Structured Deposits

[NovY11]

Hi

New to Investments. Anyone invested in Structured Deposits in any bank? I checked UOB , it says 100% principal amount guarantee and total guarantee minimium interest of 9.75% over 5 years and 11 months for UOB Structured Deposits 2016 (Series 8) and maturity variable interest of up to 3%.

Is this better return than Fixed Deposits? Is there any fees chargeable by the bank?

 

[Shiny Things]

Hi

New to Investments. Anyone invested in Structured Deposits in any bank? I checked UOB , it says 100% principal amount guarantee and total guarantee minimium interest of 9.75% over 5 years and 11 months for UOB Structured Deposits 2016 (Series 8) and maturity variable interest of up to 3%.

Is this better return than Fixed Deposits? Is there any fees chargeable by the bank?

So I used to be on the other side of this; I built structured deposits for the banks I worked at, and I can tell you that they're always a terrible deal. They make tons of money for the bank, they're impossible for the end buyers to understand... they're just bad.

Let's take a look at this one. You could buy a six-year SGS bond that yields about 1.9% (yields have rocketed higher in the last couple of weeks, two weeks ago this thing was yielding 1.4%); that works out to about 11.25% guaranteed over five years and 11 months. Or you could buy this thing that has a lower guarantee and maybe, in some circumstances, might give you more money than just a simple government bond?

And if you need the money sometime in the intervening six year period, UOB will charge you a truckload to unwind the deposit - as much as 5% in fees, which eats up nearly three years of interest! But if you bought an SGS bond instead, you could sell the bond straight away with hardly any fees and have the money just as quickly.

Stay away from structured deposits. They're always a bad deal.

 

[unhinged_loon]

So I used to be on the other side of this; I built structured deposits for the banks I worked at, and I can tell you that they're always a terrible deal. They make tons of money for the bank, they're impossible for the end buyers to understand... they're just bad.

Let's take a look at this one. You could buy a six-year SGS bond that yields about 1.9% (yields have rocketed higher in the last couple of weeks, two weeks ago this thing was yielding 1.4%); that works out to about 11.25% guaranteed over five years and 11 months. Or you could buy this thing that has a lower guarantee and maybe, in some circumstances, might give you more money than just a simple government bond?

And if you need the money sometime in the intervening six year period, UOB will charge you a truckload to unwind the deposit - as much as 5% in fees, which eats up nearly three years of interest! But if you bought an SGS bond instead, you could sell the bond straight away with hardly any fees and have the money just as quickly.

Stay away from structured deposits. They're always a bad deal.

Aren't SGS bonds like 100,000 a pop? Kind of hard for most people to buy.

 

[cscs3]

Better stay away from this kind of product.

 

[antvest]

OCBC structured deposit

Not sure if anyone still reads this... but I will try to post.

I've read on HWZ that generally, most do not support structured deposit. I even read one forum here that says in the last year, no interest could be paid out.

For savvy investors, I understand they will think Fixed Deposit and Structured Deposits are rubbish as they will try to get higher returns from their other investments.

But what if one wants a safe investment for extra cash that is not for riskier investments?

OCBC has a structured deposit now that is not only capital guaranteed but also interest guaranteed. Is this recommended?

Thanks for any input!

 

[shareholder]

If you go to the ocbc website it says this
In some situations, you may not get any interest payout for some or all interest payment periods.
http://www.ocbc.com/personal-banking/investments/structured-deposits.html

 

[antvest]

If you go to the ocbc website it says this
In some situations, you may not get any interest payout for some or all interest payment periods.

Yes, that's right. I did see it also.

When I enquired the OCBC staff, they told me it's interest-guaranteed and this will be stated in the product sheet. Said something like the structured deposit is not investing in equities or forex so it's less risky and that's why the bank will guarantee the payouts.

I am still a bit hesitant as I am not sure if they are telling me 100% what I should know.

 

[OCBC Bank]

Yes, that's right. I did see it also.

When I enquired the OCBC staff, they told me it's interest-guaranteed and this will be stated in the product sheet. Said something like the structured deposit is not investing in equities or forex so it's less risky and that's why the bank will guarantee the payouts.

I am still a bit hesitant as I am not sure if they are telling me 100% what I should know.

Hi antvest,

We came across your post and though to offer some assistance.

Could you PM us the branch you visited and your contact number so that we can make arrangements for our consultants to call and advise?

^WX

 

[BBCWatcher]

When I enquired the OCBC staff, they told me it's interest-guaranteed and this will be stated in the product sheet.

Fabulous. So where's that guarantee, in writing? The staff should be able to send you that document for review if it exists. If it doesn't exist, at least make sure they agree to serve you some complementary coffee and cakes at the branch before you say no.

 

[tiertime]

Yes, that's right. I did see it also.

When I enquired the OCBC staff, they told me it's interest-guaranteed and this will be stated in the product sheet. Said something like the structured deposit is not investing in equities or forex so it's less risky and that's why the bank will guarantee the payouts.

I am still a bit hesitant as I am not sure if they are telling me 100% what I should know.

Hi i also saw an OCBC structural deposit for 6 years at 12.45%...

Initially i thought it was 12.45%p.a.
then i realised its averaged out to only 2.07p.a.

the interest is pathetic considering we can already get ard 2-3% for savings accounts

 

[shareholder]

Yes, that's right. I did see it also.

When I enquired the OCBC staff, they told me it's interest-guaranteed and this will be stated in the product sheet. Said something like the structured deposit is not investing in equities or forex so it's less risky and that's why the bank will guarantee the payouts.

I am still a bit hesitant as I am not sure if they are telling me 100% what I should know.

If you don't need the money for the whole tenure and ok with the returns, then can consider. Make sure to ask for any exceptional cases where the returns or capital is not guaranteed such as collapse of underlying assets. Personally, prefer fd because can break anytime to invest in shares.

 

[antvest]

Fabulous. So where's that guarantee, in writing? The staff should be able to send you that document for review if it exists. If it doesn't exist, at least make sure they agree to serve you some complementary coffee and cakes at the branch before you say no.

Thanks for the advice.

 

[antvest]

Hi i also saw an OCBC structural deposit for 6 years at 12.45%...

Initially i thought it was 12.45%p.a.
then i realised its averaged out to only 2.07p.a.

the interest is pathetic considering we can already get ard 2-3% for savings accounts

2-3% is high for savings account. Do you mind sharing which one you are referring to? Thanks....

 

[antvest]

If you don't need the money for the whole tenure and ok with the returns, then can consider. Make sure to ask for any exceptional cases where the returns or capital is not guaranteed such as collapse of underlying assets. Personally, prefer fd because can break anytime to invest in shares.

Yes... true about FD. Problem is for this period, FD interest is really low, averaging 1% p.a. or so, with some banks giving even less.

This 6 yr one by OCBC looks ok for those who do not need to use the extra cash for that tenure. Then again, 6 yrs is not exactly a short period of time. There could be another 1 or 2 financial crisis and one can make a lot more than 2% through other forms of investment.

Another downside is that interest rate might go up in the next few years and those who lock in at the OCBC 2% today will be at disadvantage. I read someone bought a similar OCBC 6-yr structured deposit 3 years ago at only 1.3% p.a. He is already losing out now.

Pros and cons I guess.... Probably good for retirees who want peace of mind.

 

[antvest]

Nice to know that OCBC does read Hardwarezone!

I will forward my query directly to OCBC head office for clarification. Thank you.

Hi antvest,

We came across your post and though to offer some assistance.

Could you PM us the branch you visited and your contact number so that we can make arrangements for our consultants to call and advise?

^WX

 

[Perisher]

2-3% is high for savings account. Do you mind sharing which one you are referring to? Thanks....

DBS, OCBC, UOB, BOC all have such products but not easy to fulfill their criteria. Lower than 2% can look at SCB and CIMB.

 

[OCBC Bank]

Nice to know that OCBC does read Hardwarezone!

I will forward my query directly to OCBC head office for clarification. Thank you.

Hi antvest,

We are on Hardwarezone, Twitter, and Facebook from Mondays to Fridays (excluding Public Holidays), 9am to 8pm.

Should you require any assistance, please feel free to contact us.

^DG

 

[lzydata]

Hi antvest,

We are on Hardwarezone, Twitter, and Facebook from Mondays to Fridays (excluding Public Holidays), 9am to 8pm.

Should you require any assistance, please feel free to contact us.

^DG

Not bad, longer than branch hours

 

[unhinged_loon]

Not sure if anyone still reads this... but I will try to post.

I've read on HWZ that generally, most do not support structured deposit. I even read one forum here that says in the last year, no interest could be paid out.

For savvy investors, I understand they will think Fixed Deposit and Structured Deposits are rubbish as they will try to get higher returns from their other investments.

But what if one wants a safe investment for extra cash that is not for riskier investments?

OCBC has a structured deposit now that is not only capital guaranteed but also interest guaranteed. Is this recommended?

Thanks for any input!

You mean SGS, AAA rated bonds from the SG government are less safe than DBS/UOB/OCBC?

You can buy SGS (including SSBs) using the ATM or internet banking (with a CPD account). You don't need to know much about bonds to buy sovereign bonds.

 

[Weaboo]

DBS, OCBC, UOB, BOC all have such products but not easy to fulfill their criteria. Lower than 2% can look at SCB and CIMB.

what criteria???