Recently I had a conversation with a group of friends.
There was mention of a POSB deposit which promised good return of 3.16% after only 3 months. My friends seem pretty excited by the prospect of a good low risk investment. Good lobang? Let’s see.
This turned out to be POSB Invest AllCheers account, a 5-year structured deposit linked to 4 Singapore blue chip companies, namely
- Keppel Corporation Limited;
- United Overseas Bank Limited;
- Singapore Exchange Limited;
- SembCorp Industries Limited.
Minimum investment $5,000 locked over 5 years with capital guarantee upon maturity. 5 fixed payouts over 5 years (if held to maturity) as below with an additional 0.50% upon occurrence of the Specified Redemption Event i.e. when the Return of each blue-chip Share is at or above 15% on a Fixing Date from year 3 onwards. Account terminated upon occurrence of the Specified Redemption Event where Principal cum fixed payout and bonus 0.50% is paid to deposit holder.
Simplified example using $100 as input.
| Guarantee
| SRE @ yr3
| SRE @ yr4
| SRE @ yr5
|
Jan-10
| (100)
| (100)
| (100)
| (100)
|
Apr-10
| 3.16
| 3.16
| 3.16
| 3.16
|
Jan-12
| 1
| 1
| 1
| 1
|
Jan-13
| 1.08
| 101.58
| 1.08
| 1.08
|
Jan-14
| 1.18
| -
| 101.68
| 1.18
|
Jan-15
| 101.28
| -
| -
| 101.78
|
Yield(pa)
| 1.56%
| 1.94%
| 1.75%
| 1.66%
|
*SRE = Specified Redemption Event
(Fixing Date assumed to be end of year)
|
|
It is clear that the annual compounded return ranges from guaranteed 1.56%pa to as high as 1.94% (assuming the earliest occurrence of the SRE). Not sure whether the same group of friends will be just as excited before?
Free Toastbox vouchers for early birds though.. anyone keen?
