FD for USD 3.3% by UOB

[sgboy85]

Guys anyone tried deposit fresh fund and FD in USD? Any gimmick? Why so good 3.3%?

 

[RouK3ziLa]

cause us money market is at around 3.5% and 30Y at 5%

 

[sgboy85]

cause us money market is at around 3.5% and 30Y at 5%

Then who will save in sgd? Is save in usd common? Thinking of transfering all my OCBC bonus+ 1% to usd

 

[mgx-alander]

Careful of forex risk

 

[weiess]

FYI
https://growbeansprout.com/insights...nds-a-good-alternative-to-usd-fixed-deposits?


Here are a few things you'd need to know about a foreign currency fixed deposit account

• There is a foreign currency conversion fee charged whenever you convert SGD to foreign currency and vice versa. Spoiler alert: This fee is not cheap.
• You will need a multi-currency account to deposit your funds in foreign currencies.
• You might not get a return of 3.90% p.a. if you are looking to convert your funds in foreign currency back to SGD.

 

[DragonFire]

Then who will save in sgd? Is save in usd common? Thinking of transfering all my OCBC bonus+ 1% to usd

You are tanking the forex risk. Look at the currency fluctuations over the years.
Well balanced investors will spread the risk across multiple currencies instead of making all-in moves.

Consider local liquidity because ultimately you live here and have local expenses. It sucks having to tank poor rates if you need to liquidate a foreign currency investment on short notice because you ran out of local liquidity.

That said, USD v SGD is nearly at historical highs in favor of SGD to USD conversion. Make what you will of what that means.

It is usually a one way street for investors btw. When we move money to USD, it generally stays as USD and is kept that way so we can make USD investments without converting more local currency.

Some of us play with the currency pairing market to average down conversion costs and maybe make some gains on the side instead of one-time showing hand.

 

[Rathcycle]

If usd and sgd hits parity within a decade, all interest is wiped out.

 

[iduncheckmail]

dont convert just for the sake USD short term rates.
The fx move the wrong way when you need the money, can just wipe away all the int gains.

convert only if you wana invest in US shares, then if you have spare from shares sales , leave it in MMF for that 3.5%, so you can hedge some fx loses if any, with the higher interest (vs keeping in SG savings acct).

 

[Roundtreex]

Our SGD is considered safe haven. 1% is justified.
US is drowned in debt. 3.5 to 5.5% if you believe they would not print to devalue

 

[cunning]

Meaning USD is going to lose it's value over the longer term. You're more likely to suffer forex losses.

 

[ToonBlue]

Guys anyone tried deposit fresh fund and FD in USD? Any gimmick? Why so good 3.3%?

For a moment I thought is SGD....

TS 3.3% in USD not something special lah

 

[Acetone]

Cos it’s in USD

 

[standarture]

You have to convert to USD first lol. Bank is not going to convert for free.

 

[wutawa]

r u going to open a similar thread every week?
https://forums.hardwarezone.com.sg/threads/time-deposit-in-usd.7204174/

 

[BBCWatcher]

Guys anyone tried deposit fresh fund and FD in USD? Any gimmick? Why so good 3.3%?

As many other posters have explained, UOB is likely to charge you a hefty markup for converting currencies. All for the "privilege" of earning a lower interest rate in an uninsured deposit than what comparable tenor U.S. T-bills are yielding.

In short, if this sort of offer interests you — because you're planning a trip to Disney World in Orlando, for example, and you'll need some U.S. dollars to spend later this year — head over to your favorite low cost broker. (Interactive Brokers Singapore is one example.) Check their U.S. T-bill rates and currency conversion costs. U.S. Treasuries including U.S. T-bills are the safest available option for parking U.S. dollars, 100% backed by the full faith and credit of the U.S. federal government. U.S. Treasuries held by non-U.S. persons who are tax residents of Singapore are free of U.S. income and U.S. estate tax.

 

[d5dude]

Just buy a 12mth treasury bill at 3.8% if you really want exposure to the dollar, you need to pay a bigger fx spread with the UOB fd so actual return will not even be 3.3%.

I personally wouldn’t do this because I think the new fed chair is about to shift goalposts and that is not good for the dollar or TSYs.

https://www.barrons.com/articles/kevin-warsh-federal-reserve-trimmed-mean-inflation-3a2fe515

TLDR version of the article is that warsh prefers to look at the trimmed mean, which is currently lower than the old preferred measure (PCE), remember even the PCE itself has been above the fed’s own target for 5 years now…

 

[Visor9999]

Guys anyone tried deposit fresh fund and FD in USD? Any gimmick? Why so good 3.3%?

USD 30 year yields is 5.2%

 

[limster]

1 year UST already 3.81%, hardly any reason to put money into FD yielding 3.3%.

 

[yiwei]

Oh, the UOB mightyfx exchange rate usually is quite good, I'm looking at 1SGD to 0.7822USD in the app at the moment and xe mid market rate is
1.00 SGD = 0.78242078 USD

but ya, putting FX fixed deposit will always carry more risk, so DDODD.

 

[BBCWatcher]

Oh, the UOB mightyfx exchange rate usually is quite good, I'm looking at 1SGD to 0.7822USD in the app at the moment and xe mid market rate is
1.00 SGD = 0.78242078 USD
but ya, putting FX fixed deposit will always carry more risk, so DDODD.

That's decent by bank standards, not great by low cost brokerage standards.

Seriously, just go compare with U.S. T-bills via a low cost broker. You can buy and sell U.S. Treasuries rather easily nowadays if you want to park U.S. dollars for any period of time you wish. You can even place limit orders if you only want to buy or sell at specific prices/yields. At original issue U.S. Treasuries range from 4 week T-bills to 30 year bonds. You also have the option to buy and sell U.S. Treasury Inflation-Protected Securities (TIPS) which are available in 5, 10, and 30 year maturities at original issue. TIPS are inflation-indexed (a.k.a. real return) bonds, meaning their yields are pegged to the U.S. Consumer Price Index (CPI).

Individual U.S. Treasuries are completely U.S. tax free (for non-U.S. persons who are tax residents of Singapore), they're the safest available vehicles for holding U.S. dollars, AND the yields are higher than what banks in Singapore are offering on uninsured U.S. dollar deposits. What's not to like?

Every adult living in Singapore should have access to U.S. Treasuries through low cost brokers. However, some Singapore residents may also have these choices available:

• If you have a U.S. Social Security Number (SSN, which is yours for life — even if you got one as an international student 20 years ago in the U.S.) and a U.S. bank or U.S. credit union account, you may be eligible to buy U.S. Treasuries and U.S. Savings Bonds directly through TreasuryDirect.gov. (Series I U.S. Savings Bonds are pretty interesting, actually.)
• Your favorite low cost broker might offer other low risk ways to park U.S. dollars, notably "brokered CDs" (Certificates of Deposit). Brokered CDs are equivalent to fixed deposits. Your broker arranges the CD with a U.S. bank or U.S. credit union, and the yield you see is the yield you get. CDs enjoy deposit insurance of at least US$250,000. Brokered CD yields can be higher than comparable U.S. Treasury yields.