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The Best Interest Rate This Xmas

>> Friday, November 25, 2011

Walked past a HSBC roadshow recently, and they were offering 0.9% p.a. interest on a SGD 3 month time deposit. That is way higher than most banks for such a short duration fixed deposit (FD). In addition, they are giving a limited edition HSBC NETS CashCard pre-loaded with up to $500.

Just a side track question, what in this world is not "limited edition"? Once something stops production, it is also "limited edition", what realistically lasts forever in the physical world? Will this NETS CashCard be worth more in future?

Anyway, let's get back to talk about the tangibles, like reading the * Important note and "up to".

Well, I do not qualify for the Premier class, so I'll stick to review the Advance class. It offers a 0.8% p.a. rate for the same SGD 3 month FD. It gives a $28 CashCard (reasonable to equate to cash) for fresh funds of $25,000.

Therefore, using PV = 25,000 - 28 = 24,972 ; FV = 25,000 * ( 1 + 0.8% / 4 ) = 25,050 ; PMT = 0 ; RATE = 1.25% p.a.!

Now that is indeed a sweet rate for placing my liquid, emergency cash. Definitely more T&Cs to look out for, like this statement in especially small font: "In the event that the HSBC Advance account is closed within 12 months from 31 December 2011, the Bank reserves the right to impose a fee equivalent to value of the Gift issued."

All things considered, it is not a bad deal to me. In case I need the funds, I just lose the interest, if after 3 months, I just lose the $28 as a penalty and still enjoy the 0.8% interest.

Anyone have any better suggestions?

4 comments:

patrick lim November 25, 2011 at 1:53 PM  

just like u, i reckon 'limited edition' may not be the right english terminology because everything under the sun is limited, including one's life expectancy.

Lau November 26, 2011 at 10:29 AM  

Hi Patrick, haha, yes, just poking fun at marketing gimmicks that use fancy terms. Unless there is future appreciation potential, limited edition only makes it less valuable as it doesn't deserve to last long.

Anonymous November 30, 2011 at 6:48 PM  

CIMB also give 0.8% with min deposit of $5000 and every month top-up another $500.

Lau December 1, 2011 at 9:17 AM  

Hi. Yes Cimb is still going amazingly strong at 0.8% while most others are 0.05%.. I use for my liquid daily transaction funds. Thanks for pointing out.

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