CIMB Starsaver account

In my last post, I noted the rising interest rates making Fixed Deposits, Singapore Government Securities (SGS) and Singapore Savings Bonds (SSB) more attractive. 

There is one glaring draw back to all 3 options, and that is your money is subject to a lock up period of sorts:

- To enjoy the interest rate, you need to hold the Fixed Deposit to maturity. 

- For SGS, if you need to liquidate earlier, you need to sell it in the market and accept the risk of taking a small loss on principal amount. 

- SSBs allow a monthly redemption with no chance of capital loss, but it can take up to a month to get your money back.

What do you do, if you just want something that is simple? No lock-in periods, no cumbersome restrictions. Just put your money in, sit tight, and let the interest accrue?

The options available are limited. If we look at an example such as the Standard Chartered e$saver, it comes with some terms and conditions attached.

- the basic interest is only 0.05% per annum- the higher rate of 1.5% applies only to the "incremental balance" (compared to July 2022’s average daily balance)
- has to be "fresh funds" ("fresh funds" are funds that do not originate from any existing account with the Bank or funds that are not withdrawn and re-deposited within 30 days of the Promotion Period)
-capped at maximum ceiling of SGD 1 million principal (sorry rich people!)

- promotional rates ends 30 September 2022

CIMB Starsaver

In contrast, the CIMB Starsaver is relatively pain-free. Just maintain a minimum balance of SGD 1,000, and the basic tier (first SGD 100,000) earns 1%, with 2 more tiers after that.

One point which the website doesn't state clearly, is whether the rates for the 150,000 tier and the 250,000 tier applies to the whole principal, or only to the principal in that tier.

For example, if a balance of SGD 150,000 is in the account, does the first SGD 100,000 earn 1%, the next SGD 50,000 earn 1.5%, or does the entire SGD 150,000 earn 1.5%? I would think it is the former but I can't confirm this based on information available from the website. 

Nonetheless, the simplicity of this product makes it attractive for customers seeking a no-frills deposit.

As always, read the terms and conditions of these products carefully, and seek financial advice if necessary. Take note of the SDIC insurance amount of SGD 75,000.

None of the above should be construed as investment advice. Do your own due diligence as I will not be responsible for any loss/risk.