Best Interest Rate Deal
>> Saturday, March 3, 2012
By now, many would have seen the advertisement of standard chartered bank BonusSaver splashed across the newspapers and internet.
They are giving 1.88%p.a. interest, when $500 is spent through mastercard each month.
Well, doing some calculation on my own and comparison, it wasn't a deal that was very attractive to me as I could achieve the about the same returns through other banks, without the $500 spending criteria.
Anyway, what attracted me was not this. It was the finer print of giving $100 for placing an initial $50,000. This intrigued me and I went to ask the terms and conditions for this.
I was told there was no other terms and conditions! All I have to do was place $50,000, wait to be credited the $100 and I can withdraw everything. Though I realized that the account cannot be closed within 6 months and has a minimum maintenance balance of $3,000.
It still sounds like a good deal to me. In addition, you can join the preferred programme at no extra charge as you meet the $50,000 deposit criteria and they will give another $80.
A quick calculation. Assuming I only need to maintain the $50,000 for one month. "Interest" or cashback received is $180. 180 / 50000 = 0.0036, converting, 0.0036 * 12 = 4.32%p.a.!
As the government guarantees the first $50,000 in deposits. I would say this is a risk free return for one month. Any fixed deposit can match this?
Am I overlooking anything? Hope someone can point out to me if I missed anything important. Thanks.
5 comments:
Care to share how could you achieve the same effective interest rate from other banks without the spending criteria? Thanks.
May I know how would you achieve the same interest rate from other banks?
Thanks.
Well, based on what you have mentioned, it does look like a no-brainer to get that 180 bucks if you can set aside 50K for a month.
But the calculation of effective 4.32% pa is not appropriate as you can't possibly repeat it 12 times!
Hi Raymond. I shared that in a previous post. Can't rem where now.
Hi GYM. I too would wish to enjoy that rate all year long. But rates are all stated as pa for comparison. Like 3 months or 3 years fixed deposits, in fact, even loans. It is the standard convention used rather than absolute return that is very relative.
However, Wells Fargo customers can have the fee waived if they maintain a $1,500 minimum daily balance or make direct deposits of $500 or more, and they can get a $2 discount on the fee by opting to receive only online statements, according to published reports. Wow, when did banking get so conditional?
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