1.7% now??

Any views??!

*

beaverjuice

  • *****
  • Global Moderator
  • 9599 19
  • Road to Perdition
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #1 on: April 30, 2018, 10:28:16 pm »
I know FD is only insured up to max $50k only.

Presently, the highest interest FD rates for $50k by banks are 1.4% to 1.46%.

I saw HL BANK offers minimum $100,000 FD for 24 months at 1.7%.

Hence my qns is it safe to deposit $100,000 to $150,000 FD for 24 months at 1.7% at HL Bank? (If only $50k cannot get this 1.7% rate, must at least $100,000)

Or is FD rates likely to go even higher next year and so don't put 24 months at 1.7% now??

Any views??!

What do you mean by "safe" ? ??? As in if HLB collapse?

"Risk-free" rate
http://investmentmoats.com/saving-and-investing-my-money/singapore-savings-bonds-ssb-apr-2018-yields-2-31-for-10-year/

http://investmentmoats.com/uncategorized/singapore-savings-bonds-ssb-may-2018-issue-yields-2-39-for-10-year-and-1-65-for-1-year/

You are paying around 10 - 30 basis points above SSB rate for 2 years if i am reading this correctly .... the spread between what you are getting from HLB vs SSB is worth the good sleep at night?

Maybe @kyith knows

PS:  granted that you are unlikely to get full allocation and not more than $100k. Maybe spread this out?

http://www.sgs.gov.sg/savingsbonds/Your-SSB/This-months-bond.aspx
« Last Edit: April 30, 2018, 10:42:20 pm by beaverjuice »
"A man who has depths in his shame meets his destiny and his delicate decisions upon paths which few ever reach."

*

smooth

  • Banned
  • 26 -178
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #2 on: April 30, 2018, 11:14:29 pm »
What do you mean by "safe" ? ??? As in if HLB collapse?

"Risk-free" rate
http://investmentmoats.com/saving-and-investing-my-money/singapore-savings-bonds-ssb-apr-2018-yields-2-31-for-10-year/

http://investmentmoats.com/uncategorized/singapore-savings-bonds-ssb-may-2018-issue-yields-2-39-for-10-year-and-1-65-for-1-year/

You are paying around 10 - 30 basis points above SSB rate for 2 years if i am reading this correctly .... the spread between what you are getting from HLB vs SSB is worth the good sleep at night?

Maybe @kyith knows

PS:  granted that you are unlikely to get full allocation and not more than $100k. Maybe spread this out?

http://www.sgs.gov.sg/savingsbonds/Your-SSB/This-months-bond.aspx

what do you mean by worth the good sleep at night??!

*

beaverjuice

  • *****
  • Global Moderator
  • 9599 19
  • Road to Perdition
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #3 on: April 30, 2018, 11:20:38 pm »
Hmmmm .... the more i look at it,  seems like you are not being adequately compensated for duration risk ...
"A man who has depths in his shame meets his destiny and his delicate decisions upon paths which few ever reach."


*

beaverjuice

  • *****
  • Global Moderator
  • 9599 19
  • Road to Perdition
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #4 on: April 30, 2018, 11:27:17 pm »
what do you mean by worth the good sleep at night??!

Meaning that i get decent yields with SSB with coupons twice yearly.  I can redeem monthly without penalty and my "deposit" is back by a "AAA" rated entity compared with HLB .... there's also the "put" feature of SSB not avail elsewhere
"A man who has depths in his shame meets his destiny and his delicate decisions upon paths which few ever reach."

*

smooth

  • Banned
  • 26 -178
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #5 on: April 30, 2018, 11:32:19 pm »
Hmmmm .... the more i look at it,  seems like you are not being adequately compensated for duration risk ...

you are wrong! FD has no risk!

Only a bit tedious to spread out among many banks at $50K each.

Example that CHW in the 9pm show he went to 10 different banks to deposit $50k FD in each bank so that he can sleep well at night knowing he is fully-insured
« Last Edit: April 30, 2018, 11:35:30 pm by smooth »

*

smooth

  • Banned
  • 26 -178
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #6 on: April 30, 2018, 11:39:03 pm »
Meaning that i get decent yields with SSB with coupons twice yearly.  I can redeem monthly without penalty and my "deposit" is back by a "AAA" rated entity compared with HLB .... there's also the "put" feature of SSB not avail elsewhere

How does this SSB works??!

Now I am diversify with some stocks in OCBC, Keppel Corp, Sembcorp etc and I'm thinking of depositing a fresh $150,000 cash in FD. So far I see this HL Bank is the highest rate at 1.7%. The second highest rate is China bank at 1.46% which I already have one existing $50,000 FD in ICBC
« Last Edit: April 30, 2018, 11:42:02 pm by smooth »

*

beaverjuice

  • *****
  • Global Moderator
  • 9599 19
  • Road to Perdition
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #7 on: April 30, 2018, 11:51:56 pm »
you are wrong! FD has no risk!

Only a bit tedious to spread out among many banks at $50K each.

Example that CHW in the 9pm show he went to 10 different banks to deposit $50k FD in each bank so that he can sleep well at night knowing he is fully-insured

If FD has no risk, what is your question again?  ::)
"A man who has depths in his shame meets his destiny and his delicate decisions upon paths which few ever reach."

*

smooth

  • Banned
  • 26 -178
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #8 on: April 30, 2018, 11:59:42 pm »
If FD has no risk, what is your question again?  ::)

If FD spread among many different banks at $50K in each bank, there is totally no risk!

My qns is becos this HL Bank states this 1.7% rate is need to deposit at least $100K hence my qns on is it safe to deposit $150,000 in HL Bank or not?, becos HL BANK is not a big bank.

*

beaverjuice

  • *****
  • Global Moderator
  • 9599 19
  • Road to Perdition
    • View Profile
If FD spread among many different banks at $50K in each bank, there is totally no risk!

My qns is becos this HL Bank states this 1.7% rate is need to deposit at least $100K hence my qns on is it safe to deposit $150,000 in HL Bank or not?, becos HL BANK is not a big bank.
If FD has totally no risk,  why are you worrying about HLB failing? ??? .... that's a rhetorical question btw ....

Is counterparty risk not a risk and isn't risk anathema to safety? ???

SDIC is pooled risk sharing by the banks (not sure if this is underwritten by the government also) but my point is why need to insure deposits if there is no risk? ???

https://www.sdic.org.sg/SDIC/apps/services/www/SDICSecureApp/desktopbrowser/default/
"A man who has depths in his shame meets his destiny and his delicate decisions upon paths which few ever reach."

*

smooth

  • Banned
  • 26 -178
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #10 on: May 01, 2018, 12:21:47 am »
If FD has totally no risk,  why are you worrying about HLB failing? ??? .... that's a rhetorical question btw ....

Is counterparty risk not a risk and isn't risk anathema to safety? ???

SDIC is pooled risk sharing by the banks (not sure if this is underwritten by the government also) but my point is why need to insure deposits if there is no risk? ???

https://www.sdic.org.sg/SDIC/apps/services/www/SDICSecureApp/desktopbrowser/default/

you are wrong!

What I meant is if each FD deposit in each bank is $50K and deposit several $50k FD in several different bans, there is totally no risk.

*

beaverjuice

  • *****
  • Global Moderator
  • 9599 19
  • Road to Perdition
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #11 on: May 01, 2018, 09:18:51 am »
you are wrong!

What I meant is if each FD deposit in each bank is $50K and deposit several $50k FD in several different bans, there is totally no risk.

okayyyyyyyyyyyyyyy .... so why are you asking if it is safe to deposit $150,000 with HLB? ::)

all i'm saying is that there is an alternative to a FD,  that is the SSB - Singapore Savings Bond,  guaranteed and underwritten by one of the few 'AAA'-rated entities in the world - the Singapore Government.  the interest coupons on the SSB that would be the reference "risk-free" rate (also including short-tenored T-bills and SGS bonds). 

the differential or the premia that you are getting from HLB for their F.D. at 1.7% for 24months does not adequately (at least in my mind) compensate you for the risk (risk of HLB collapsing is higher than the Singapore government collapsing).

the other feature of SSB is that you get 2 coupons a year while HLB's "coupon" is only available after 24months.  a lot of things can happen within 24months.  with SSB you get a little interest 2 times a year.

lastly,  the "put-option" feature of SSB means you can redeem the bonds (once a month) at no risk to your capital and even "profit" from a coupon or two paid out before your redemption.  on the other hand, if by some bad circumstance, you are forced to terminate your F.D. with HLB,  you may have to pay a penalty for premature lifting.  even if there were no penalty, you will not get any interest (zero, zilch, nader).   

the only disadvantage that I have not mentioned is the $2 application fee at the ATM and the time spent to open a CDP account (if you have not already)

anyway to each his own - maybe a retiree like yourself would prefer the old-fashioned F.D. and if you can sleep better at night without worrying about your $150,000 in HLB going under (granted there is little risk of that happening but nevertheless a risk over a 'AAA'-rated entity aka Singapore government),  then by all means stick with the F.D. - that's your hard earned money - but I would split this into 3 tranches with 3 different banks, rather than putting all eggs in one basket (which goes against a core tenet of investment ie. diversification; and I believe is your dissonance here)

I would urge anyone to study the features of SSB before writing it off altogether.  this is an alternative to plain vanilla F.D. at any bank sans the risk, caveat being the $2 application fee each time and the limit of $100K per person.

PS:  I am not vested in SSB because my risk-tolerance and capacity for risk is much higher;  i'm comfortable with REITs' risk premia above SSBs and my believe in the inflation-hedging characteristics - but that's another story altogether larrrrrrrrrrr)
« Last Edit: May 01, 2018, 09:24:37 am by beaverjuice »
"A man who has depths in his shame meets his destiny and his delicate decisions upon paths which few ever reach."

*

beaverjuice

  • *****
  • Global Moderator
  • 9599 19
  • Road to Perdition
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #12 on: May 01, 2018, 09:32:21 am »
How does this SSB works??!

Now I am diversify with some stocks in OCBC, Keppel Corp, Sembcorp etc and I'm thinking of depositing a fresh $150,000 cash in FD. So far I see this HL Bank is the highest rate at 1.7%. The second highest rate is China bank at 1.46% which I already have one existing $50,000 FD in ICBC

how does SSB work?  go ATM apply.  I've provided the links above,  particularly some very helpful analysis from @kyith on his blog,  giving you monthly blow by blow account

you still have high concentration risk in a few stocks and in a single market.

STI ETFs could help somewhat in the diversification

and since you are a retiree,  you should have a proportionate and appropriate exposure to bonds.

do you have some REITs for income?
"A man who has depths in his shame meets his destiny and his delicate decisions upon paths which few ever reach."

*

smooth

  • Banned
  • 26 -178
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #13 on: May 01, 2018, 01:25:01 pm »
okayyyyyyyyyyyyyyy .... so why are you asking if it is safe to deposit $150,000 with HLB? ::)

all i'm saying is that there is an alternative to a FD,  that is the SSB - Singapore Savings Bond,  guaranteed and underwritten by one of the few 'AAA'-rated entities in the world - the Singapore Government.  the interest coupons on the SSB that would be the reference "risk-free" rate (also including short-tenored T-bills and SGS bonds). 

the differential or the premia that you are getting from HLB for their F.D. at 1.7% for 24months does not adequately (at least in my mind) compensate you for the risk (risk of HLB collapsing is higher than the Singapore government collapsing).

the other feature of SSB is that you get 2 coupons a year while HLB's "coupon" is only available after 24months.  a lot of things can happen within 24months.  with SSB you get a little interest 2 times a year.

lastly,  the "put-option" feature of SSB means you can redeem the bonds (once a month) at no risk to your capital and even "profit" from a coupon or two paid out before your redemption.  on the other hand, if by some bad circumstance, you are forced to terminate your F.D. with HLB,  you may have to pay a penalty for premature lifting.  even if there were no penalty, you will not get any interest (zero, zilch, nader).   

the only disadvantage that I have not mentioned is the $2 application fee at the ATM and the time spent to open a CDP account (if you have not already)

anyway to each his own - maybe a retiree like yourself would prefer the old-fashioned F.D. and if you can sleep better at night without worrying about your $150,000 in HLB going under (granted there is little risk of that happening but nevertheless a risk over a 'AAA'-rated entity aka Singapore government),  then by all means stick with the F.D. - that's your hard earned money - but I would split this into 3 tranches with 3 different banks, rather than putting all eggs in one basket (which goes against a core tenet of investment ie. diversification; and I believe is your dissonance here)

I would urge anyone to study the features of SSB before writing it off altogether.  this is an alternative to plain vanilla F.D. at any bank sans the risk, caveat being the $2 application fee each time and the limit of $100K per person.

PS:  I am not vested in SSB because my risk-tolerance and capacity for risk is much higher;  i'm comfortable with REITs' risk premia above SSBs and my believe in the inflation-hedging characteristics - but that's another story altogether larrrrrrrrrrr)

Becos local media advised sporeans to deposit only $50K max in 1 bank and to deposit several $50K in many different banks.

Even the present 9pm channel 8 show also portrayed CHW depositing twenty $50K FD into twenty different banks.

But this HL Bank states their 1.7% rate is only applicable for minimum $100K FD hence my thread's question on whether is it safe to deposit $150K into this HL BANK larrrr!

And also my 2nd part qns on whether is FD rates likely to rise even more next year? Becos I remembered in 2015 my FD rate in Maybank was 1.9% for 1 year but now Maybank's FD rate is only abt 1.35%

*

smooth

  • Banned
  • 26 -178
    • View Profile
Re: Is it safe to deposit $150,000 FD for 24 months at 1.7% in HL Bank?
« Reply #14 on: May 01, 2018, 01:28:08 pm »
okayyyyyyyyyyyyyyy .... so why are you asking if it is safe to deposit $150,000 with HLB? ::)

all i'm saying is that there is an alternative to a FD,  that is the SSB - Singapore Savings Bond,  guaranteed and underwritten by one of the few 'AAA'-rated entities in the world - the Singapore Government.  the interest coupons on the SSB that would be the reference "risk-free" rate (also including short-tenored T-bills and SGS bonds). 

the differential or the premia that you are getting from HLB for their F.D. at 1.7% for 24months does not adequately (at least in my mind) compensate you for the risk (risk of HLB collapsing is higher than the Singapore government collapsing).

the other feature of SSB is that you get 2 coupons a year while HLB's "coupon" is only available after 24months.  a lot of things can happen within 24months.  with SSB you get a little interest 2 times a year.

lastly,  the "put-option" feature of SSB means you can redeem the bonds (once a month) at no risk to your capital and even "profit" from a coupon or two paid out before your redemption.  on the other hand, if by some bad circumstance, you are forced to terminate your F.D. with HLB,  you may have to pay a penalty for premature lifting.  even if there were no penalty, you will not get any interest (zero, zilch, nader).   

the only disadvantage that I have not mentioned is the $2 application fee at the ATM and the time spent to open a CDP account (if you have not already)

anyway to each his own - maybe a retiree like yourself would prefer the old-fashioned F.D. and if you can sleep better at night without worrying about your $150,000 in HLB going under (granted there is little risk of that happening but nevertheless a risk over a 'AAA'-rated entity aka Singapore government),  then by all means stick with the F.D. - that's your hard earned money - but I would split this into 3 tranches with 3 different banks, rather than putting all eggs in one basket (which goes against a core tenet of investment ie. diversification; and I believe is your dissonance here)

I would urge anyone to study the features of SSB before writing it off altogether.  this is an alternative to plain vanilla F.D. at any bank sans the risk, caveat being the $2 application fee each time and the limit of $100K per person.

PS:  I am not vested in SSB because my risk-tolerance and capacity for risk is much higher;  i'm comfortable with REITs' risk premia above SSBs and my believe in the inflation-hedging characteristics - but that's another story altogether larrrrrrrrrrr)

Becos local media advised sporeans to deposit only $50K max in 1 bank and to deposit several $50K in many different banks larrr!

Even the present 9pm channel 8 show also portrayed CHW depositing twenty $50K FD into twenty different banks.

But this HL Bank states their 1.7% rate is only applicable for minimum $100K FD hence my thread's question on whether is it safe to deposit $150K into this HL BANK larrrr!

And also my 2nd part qns on whether is FD rates likely to rise even more next year? Becos I remembered in 2015 my FD rate in Maybank was 1.9% for 1 year but now Maybank's FD rate is only abt 1.35%