USD Fixed Deposits

[battledome64]

I have done this and through DBS to SCB local USD with DBS Remit. At first I thought only one time charge of $30, and not realized there is also agent bank charges another USD$35 (which was unknown until its transferred). I called DBS and luckly got waived this time so the transfer is quite an expensive lesson if no waiver.

$30 is a lot. Last time could issue local USD cheque and it cost like USD 5 per cheque and no charges at clearing bank.

no wonder they removed since it’s not profitable

 

[CaptainWu]

$30 is a lot. Last time could issue local USD cheque and it cost like USD 5 per cheque and no charges at clearing bank.

no wonder they removed since it’s not profitable

Unless there is better way as I am transferring to SCB ready for USD investment if opportunity arrived.

 

[greythorne]

Unless there is better way as I am transferring to SCB ready for USD investment if opportunity arrived.

You not using IBKR?

 

[CaptainWu]

You not using IBKR?

I prefer to keep the USD investment with local bank.

 

[greythorne]

Prefer to leave excess USD in IBKR USD account instead. Earning 3.33% after the first $10k, and come Dec, its likely to earn 3.83% - 4.08%. Its also liquid.

Trying to understand the IBKR interest rates. You mean the 3.38% is only paid on the amount after the USD10k? Meaning let’s say I have USD25k cash in IBKR, the 3.38% is paid only on USD15k? If that’s the case, then isn’t DBS USD FD rates better?

 

[reddevil0728]

Trying to understand the IBKR interest rates. You mean the 3.38% is only paid on the amount after the USD10k? Meaning let’s say I have USD25k cash in IBKR, the 3.38% is paid only on USD15k? If that’s the case, then isn’t DBS USD FD rates better?

3.83% now.

https://www.interactivebrokers.com.sg/en/accounts/fees/pricing-interest-rates.php
if you are looking at face value probably.. but there are other benefits keeping it with IBKR. or buy t-bill

 

[greythorne]

Hey everyone, sharing a hack here.

If you transfer from IBKR in USD to a DBS USD fixed deposit (USD), it automatically puts that amount into a default 1 month deposit and there is no $10 commission fee. Change the maturity instructions to withdraw it to your emulticurrency account. After 1 month move the money as you required. I been doing that for a couple of years now. Please however do call DBS to check in case they change their policy anytime.

For DBS to IBKR even more straightforward, use DBS remit, same day transfer zero fees.

This IBKR DBS method has saved me lots of commission and wire fees over these years.

Want to ask, if it’s possible to transfer USD from IBKR —> DBS multicurrency account —> CIMB Fastsaver account without incurring any fees?
From DBS can transfer SGD to IBKR then change to USD and like what is mentioned in IBKR website, free transfer once in a month.

 

[reddevil0728]

Want to ask, if it’s possible to transfer USD from IBKR —> DBS multicurrency account —> CIMB Fastsaver account without incurring any fees?
From DBS can transfer SGD to IBKR then change to USD and like what is mentioned in IBKR website, free transfer once in a month.

There's an inward remittance fee for transfer into DBS.

https://www.dbs.com.sg/personal/support/bank-overseas-funds-transfer-fees-and-charges.html
unless you are treasures.

also IBKR is not a money changer. if you do keep doing that they might close your account also

 

[greythorne]

3.83% now.

https://www.interactivebrokers.com.sg/en/accounts/fees/pricing-interest-rates.php
if you are looking at face value probably.. but there are other benefits keeping it with IBKR. or buy t-bill

Yup it’s 3.83%. Typo in my comment. What are the other benefits? I do not have knowledge in US-T unlike SG T-bills unless someone can guide how to buy US-T in IBKR.

 

[reddevil0728]

Yup it’s 3.83%. Typo in my comment. What are the other benefits? I do not have knowledge in US-T unlike SG T-bills unless someone can guide how to buy US-T in IBKR.

Before I type out all the possibilities a few questions first.

1) do you invest in stocks?
2) do you trade on margin?
3) do you trade options?

 

[greythorne]

Before I type out all the possibilities a few questions first.

1) do you invest in stocks?
2) do you trade on margin?
3) do you trade options?

1) Yes.
2) No.
3) No. But might be in the future.

 

[reddevil0728]

1) Yes.
2) No.
3) No. But might be in the future.

ok... so some benefits of putting USD with IBKR

1. If you don't buy t-bill which has higher yield than just leaving it as cash, at least you have cash ready to go into the market at opportunistic time instead of having to wait to deposit in
2. it is liquid cash vs timed deposit. so unless the yield is materially higher, you need to account for liquidity
3. if you consider FD, might as well consider T-Bill. FD if you surrender no interest totally. T-bill the longer you hold, the more interest you get, but if you really have to sell, you don't get the full interest but you at least still do
4. if you trade on margin or you sell unsecured puts, the USD cash or USD in T-bill counts towards your collateral to provide buying power.

 

[serverxeon]

If buy US govt notes from IBKR,
are the 6 monthly coupon payment subjected to 30% witholding like dividends too?

 

[serverxeon]

separately, if I decide to embark on DBS USD FD (as opposed to IBKR T-Bills route), how much less % will the DBS one result in?
My brief calculation is 2 way forex loss = 1.5% + DBS Fixed D rate roughly 0.1% lower than T-Bill = Total loss = 1.6%?

 

[reddevil0728]

separately, if I decide to embark on DBS USD FD (as opposed to IBKR T-Bills route), how much less % will the DBS one result in?
My brief calculation is 2 way forex loss = 1.5% + DBS Fixed D rate roughly 0.1% lower than T-Bill = Total loss = 1.6%?

if you are changing USD just for this purpose, i don't think it makes any sense.

 

[serverxeon]

if you are changing USD just for this purpose, i don't think it makes any sense.

i agree. im just toying with the idea.

since my funds are in SGD now,
It seems it's either get USD bonds via IBKR, or just get SGD FD.

 

[reddevil0728]

i agree. im just toying with the idea.

since my funds are in SGD now,
It seems it's either get USD bonds via IBKR, or just get SGD FD.

you already got USD with IBKR to buy bonds?

 

[serverxeon]

you already got USD with IBKR to buy bonds?

Nope. I don't. The funds are in SGD savings now.

I think ibkr exchange rates are competitive enough such that the losses are still minimal?

 

[reddevil0728]

Nope. I don't. The funds are in SGD savings now.

I think ibkr exchange rates are competitive enough such that the losses are still minimal?

For now it might be. in a month or 2 or however number of months, are you certain you wouldn't lose out?

if you are just changing money to USD just to invest in US treasuries because the yield is higher than SG treasuries now.

and then expect to convert back in future and be certain to make money, you might want to think again.

If you are ok to hold USD in future to invest in equities etc, then yes might make sense, but if it is the former. then not so simple

 

[serverxeon]

For now it might be. in a month or 2 or however number of months, are you certain you wouldn't lose out?

if you are just changing money to USD just to invest in US treasuries because the yield is higher than SG treasuries now.

and then expect to convert back in future and be certain to make money, you might want to think again.

If you are ok to hold USD in future to invest in equities etc, then yes might make sense, but if it is the former. then not so simple

Your concern is that usd might fall in the future? Is that correct?

So if I take that out of the equation, then there should be no show stopper right?