Saturday, April 9, 2011

Standard Chartered's 24-Month Step-Up Interest Time Deposit

In recent years, the interest rate on savings account has been dismal.  Same goes for fixed deposits.  The prevailing interest rate for savings account is a great total of 0.1% p.a., it looks so pathetic in an environment of 5.5% inflation rate!  

Anyway, good company with good dividends actually can give you much better returns, but if you are the super safe, risk-averse type of person, then maybe you should consider this 24-month step-up time deposit offered by Standard Chartered Bank.  

Basically you need to deposit a minimum of S$10,000.00, then the money will be locked in for 3 months, at an interest rate of 0.5% pa.  Interest will be paid at the end of 3 months.  If you decide to withdraw your deposit within the first 3 months, you have to pay a penalty of S$250.  After the first 3 months, you will be free to withdraw at any time, without paying the penalty (but you may lose your interests earned since the last interest payout date).  

For details, you can take a look at their interest table here.  Please note that if you leave your money in this account for the full 24 months, you will get an effective interest rate of only 1.025% pa.  This is way higher than the savings account interest, but then still way below the inflation rate.  This account will not help you beat inflation, this account is only good for you to park some of your unused funds temporarily, without losing too much to inflation.  

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