Fixed Deposit maturing - where else to stash $75k

[bermudas]

Thanks all for the reply, I am more inclined to go with CIMB fastsaver - not as good as UOB One account in terms of interest rate but at least it's hassle free without any conditions.

Haha this earns pittance for ur 75K SGD.

 

[highsulphur]

Cpf...thank me later

 

[testingabc]

Haha this earns pittance for ur 75K SGD.

well it's free and easy and even if you put less than $500 won't deduct and close bank account. I agree with his choice.

 

[jnashville]

So why the cash hoarding? Why not push this cash into your long-term investment stream?

What if the long term investment stream lose money in the long run? The money will be exposed to risk isnt it? Because no one can guarantee.

 

[qhong61]

Cpf...thank me later

There is a max we can top up OA?

 

[BBCWatcher]

What if the long term investment stream lose money in the long run? The money will be exposed to risk isnt it? Because no one can guarantee.

That's a remote possibility. However, with high confidence we can say that at best this S$75,000 will only maintain its real purchasing power in a fixed deposit, ordinary bank account, or similar. Given that there is this opportunity cost associated with holding cash, a prudent investor manages cash levels appropriately along with the rest of her assets. Desired and required cash levels can vary, but it is certainly possible to have too much cash with too heavy an opportunity cost incurred.

There is a max we can top up OA?

Yes. Because you cannot contribute solely to OA (or top up solely OA), the maximum is zero except if you used OA for education or housing, in which case the limit is the amount of OA you withdrew plus accrued interest.

It doesn't usually make much financial sense to repay OA unless and until you've exhausted your other available ways of injecting cash into your CPF accounts, because all your other CPF accounts (MA, SA, and RA if you have one) are higher yielding than OA.

 

[ringrain_78]

Cpf...thank me later

No, as I mentioned, I value liquidity - never know what will happen in the next few months and to anticipate some good value property, or move overseas for opportunities.

 

[ringrain_78]

That's a remote possibility. However, with high confidence we can say that at best this S$75,000 will only maintain its real purchasing power in a fixed deposit, ordinary bank account, or similar. Given that there is this opportunity cost associated with holding cash, a prudent investor manages cash levels appropriately along with the rest of her assets. Desired and required cash levels can vary, but it is certainly possible to have too much cash with too heavy an opportunity cost incurred.

I have to agree with you on opportunities costs of holding too much cash. I had same discussions with many wealth managers about this too. For me and wife, we have diversions in short-long term plans. I would consider some of our endowment plans when we bought when we start working as mid terms since maturity is ranging 7-12 years more. Longer term - like retirement plans will kick in about 15-18 years from now, so we should have a stable sum from now +8 yrs time.

So between now to 7/8 years, we have 2 other FDs maturing in end 2020 and 1 more in mid 2021. Due to the uncertainty now, we are putting off a property purchase until end 2020 or until 2021, speculating some cheaper buys, especially for 8-12 yrs old condo units. This current end June FD - we have no use for the cash, so can put back into a very short term / low risk instrument for 3/6/9 months.

We spoken to some wealth managers - to start earning something, 3-9 months might be too short to cover their fees unless we do high-risk stuff. Some of the counters they recommended me in Dec 2019 are so bad now that I can only count my lucky stars then.

 

[twinklingstars]

My FD is maturing in Aug, current bank rates are pretty low, i'm considering putting the money in higher interest plans which are of a longer term ..

 

[bermudas]

well it's free and easy and even if you put less than $500 won't deduct and close bank account. I agree with his choice.

Ok alright. Happy can liao.

My FD earned 8600 RM in first yr and gonna be 7301 RM for 2nd year maturing next mth. And this is based on slightly lesser than 75K SGD.

My other 2 FDs in SG banks are earning way lesser IR.

 

[advocate]

Thanks all for the reply, I am more inclined to go with CIMB fastsaver - not as good as UOB One account in terms of interest rate but at least it's hassle free without any conditions.

Citibank MaxiSave isn't bad too. Rather high interest rate for a savings account and you still have liquidity whenever you need it.

 

[testingabc]

Citibank MaxiSave isn't bad too. Rather high interest rate for a savings account and you still have liquidity whenever you need it.

Online did not say Maxisave rates. is it better than CIMB Fastsaver? I only know Maxigain only but the interest drops so bad

 

[Dystopia]

10k put singlife

the rest 65k ..

FD.... put in ICBC. still got 1.25%

else dump all in elastiq 1.8%

or some other endowment plans for a little higher

or just invest spare into stocks

 

[ringrain_78]

10k put singlife

the rest 65k ..

FD.... put in ICBC. still got 1.25%

else dump all in elastiq 1.8%

or some other endowment plans for a little higher

or just invest spare into stocks

Just checked ICBC 1.25% p.a. would be for 6 months. I think CIMB fastsaver is better with 1.80% for 75K for 6 months. It is on par with elastiq without any conditions.

Else, I don't think the rest will make sense for a very short term of 3-6 months, right?

 

[Dystopia]

Just checked ICBC 1.25% p.a. would be for 6 months. I think CIMB fastsaver is better with 1.80% for 75K for 6 months. It is on par with elastiq without any conditions.

Else, I don't think the rest will make sense for a very short term of 3-6 months, right?

bro..
CIMB is not entirely 1.8%
u have to see carefully... IIRC... effective ard 1.3+ for 100k

u go the cimb thread look see better..

 

[cscs3]

Online did not say Maxisave rates. is it better than CIMB Fastsaver? I only know Maxigain only but the interest drops so bad

I think he is referring to maxi gain. Yes drop a lot but still reasonable until it get revised again.

 

[Garlic & Butter]

u can check this link forFD rates compilation

sgfd.neocities.org

 

[ringrain_78]

bro..
CIMB is not entirely 1.8%
u have to see carefully... IIRC... effective ard 1.3+ for 100k

u go the cimb thread look see better..

Yes, you are right - theirs is a stepped rate - thanks for the correction.

 

[testingabc]

I think he is referring to maxi gain. Yes drop a lot but still reasonable until it get revised again.

Still reasonable?

At counter 12 now after 1 YEAR: 0.5x0.24+0.6 = 0.72%
At counter 1 now: 0.5x0.24 = 0.12% (min 70K)

Rather put CIMB Fastsaver fuss free 1.325% with 100K

 

[BBCWatcher]

Also please bear in mind that Singlife, CIMB FastSaver, Citibank MaxiGain, UOB One, OCBC 360, DBS Multiplier, and several other offers are only offers today. All of these financial institutions can change their interest rates any time they wish. And they surely will if/when market interest rates decline further.

ELASTIQ is offering an insurer guaranteed return for 3 years. A fixed deposit, such as ICBC's, is offering a bank guaranteed return for the fixed deposit's term (e.g. 6 months). Singapore Savings Bonds offer a schedule of government guaranteed returns for 10 years. These are very different offers because of the forward guarantees.

That's why I highly recommend not dragging too much cash for your particular circumstances. If/when market interest rates fall the prices on long-term investments will probably go up, ceteris paribus. You're not going to be the only one upset with low yields, and you'll be competing with even more people to chase higher projected yields, meaning you'll drive up the prices (and lower the yields) on those alternative vehicles. This phenomenon is also part of the opportunity cost involved in dragging too much cash for too long. (Of course it's a "happy problem" to have too much cash.)