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400,000 cash for FD. How to get the best FD rate?

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Old 12-02-2020, 03:00 PM   #1
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400,000 cash for FD. How to get the best FD rate?

assuming a couple.

I saw this eEasy by TIQ. That more than 2+ % yield according to BBC. And this should be safe as it covered by SDIC? So if the FI collapse, we get back $75,000 no question asked?

So it will be 150,000. Where should we put the rest of the money? Not interested in other asset classes as I already have money in other asset classes. I looking for 100% risk free with the help of SDIC. Not planning to use the money
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Old 12-02-2020, 03:21 PM   #2
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assuming a couple.

I saw this eEasy by TIQ. That more than 2+ % yield according to BBC. And this should be safe as it covered by SDIC? So if the FI collapse, we get back $75,000 no question asked?

So it will be 150,000. Where should we put the rest of the money? Not interested in other asset classes as I already have money in other asset classes. I looking for 100% risk free with the help of SDIC. Not planning to use the money
FD currently if not wrong is about 1.7% range
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Old 12-02-2020, 03:27 PM   #3
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FD currently if not wrong is about 1.7% range
yes.

as i do not need the 400k, eEasy by TIQ offer 2+% for 6 years. But I can only put 150k (75k 2 person) into it to be 100% safe. My question is whether there is other better deal out there

I believe in efficient market. I do not want to predict the interest rate these few years.
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Old 12-02-2020, 03:43 PM   #4
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If you don't mind locking up the money for 3 years:
https://blog.seedly.sg/aviva-mysecur...ndowment-plan/
https://blog.seedly.sg/singapore-lif...ndowment-plan/
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Old 12-02-2020, 03:54 PM   #5
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Tiq eEasy Save is not covered by SDIC's Deposit Insurance Scheme 75k

it is covered by SDIC's Policy Owners Protection Scheme which is quite different

https://forums.hardwarezone.com.sg/1...39-post10.html

Last edited by oceanicmanta; 12-02-2020 at 03:56 PM..
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Old 12-02-2020, 03:56 PM   #6
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SSB safest but rates not too good.
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Old 12-02-2020, 04:11 PM   #7
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I checked.

SDIC cover up to 100k for endowment and it based on surrender value.

For year 1, etiqa eeasy only offer 2000 surrender value. So if it fail in first year, you only get back 20% of the money

seems to be not worth it for the low interest

Last edited by lordofthering; 12-02-2020 at 04:28 PM..
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Old 12-02-2020, 06:47 PM   #8
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If you don't plan to use the money and just want a safe place to park it "forever," and with periodic income, then you could place a noncompetitive bid for the 30 year Singapore Government Security which is being auctioned this month (February, 2020). The issue code is NA20100F. If market interest rates don't change between now and the auction date it'll yield just over 2.0%.

Singapore Government Securities are backed by the full faith and credit of the Government of Singapore. There is no safer Singapore dollar-denominated asset. These bonds have the most liquidity on the secondary market, but there's still some bid-ask spread and some costs involved in selling your bond if you want to sell it before maturity. And of course there's no guarantee that your bond will fetch any particular price on the secondary market. The Government of Singapore only guarantees payment of coupons and the face value upon maturity.
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Old 12-02-2020, 07:35 PM   #9
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If you don't plan to use the money and just want a safe place to park it "forever," and with periodic income, then you could place a noncompetitive bid for the 30 year Singapore Government Security which is being auctioned this month (February, 2020). The issue code is NA20100F. If market interest rates don't change between now and the auction date it'll yield just over 2.0%.

Singapore Government Securities are backed by the full faith and credit of the Government of Singapore. There is no safer Singapore dollar-denominated asset. These bonds have the most liquidity on the secondary market, but there's still some bid-ask spread and some costs involved in selling your bond if you want to sell it before maturity. And of course there's no guarantee that your bond will fetch any particular price on the secondary market. The Government of Singapore only guarantees payment of coupons and the face value upon maturity.
thanks for the info. Will also look at this.
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Old 12-02-2020, 07:51 PM   #10
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yes.

as i do not need the 400k, eEasy by TIQ offer 2+% for 6 years. But I can only put 150k (75k 2 person) into it to be 100% safe. My question is whether there is other better deal out there

I believe in efficient market. I do not want to predict the interest rate these few years.
A new plan by aviva 3 years. 2.28%/year accumulating. End of 3 years 107%. This 2 days busy running around meeting clients for this.
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Old 12-02-2020, 08:20 PM   #11
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If you have used Ordinary Account dollars then you can repay them, plus accrued interest, and earn 2.5% interest on the redeposited funds. If you are age 55 or older, or nearly so, then these dollars are highly liquid.

The 2.5% interest rate is not technically guaranteed, but it's a floor rate that the government has paid even through a couple financial crises. So I think it's quite reliable, and it's even pegged to increase automatically if market interest rates should surge. CPF assets are uniquely well protected against creditors and court judgments, too.

There are other possible CPF-related deposits that may be available, but this possibility is the most likely to be able to absorb a ~$400K sum.

Boredboiboi, Aviva's MySecureSaver II has the same SDIC coverage limit problem that Lordofthering has already criticized.
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Old 12-02-2020, 08:29 PM   #12
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I see another possibility: a Temasek general obligation bond from the secondary market. For some strange reason Bond Supermart has the Temasek 4.2% coupon bond maturing on August 2, 2050, listed with a "Yield to Worst" of 3.059%. The ISIN for that bond is SG7W86960343. That's really rather good, I think.

So what that'd mean is that you'd pay approximately S$307,455 for this bond. Then, over the next 30 years, it'll pay S$5,250 every 6 months and then S$250,000 at maturity -- in other words, it'll kick off a fixed nominal income stream equivalent to S$875 per month, but you have to pay a ~22% premium over the face value for the privilege, which is really quite fair in the current interest rate climate. Check all these details, please, to make sure I'm correct, and what the purchase costs are via Bond Supermart.

It's a S&P AAA rated bond, and there's nothing higher quality in the Singapore dollar bond market except for Singapore Government Securities. It's a "lumpy" bond because it has a face value of S$250,000. You have to be an Accredited Investor to buy it, meaning your total net worth has to be something like S$4 million minimum as I recall. Same deal in terms of resale (possible, price depends on the market), although this bond is less liquid than Singapore Government Securities so the bid-ask spread should be wider if/when you try to sell it before maturity.

This bond is not callable before maturity, so the YTW is the yield. It's an unsecured bond, but it's senior, and it's genuinely Temasek. I think they're good for it.

There are shorter maturity Temasek bonds available, but there seems to be a significant enough yield premium with that one to make it rather attractive, in my view.

Last edited by BBCWatcher; 12-02-2020 at 08:33 PM..
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Old 12-02-2020, 11:17 PM   #13
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I checked.

SDIC cover up to 100k for endowment and it based on surrender value.

For year 1, etiqa eeasy only offer 2000 surrender value. So if it fail in first year, you only get back 20% of the money

seems to be not worth it for the low interest
capital is guaranteed after 4 years
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Old 13-02-2020, 12:03 AM   #14
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Is there any reason why you are not looking into fixed income investment?
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Old 13-02-2020, 12:14 AM   #15
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thanks BBC for your informative post. I think I look at it and decide.

@Sai777, The fixed deposit is actually to make my wife feel more secure. She only know about FD. If I were alone, I would dump everything into stocks.
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