Hi, i intend to shift my S$100k OCBC bonus+ out to BOC time deposit.
BOC currently having this 3.8% for 12 months TD. 1.4% for SGD.
Its much better then OCBC Bonus+ 1.1% wef June.
Any idea why USD have higher Interests? Any gimmick for such high interests?
There's a threshold question here for evaluating whether these offers are worthwhile: for what purpose(s) would you be hanging onto S$100K (or more?) in a fixed deposit? To pay for a wedding ~13 months from now?
because it's actually US treasury bonds
Note that you should be able to buy a 52 week U.S. T-bill directly (via a broker such as Interactive Brokers) if that's what you want to do. Then it's 100% U.S. federal government guaranteed and literally the safest available way to park U.S. dollars, unlike a foreign currency deposit in Singapore which is only BOC (Singapore) guaranteed. And you don't need to pay what's likely to be BOC's comparatively high currency conversion costs. You'd pay IB's lower currency conversion rates instead.
1.4% p.a. for a 12 month SGD fixed deposit doesn't look that terrific either. You might find a broker that can sell you a comparable maturity Singapore Government Security with a similar yield to maturity.
We seem to be in the midst of a spurt of consumer inflation, so I think it's reasonable to assume that a 1.4% SGD 12 month fixed deposit (or comparable SGS) will lose real purchasing power over the holding period. The U.S. dollar fixed deposit (and comparable U.S. T-bill) could stay a little above water, but that's really going to depend on how it translates back to real Singapore-oriented purchasing power (the roundtrip exchange rates). But if for example you're planning to buy a wedding
in Hawaii ~13 months from now, a 12 month U.S. T-bill could be a very reasonable thing to buy.
