To be clear, there is simply nothing even remotely fishy about the source of this money, and there is no dodging US taxes or such. I pay US taxes in full every year. I was simply referring to BBC's point about asset seizure which he has cited several times in conversations devoid of any reference to why the US government would be interested in seizing the money: "it is a real thing, look it up". I was simply recreating his name-dropping civil forfeiture.
Fundamentally I am not sure why US$ deposits in Singapore are held to a different standard than S$ deposits in excess of S$50K in terms of how important deposit insurance coverage (suddenly) is. What about all the deposits in Singapore bank accounts in excess of S$50K, which is the measly SDIC limit here? If deposit insurance were such a critical decision variable, then surely you would recommend that nobody should maintain a single dollar in excess of S$50K in any one bank account.
From an insurance point of view, somebody with a S$80K bank account balance is no different from me with S$50K and US$20K in my account. Forget a dollar, for every substantial sum of money in excess of S$50K, one should open a different account so that it is fully insured by SDIC. But you're not suggesting that, are you?
Is this fetish with deposit insurance a Singapore thing? Deposit insurance 'comes into play' in a big way in a major economy only when a bank fails. But even in the US where it happened a lot in the last decade, individuals with more than US$250K in their accounts did not lose the rest of the money. Every cent in a bank account simply moved over to whichever bank bought out the failed bank. It is not as if the new bank said, "you had 251K in your account with xxx bank, but at our bank your account will only have 250K because that is the FDIC cap".
Sure you could argue that these banks would have had very few >US$250K account deposits to start with, and say a Citibank or Bank of America were to fail, this scenario might actually play out. But Citi or BOA in the US have terribly rates, and it is only the smaller/internet -based banks who have even remotely reasonable CD and savings account rates.
My limited point is that the FDIC insurance on my US$ in a US bank account is to me at least, not a sufficient reason to hold on to the funds in the US.
On 12-month deposits, the US$ FD interest rates are not worse in Singapore than in the US.
Erm, mate, those dollars are ultimately in your Singaporean bank's nostro account at a US bank, or their clearing account at the Fed, and that means they're in US jurisdiction.
TBQH mate you're wrong. If you want to hold dollars, holding them at a Singapore bank is always worse. The interest rates are worse. The deposit insurance is worse. And why on earth are you worried about an IRS seizure scenario? Don't dodge US taxes in the first place!
I simply don't agree with you, vegavega25.
For one, I don't factor the insurance into my calculations. It would take a cataclysmic event for a bank to fail in Singapore, and there would be enough signs along the way seeing which I would move the money in a jiffy. On the other hand, I am less confident about US banks, except for the ones 'too big to fail', where the interest rates are not very attractive.
I agree that there is a cost involved in bringing the money over to Singapore. I do not have a Citibank account in Singapore. Which is why I am wondering if the Transferwise borderless account is a fairly low-cost way to do it. Sending the US$ back to the US is free.
The advantage as I see it is having the money here, with me in Singapore where I now live, still available to use as US$ if I need to, outside the remit of IRS and your own 'asset seizure' possibilities (remote, but nonetheless). Until now I hadn't thought of doing so but the interest rates on forex deposits here are decent enough.
Why would you ever want to do that? The safety decreases (no deposit insurance), and the costs go up (bank fees, etc.) What am I missing?
Some banks in Singapore do not.
Interesting, thanks for this. Is this a good legitimate way to transfer personal US$ funds from a bank account in the US to a US$ bank account in Singapore? From the look of it, Transferwise will charge US$3.30 + a SWIFT fee of US$2. That is superb given that most US banks charge US$25-35 just to do the international wire transfer. Of course it remains to be seen whether the Singapore bank will charge an incoming wire transfer fee - I suppose they will. But they would in either case, so the difference I am looking at is US$5.30 versus US$35.
