Fixed Deposit Promotion

[MyPillow]

leeyl, thks for up dating,

2017 rate is really sad sad . Not as good as we forsee last yr - that 2% fixed dep dream … hahaaha

[starlight1968sg]

MyPillow:

leeyl, thks for up dating,

2017 rate is really sad sad . Not as good as we forsee last yr - that 2% fixed dep dream ... hahaaha

I rem one of the mums here went for the long tenor last year or so, to catch the highest interest rate, while the interest rates were still climbing
I missed the boat

[MyPillow]

starlight1968sg:

MyPillow:

leeyl, thks for up dating,

2017 rate is really sad sad . Not as good as we forsee last yr - that 2% fixed dep dream ... hahaaha

I rem one of the mums here went for the long tenor last year or so, to catch the highest interest rate, while the interest rates were still climbing
I missed the boat

there was a OCBC , abt 2% + insurance product but 5 years, capital guarantee
And Maybank got 1.8+ % last Oct or Nov .... then I see dropping rates ..
I helped my folks to put into the two above ... But i feel 5 yrs abit long for old folk , 3 yrs seem better for seniors

Leeyl : I cant see the fine prints, when is the closing date? which day newspapers

[pirate]

archcherub:

starlight1968sg:

[quote=\"zbear\"]With this year's pathetic interest rates, will you all still do a FD placement?

I will, still better than leaving it at saving ac

i am curious, do u guys not want to place it in stocks instead? not those penny speculation stocks.
but like stocks for long run.
like Strait times index (basket of stocks)

been thinking about it coz Fixed deposits giving me very low returns[/quote]Want to do your own 'structured deposit'? Very simple.

(1) Put your money into a 6 month FD.
(2) At maturity, take the interest out and roll-over the capital for another 6 months.
(3) Use the interest to buy STI call options.
(4) Repeat until 5 years reached.

There, you have your own 5-year 'structured deposit'. If the STI goes up at some time during the tenor of the options, you can sell the options and make more than the FD interest, because your options will go up at a faster rate than the STI. If it goes down, your options may become worthless. But your capital is still 'guaranteed'. All you lose is the FD interest that you used to buy the options. That's the general idea, anyway.

Unless your bank goes belly up...

The question is, do you want to share say half the potential upside of the options with your bank, just for 'structuring' it for you? :siam:

[starlight1968sg]

Pirate

I had the FD ladder
But as the interest rates going down, my ladder is going down too

[lee_yl]

pirate:

Want to do your own 'structured deposit'? Very simple.

(1) Put your money into a 6 month FD.
(2) At maturity, take the interest out and roll-over the capital for another 6 months.
(3) Use the interest to buy STI call options.
(4) Repeat until 5 years reached.

There, you have your own 5-year 'structured deposit'. If the STI goes up at some time during the tenor of the options, you can sell the options and make more than the FD interest, because your options will go up at a faster rate than the STI. If it goes down, your options may become worthless. But your capital is still 'guaranteed'. All you lose is the FD interest that you used to buy the options. That's the general idea, anyway.

Unless your bank goes belly up...

The question is, do you want to share say half the potential upside of the options with your bank, just for 'structuring' it for you? :siam:

This strategy sounds plausible on paper but what about the transaction costs? And not forgetting that 6-month FD interest rate is less than 0.75% pa, so how much interest can you earn?

Enough to trade one option contract without leverage? If you buy the call option on margin, the risks will definitely be higher.

Perhaps this strategy could work for investible sums running in the millions but probably not suited for small-time savers.

[lee_yl]

MyPillow:

there was a OCBC , abt 2% + insurance product but 5 years, capital guarantee
And Maybank got 1.8+ % last Oct or Nov .... then I see dropping rates ..
I helped my folks to put into the two above ... But i feel 5 yrs abit long for old folk , 3 yrs seem better for seniors

Leeyl : I cant see the fine prints, when is the closing date? which day newspapers

http://info.maybank2u.com.sg/personal/investment-insurance/investment/maybank-saver-series-2017-structured-deposit-t1.aspx

I think I saw the ad on Sunday Times. Closing date is 10th Feb.

[pirate]

starlight1968sg:

Pirate

I had the FD ladder
But as the interest rates going down, my ladder is going down too

Unfortunately, a ladder is a type of structure where instead of buying options, one is actually selling options. So, when the market moves against the 'investor', the 'investor' dies horribly because the 'investor' is actually taking on contingent liability. If the market moves in the investor's favor or does not move, the 'return' is actually the option fee for selling the options.

Hence, I never touch ladders. Limited upside, but unlimited downside.

[jetsetter]

r u guys buying USD yet? worried about SGD in the coming months…

[pirate]

lee_yl:

pirate:

Want to do your own 'structured deposit'? Very simple.

(1) Put your money into a 6 month FD.
(2) At maturity, take the interest out and roll-over the capital for another 6 months.
(3) Use the interest to buy STI call options.
(4) Repeat until 5 years reached.

There, you have your own 5-year 'structured deposit'. If the STI goes up at some time during the tenor of the options, you can sell the options and make more than the FD interest, because your options will go up at a faster rate than the STI. If it goes down, your options may become worthless. But your capital is still 'guaranteed'. All you lose is the FD interest that you used to buy the options. That's the general idea, anyway.

Unless your bank goes belly up...

The question is, do you want to share say half the potential upside of the options with your bank, just for 'structuring' it for you? :siam:

This strategy sounds plausible on paper but what about the transaction costs? And not forgetting that 6-month FD interest rate is less than 0.75% pa, so how much interest can you earn?

Enough to trade one option contract without leverage? If you buy the call option on margin, the risks will definitely be higher.

Perhaps this strategy could work for investible sums running in the millions but probably not suited for small-time savers.

Aiya. I am not telling people to go and do it lah. I am just telling readers here what a 'structured deposit' is basically. Once you understand what it is, you will also understand that the chances of getting zero return over 5 years is actually quite high.

PS. Wah! Option is already a leveraged instrument and you want to buy it on margin some more. You really garang! :faint: