Structured Deposits

[unhinged_loon]

I think these new breed of capital-and-interest guaranteed SDs would appeal to layman investors who are looking for a low-risk and easy-to-understand product. They are more directly comparable to fixed deposits and SSB, offering slightly higher returns with correspondingly slightly higher risks.

Don't think they should be compared to SGS bonds, which are positively arcane to purchase for a novice investor.

You can buy SGS from the ATM. Same goes for SSB. They are debt instruments. You lend your money to the government. You get regular interest returns. At the end of the tenure, you get back your principle.

Do you, or the regular mom-and-pop citizens know about the instruments underlying structured deposits? Has anyone asked? Has anyone gotten answers from the bank representatives? How the heck is "ignorance is bliss" better?

 

[unhinged_loon]

Thanks guys for the detailed explanation. I see a couple of academic terms being used but I feel the topic has been a tad over-analyzed.

You are confusing academics with professional work. Credit ratings are not something college professors care about. Bankers do. We are not operating out of ivory towers here. If anyone is, it's my economist friend who teaches in a university. BTW, all I have done is just read some stuff off the internet and attended a bunch of financial literacy workshops.

Yes, we have a crap retail (bond) market; there is a distinct lack of good instruments that offer higher than FD rates at longer tenures.


Leaving risk premiums aside, structured deposits lack liquidity compared bonds (even with such a crap local bond market). You can redeem SSBs and get your full principle (not a penny less) back within a month (and apparently even the year's interest pro-rated!). Other SGS (1, 5, 10 year etc.) are more admittedly trickier since it is better to sell through SGX via a broker*, and due to changes in interest rates, the sell price may reduce (or increase!) the principle slightly. Nevertheless, the amount you get is transparent because you can check the trading prices on SGX.

On the other hand, redeeming a structured deposit before the end of tenure gives you NO guarantee on the principle **. In other words, for a 6 year SD, the money cannot be touched for 6 years. The amount you get back from premature redemption of a SD is NOT transparent. You just get what the bank gives back to you. The interest rates offered are just not attractive from the perspective of risks and liquidity.

I cannot put a portion of my emergency funds inside; if I can wait for a month, I can put some inside SSB and be able to get back my principle. I cannot put my investment war chest inside it either. Money being set aside for retirement have a far longer horizon than 6 years and are other instruments are better suited for it. There are very few scenarios where SDs are a good choice.

Ok, if young people want to put retirement money into SDs, they can go ahead...



* Before anyone complains about the process, there are people clueless about share dabbling into them (and losing money in the process). Hence getting a CDP and a brokerage account are not amazing difficult things that regular people don't know how to accomplish.

** Unless it gets recalled by the bank, but that is not a time of your choosing. They usually do this when interest rates are dropping, so that they can offer newer products at lower rates.

 

[Asphodeli]

I think these new breed of capital-and-interest guaranteed SDs would appeal to layman investors who are looking for a low-risk and easy-to-understand product. They are more directly comparable to fixed deposits and SSB, offering slightly higher returns with correspondingly slightly higher risks.

Don't think they should be compared to SGS bonds, which are positively arcane to purchase for a novice investor.

absolutely rubbish, SGS and SSBs are the easiest to purchase, no KYC required from the bank, and low minimum investment amonut ($1k for SGS, $500 for SSB).

 

[OCBC Bank]

TELL YOUR OLD MOM AND DAD

Personal finance consultant introduced OCBC SD to my mom after her FD matured. The SD was introduced to mother as "SD is FD with higher yields due to long 6 year lock-in".

I had to grill the consultant to get truth. What the financial consultants do not tell you when they "introduced" their cheesepie 6 year Structured Deposit.

That they will collect and document your personal information in their system AFTER they made you sign and pen a number of paper documents: such as how much is your monthly income, what is your job, how much is your cpf, how much is your expense, how much your total wealth included those from other banks.

I was super close to yelling "ma-de" what has my personal asset to do with ocbc? You are not IRAS ok. Other institutions doing FD never collected such info. But the ocbc consultant said starting from now, all major banks will start collecting this info for FD. Chow Liar. He also said I cannot "anyhow put" a random figure for the SD because "cannot be you earn only $500 and you want take up a $50K SD?"


And it raised my spider sense. Because the SD is paid with cold hard cash. What has it to do with ocbc even if I earn $500 as long as I can throw out the full $50k cash to you? He then relented saying the bank needs to have assurance that people can withstand SD risks from their existing assets. So, if its really FD, what hell of risk was he talking about?

I squeeze hard and almost bang table to ask what the hell is the diff between a long tenure FD and a SD. He finally said SD is outside of scope of SDIC

="https://www.sdic.org.sg"

It means for normal FD, if ocbc suay suay kena collapse or funny funny mergers, sdic can help you chase back the money. But for SD, if anything happens sdic cannot help you chase back.


Nobody knows what will happen in 6 years time. What restructuring la, merger la, god knows if its another california fitness or oub.

Most of the people who are interested in FD are the senior citizens who will toot toot believe SD is FD. The penalty for early withdrawal is between 5% to 7%. The ocbc consultant said can reduce impact of penalty by taking smaller bundles. I.e 5 sets of $10k instead of 1 set of $50K. Penalty is the least of concerns compared to the littlest possibility that something will happen to the bank and government cannot help old parents chase money back.


Why are banks doing this kinda lousy sales tactics releasing only partial information to elderly? Most singaporean elderly save like hell and do not gamble. It is not right to keep silent about the SDIC and lie that SD is a form of FD.


="https://www.sdic.org.sg/SDIC/apps...browser/default/public/di_scope_of_coverage/"

How can you consultants sleep at night, withholding info, not telling customers the possible risks of what might happen within 6 years? Just because its not your money? Just because its other peoples mom and dad and not yours?

If you believe your bank will 100% stay strong after 6 years, then inform all customers the sdic portion of SD. If your sales manager tell you withholding information is ok and it is customers own fault for not doing homework first, then you better pray that idiot wont kena lightning strike for keeping mum about the possible 0.001% risk on fellow old singaporeans hard earned money.

Our old singaporean elderly would step in that bank for a FD is only to get peanut interests higher than savings. They are willing to listen to finance consultants also because these finance consultants are singaporean. You think old parents would be as trusting towards FT? Dont abuse that trust. Its sick to tip toe everywhere around fellow singaporeans.


="http://dollarsandsense.sg/3-myths-about-structured-deposits/"

Hi there,

We would like to share your feedback with the relevant department. Could you drop us a PM with your mother's contact details, the branch she visited, as well as the name of the financial consultant?

Thank you.

^DG

 

[mynickname]

Can you buy SGS or SSB with SRS?

 

[wealth_farmer]

SGS can, SSB cannot.

Can you buy SGS or SSB with SRS?

 

[taylornotswift]

Dear OCBC

I do not understand why you need me and my mother's personal information to feedback to your SD department. Are you trying to say you do not know your products? Or are you going to shift all blame to one individual personal finance consultant and act as though it is a single case?

If you think I am a flamer, go ahead and lodge a police report and I can produce all the paperwork. Instead of pacifying individuals, reflect on this SD product, seek advice from Monetary Authority of Singapore and conduct a detailed investigation. You look pretty free anyway.

I.e call up ALL our Singapore Senior Citizens who signed up OCBC SD and ask them:

• If elders were informed of SDIC by OCBC consultant before signing and FULLY understood what SDIC is and risks of OCBC SD.
• If consultants fully explained page 11/12 of your termsheet before elders signed on the various papers.
• If consultants had only flipped to page 12/12 for elders to sign without fully going through previous pages.
• If consultants told them penalty for early termination is 5-7% yet page 6/12 of termsheet suggest that penalty could be ANY amount.
• If elders were given a proper consultant that could speak clearly in native language or just a cheesepie consultant who would excuse himself with "sorry my chinese/malay/tamil" not so good but you can bring home to read after you sign.
• If consultants told senior citizens that ocbc SD is similar to FD

If majority of the senior citizens said they fully understood about SD is different from FD and the SDIC element, then I can say mine is a individual case. I believe most senior citizens DO NOT know.

Tell your top mgmt not to target our Singaporean senior citizens with this sort of gimmicky instrument. You have no idea how hard they slog. If they are into risks, they would have bought shares or forex. This is not a full capital guarantee investment. Low risk does not mean no risk and seniors ARE NOT informed of this when deciding if to commit to SD.

Hi there,

We would like to share your feedback with the relevant department. Could you drop us a PM with your mother's contact details, the branch she visited, as well as the name of the financial consultant?

Thank you.


_________________________________________________


taylornotswift wrote:
TELL YOUR OLD MOM AND DAD

Personal finance consultant introduced OCBC SD to my mom after her FD matured. The SD was introduced to mother as "SD is FD with higher yields due to long 6 year lock-in".

I had to grill the consultant to get truth. What the financial consultants do not tell you when they "introduced" their cheesepie 6 year Structured Deposit.

That they will collect and document your personal information in their system AFTER they made you sign and pen a number of paper documents: such as how much is your monthly income, what is your job, how much is your cpf, how much is your expense, how much your total wealth included those from other banks.

I was super close to yelling "ma-de" what has my personal asset to do with ocbc? You are not IRAS ok. Other institutions doing FD never collected such info. But the ocbc consultant said starting from now, all major banks will start collecting this info for FD. Chow Liar. He also said I cannot "anyhow put" a random figure for the SD because "cannot be you earn only $500 and you want take up a $50K SD?"


And it raised my spider sense. Because the SD is paid with cold hard cash. What has it to do with ocbc even if I earn $500 as long as I can throw out the full $50k cash to you? He then relented saying the bank needs to have assurance that people can withstand SD risks from their existing assets. So, if its really FD, what hell of risk was he talking about?

I squeeze hard and almost bang table to ask what the hell is the diff between a long tenure FD and a SD. He finally said SD is outside of scope of SDIC

="https://www.sdic.org.sg"

It means for normal FD, if ocbc suay suay kena collapse or funny funny mergers, sdic can help you chase back the money. But for SD, if anything happens sdic cannot help you chase back.


Nobody knows what will happen in 6 years time. What restructuring la, merger la, god knows if its another california fitness or oub.

Most of the people who are interested in FD are the senior citizens who will toot toot believe SD is FD. The penalty for early withdrawal is between 5% to 7%. The ocbc consultant said can reduce impact of penalty by taking smaller bundles. I.e 5 sets of $10k instead of 1 set of $50K. Penalty is the least of concerns compared to the littlest possibility that something will happen to the bank and government cannot help old parents chase money back.


Why are banks doing this kinda lousy sales tactics releasing only partial information to elderly? Most singaporean elderly save like hell and do not gamble. It is not right to keep silent about the SDIC and lie that SD is a form of FD.


http://="https://www.sdic.org.sg/SDI..._of_coverage/"

How can you consultants sleep at night, withholding info, not telling customers the possible risks of what might happen within 6 years? Just because its not your money? Just because its other peoples mom and dad and not yours?

If you believe your bank will 100% stay strong after 6 years, then inform all customers the sdic portion of SD. If your sales manager tell you withholding information is ok and it is customers own fault for not doing homework first, then you better pray that idiot wont kena lightning strike for keeping mum about the possible 0.001% risk on fellow old singaporeans hard earned money.

Our old singaporean elderly would step in that bank for a FD is only to get peanut interests higher than savings. They are willing to listen to finance consultants also because these finance consultants are singaporean. You think old parents would be as trusting towards FT? Dont abuse that trust. Its sick to tip toe everywhere around fellow singaporeans.


http://="http://dollarsandsense.sg/3...red-deposits/"
^DG

 

[OCBC Bank]

Dear taylornotswift,

It's certainly not our intention to target any personal individual. However, having the details will help us to check who was the staff who assisted you and your family that day.

Our service can definitely be improved on, and our service manager would like to understand what was being communicated to your mother on that day and perhaps clarify some matters.

If you would prefer that we not give your mother or you a call, we certainly respect your wishes on that. Please accept our apologies for the experience your family and you had with us, and we will share your feedback with our team.

^DG

Dear OCBC

I do not understand why you need me and my mother's personal information to feedback to your SD department. Are you trying to say you do not know your products? Or are you going to shift all blame to one individual personal finance consultant and act as though it is a single case?

If you think I am a flamer, go ahead and lodge a police report and I can produce all the paperwork. Instead of pacifying individuals, reflect on this SD product, seek advice from Monetary Authority of Singapore and conduct a detailed investigation. You look pretty free anyway.

I.e call up ALL our Singapore Senior Citizens who signed up OCBC SD and ask them:

• If elders were informed of SDIC by OCBC consultant before signing and FULLY understood what SDIC is and risks of OCBC SD.
• If consultants fully explained page 11/12 of your termsheet before elders signed on the various papers.
• If consultants had only flipped to page 12/12 for elders to sign without fully going through previous pages.
• If consultants told them penalty for early termination is 5-7% yet page 6/12 of termsheet suggest that penalty could be ANY amount.
• If elders were given a proper consultant that could speak clearly in native language or just a cheesepie consultant who would excuse himself with "sorry my chinese/malay/tamil" not so good but you can bring home to read after you sign.
• If consultants told senior citizens that ocbc SD is similar to FD

If majority of the senior citizens said they fully understood about SD is different from FD and the SDIC element, then I can say mine is a individual case. I believe most senior citizens DO NOT know.

Tell your top mgmt not to target our Singaporean senior citizens with this sort of gimmicky instrument. You have no idea how hard they slog. If they are into risks, they would have bought shares or forex. This is not a full capital guarantee investment. Low risk does not mean no risk and seniors ARE NOT informed of this when deciding if to commit to SD.

 

[oceanicmanta]

I have friends who just wanted to update passbook & got sold a 10 yr "savings" plan.

Sadly, that's the reality nowadays. Banks' "financial advisors" are lining up at the front door like vultures eyeing a kill.

@taylor the risk of SD is not just limited to the selling bank uplorry (for this case it's rather remote) but more likely the underlying risk of the structure is not adequately disclosed.

 

[nit3ex]

Anyone knows how long does it take to early terminate OCBC structured deposit and the money credited into my OCBC account?

 

[JuniorLion]

Anyone knows how long does it take to early terminate OCBC structured deposit and the money credited into my OCBC account?

OCBC loves you.

 

[cscs3]

I have friends who just wanted to update passbook & got sold a 10 yr "savings" plan.

Sadly, that's the reality nowadays. Banks' "financial advisors" are lining up at the front door like vultures eyeing a kill.

@taylor the risk of SD is not just limited to the selling bank uplorry (for this case it's rather remote) but more likely the underlying risk of the structure is not adequately disclosed.

They are just salesman. Never take up this kind of plan. For structured deposits. Bank has right to terminate but you don't have. The long term you "buy" the higher risk you get.

 

[JuniorLion]

They are just salesman. Never take up this kind of plan. For structured deposits. Bank has right to terminate but you don't have. The long term you "buy" the higher risk you get.

That post was 2 years old.

 

[nit3ex]

OCBC loves you.

So ... any idea how long does it take?

 

[cscs3]

That post was 2 years old.

Yes, but banks still offer structure deposit.

 

[OCBC Bank]

Anyone knows how long does it take to early terminate OCBC structured deposit and the money credited into my OCBC account?

Hi there,

If you are looking to withdraw the structured deposit before the actual maturity date, do drop us a PM with your bank registered contact number. We will arrange for our branch to call and advise.

^DG

 

[BBCWatcher]

If you are looking to withdraw the structured deposit before the actual maturity date, do drop us a PM with your bank registered contact number. We will arrange for our branch to call and advise.

Dear OCBC:

That's not secure. Your customer has no assurance whatsoever that somebody calling him/her on the phone is actually an employee from OCBC acting in an official capacity.

If you want a telephone conversation with your customer, fine, but the correct way to establish that line of communication is for your customer to call YOU, at OCBC's published/listed telephone number. That way your customer has high confidence he/she is speaking with a bank employee acting in an official capacity (and over a bank monitored/supervised channel), and you, the bank, can then go through your verification steps to determine whether you're speaking with your customer.

Stop encouraging your own customers to fall victim to scams. And, for anybody reading this post, if somebody calls you and says, "Hello, I'm calling from OCBC, and I'll now ask you some verification questions," HANG UP and report the call to the Monetary Authority of Singapore or on the non-emergency Singapore Police contact line, as appropriate.

This nonsense MUST stop. Shame on you, OCBC. Knock it off.

 

[nit3ex]

Hi there,

If you are looking to withdraw the structured deposit before the actual maturity date, do drop us a PM with your bank registered contact number. We will arrange for our branch to call and advise.

^DG

Hi DG,

Thank you for your reply. However, i am just asking for an approx amount of time the bank requires to withdraw money from my structured deposits to my savings account. It is as simple as that. I just need to know how long does it take? 1 day? 2 days? 3 to 5 working days?

Thank you.

 

[OCBC Bank]

Hi DG,

Thank you for your reply. However, i am just asking for an approx amount of time the bank requires to withdraw money from my structured deposits to my savings account. It is as simple as that. I just need to know how long does it take? 1 day? 2 days? 3 to 5 working days?

Thank you.

Hi nit3ex,

We apologise but for premature withdrawals, our branch colleagues would be in a better position to advise.

Let us check with the relevant department on an approximate timeline, and we will get back to you again.

^DG

 

[OCBC Bank]

Dear OCBC:

That's not secure. Your customer has no assurance whatsoever that somebody calling him/her on the phone is actually an employee from OCBC acting in an official capacity.

If you want a telephone conversation with your customer, fine, but the correct way to establish that line of communication is for your customer to call YOU, at OCBC's published/listed telephone number. That way your customer has high confidence he/she is speaking with a bank employee acting in an official capacity (and over a bank monitored/supervised channel), and you, the bank, can then go through your verification steps to determine whether you're speaking with your customer.

Stop encouraging your own customers to fall victim to scams. And, for anybody reading this post, if somebody calls you and says, "Hello, I'm calling from OCBC, and I'll now ask you some verification questions," HANG UP and report the call to the Monetary Authority of Singapore or on the non-emergency Singapore Police contact line, as appropriate.

This nonsense MUST stop. Shame on you, OCBC. Knock it off.

Hi BBCWatcher,

Thank you for the feedback.

All customers have the option of calling in to our hotline at 1800 363 3333, or write in a secured mail via Online Banking.

Alternatively, customers have the option of going on to our official social media platforms and dropping us a private message. We will ONLY request for your contact number. We will then arrange for our customer service team to call & assist.

If at any point you do not feel comfortable with the arrangement, you can always drop the line. Again, you can always call our hotline at 1800 363 3333

^DG