What?! 3.85% interest!

Yes, it's 3.85% p.a. interest. And it's not those invest $500/mth with us get 0.5% additional interest on savings, incremental savings get 0.8% bonus interest etc. The product I am sharing in this post is simply Fixed Deposit! Ok, not that simple, it is Renminbi (RMB) Fixed Deposit.

Why am I sharing this product? Because RMB-SGD has dropped to 4.9x now (nah, this is the actual rate from local money changers, can see CashChanger.co for an accurate guide) - same as half a year ago! But the difference is..half a year ago, the RMB Fixed Deposit interest was only 2.9% as compared to 3.85% now. Why I know it was 2.9%? Because I signed up half a year ago fml :(

Which Bank is offering such interest rate? ICBC! You may check out the interest rate here.  They have branches at Raffles Place, Chinatown, Paya Lebar, Jurong East, Sembawang, Simei, Punggol and Holland Village (click here to view the branches).

What are the risks? The most obvious would be the currency exchange risk. RMB may continue to slip and by the time your 1-year FD tenure is up, RMB-SGD may be >5! So, this RMB FD is good if you are able to stomach such risk and hold longer term should it be >5 when the tenure is up; or if you intend to go China for holiday one year later haha! But hey, it may go the other way round, i.e. RMB strengthen against SGD and we may see exchange rate at 4.6? When that happens, you would net currency gains (though we need to be worried about our economy when RMB strengthen too much).

Another risk I can think of is foreign currency FDs are not insured under Singapore Deposit Insurance Corporation. So please take note!

Disclaimer: these are my personal opinion and for general information only. Please seek professional advice if necessary.

Safe place to park your money?

What came to your mind first? Fixed deposit? You are not alone!

I am not sure how many of you still believe in FDs. Current FD interest rate is about 0.8% for 12mths tenure, if you put less than $10,000. One year later, you get $80 interest or less. You might do better putting your money in a normal savings account that offers bonus interest rates for salary crediting, spend on credit card, investment with the bank bla bla bla.

Many banks offer such savings account but some of us may find it a hassle to fulfil those bonus-interest requirements, e.g. your employee still issues cheque for salary! Haha! Or your savings in that account exceed the maximum limit for bonus interest. So what can you do?

Singapore Savings Bond!! Bond is a form of instrument to raise money. In return, bond holders get paid fixed interest periodically; and when the bond matures, like FDs, the bond holders usually get back the principal sum.

Why should you get interested in Singapore Savings Bond? SSB is fully backed by the Singapore Government, meaning you will get back your investment amount in full (unless something really bad happens?). Interest rate is typically higher than FD. For e.g. Feb18 bond stands at 1.55% interest for the first year which is not bad right? What’s more? The minimum investment amount is only $500 unlike FD which require at least $5000 yet offer a lower interest rate.

Still having reservations? The interest rate increase every year you continue to put your money in it. Taking Feb18 bond for example again. The interest rate is 1.59% for the second year...1.91% for the fifth year...and steadily increases to 2.75% for the tenth and final year! This mechanism encourage individual to save for long term. Ok, I heard you! Ten years seems very long, what if I need the money? Not to worry, coz flexibility is yet another advantage of SSBs. You can choose to redeem the bond anytime and get back the full amount within one month. And since the interest is only paid half-yearly, whatever interest will be pro-rated and paid to you. Very different from FDs whereby you lose all interest earned if you withdraw before maturity date.

To me, it’s a good way to start investment if you hadn’t, especially if you are afraid of the risks in buying shares and what not. I even have a friend who buys SSB only and doesn’t look at shares although the returns are generally more rewarding.

For more info, you can visit http://www.sgs.gov.sg/savingsbonds/Your-SSB/This-months-bond.aspx. There is even an Interest Calaculator for you to work out how much interest you willl be getting over ten years :D


Disclaimer: these are my personal opinion only. Please seek professional advice if necessary. 

Updates on saving loose change

It has been a while since my last post! Many things that I shared in the past have changed. Previously shared OCBC SmartChange but the bank has removed this feature.

Nonetheless, here’s an update on saving loose change. Look at what Ah Boys to Men’s IP Man has done!!

THIS IS WHY YOU SHOULD KEEP YOUR CHANGE! Looks like my Tokyo trip next week is settled 😂👌🏼 pic.twitter.com/wjCxiRkazl

— Noah Yap 叶荣耀 (@TrulyNoah) October 13, 2017

Accumulated almost $3000 worth of coins in a coke bottle and banked in! That’s quite impressive isn’t it? We can be motivated by such anecdotes.

This is what I used to do too! Saving all the loose change. But I changed...

Instead of keeping all the loose change at home, I have been keeping only $1 coins in my coin box. What do I do to the rest of the denominations? I try to bring out and spend the next day. For e.g. I bring 80c worth of coins out; if that Old Chang Kee curry puff costs $1.60, I give the cashier $2 note + 60c coins and get $1 coin in return. Repeat this and I will reduce the coins to $1 coins at the end of the day.

So why this change? You may notice that IP Man incurred a coin deposit fee of $90 for the 7500pcs coins he deposited. If I deposit 3000pcs of $1 coins instead, the fee can be reduced to $36 only. Fees aside, it is also less frustrating and less time-consuming to count only $1 coins.

But TheMoneyFace is still not satisfied. Why should I let the bank eat my money? It’s easy to skirt around this fee... change with coffeeshop/hawker stalls and mama shops (don’t make things difficult for them by trying to change or use 5c coins on them as these small businesses rarely sell things in that denomination); deposit into kids savings account (zero coin deposit fee; e.g. POSB); or throw all coins into the coin acceptance machine at supermarkets (but make sure no long queue okay)!

Save on! There are still many ways to save! Please comment below to share what’s your saving technique $_$