Today I was ‘rejected’ from opening a savings account. I say ‘rejected’ because I never applied – I merely asked a question. Could I open the account in joint names? Answer: no, and furthermore, to open my personal savings account I would have to open a personal current account as well.
No great sweat you might think until I tell you how banking works in Singapore. You have to maintain a minimum balance on current accounts of around $3000-$5,000. Any less than this and you get charged each month. Dipping below $500 results in a higher level of charges akin to those you get for bouncing a cheque in the UK. And there’s no such concept as an overdraft.
Business accounts are even worse. I had to fight to keep a straight face and not fall off my chair when the nice lady at HSBC told me their business account had a minimum balance of $30k. Fine if you’re Starbucks I suppose, but not if you’re a small business. Oh, and beyond the minimum balance stuff there is a whole menu of charges on all accounts. Want a cheque book? Fee. Want to breathe the air in our branch? Fee. You don’t know how lucky you are in the UK, I tell you.
So what was the hype about this savings account which I applied for anyway? Well of course, it was the high interest rate which drew me in: a glorious 1%. No, that’s not a misprint. It really is 1%. Actually I could get an account with 2%...but to get that I would have to deposit $250,000 – and you’d have to be clinically insane to do that for 2%. In fact, most savings accounts here offer considerably less than 1%. “But we are very competitive” one clerk pleaded in a failed attempt to market his bank’s crappy savings account. Yeees…let’s see. You’re competitive in a totally uncompetitive market, because 1% is only good in comparison to the sort of rates one might get offered in Japan.
The only possible upside to the ridiculously low interest rates is that mortgages are cheap (sub 2%). Properties, however, are not. Put it this way: to buy our condo we would have to shell out over $2m, with a maximum mortgage of 80% LTV. Financially it makes no sense at all – perhaps because the Singapore property market has headed the same dizzy way as much of the rest of the world – and seems poised to follow the US and the UK into the abyss very soon.
Anyway, savings-wise it’s back to the drawing board. Plan B (which was kind of plan A anyway after we saw the interest rates) is to offshore the money. Where to though? Well, a UK expat savings account nets about 6.4%. Then again, if we could open an account in Vietnam we’re laughing as interest rates there are running at 10%. But – trumping all of this - my Dana shares have gone up £2 today off the back of good drilling news and high oil prices. That’s 15% in a day and about 50% over the last two years. So you know what, stuff your savings accounts because I can think of better things to do with my money!
No great sweat you might think until I tell you how banking works in Singapore. You have to maintain a minimum balance on current accounts of around $3000-$5,000. Any less than this and you get charged each month. Dipping below $500 results in a higher level of charges akin to those you get for bouncing a cheque in the UK. And there’s no such concept as an overdraft.
Business accounts are even worse. I had to fight to keep a straight face and not fall off my chair when the nice lady at HSBC told me their business account had a minimum balance of $30k. Fine if you’re Starbucks I suppose, but not if you’re a small business. Oh, and beyond the minimum balance stuff there is a whole menu of charges on all accounts. Want a cheque book? Fee. Want to breathe the air in our branch? Fee. You don’t know how lucky you are in the UK, I tell you.
So what was the hype about this savings account which I applied for anyway? Well of course, it was the high interest rate which drew me in: a glorious 1%. No, that’s not a misprint. It really is 1%. Actually I could get an account with 2%...but to get that I would have to deposit $250,000 – and you’d have to be clinically insane to do that for 2%. In fact, most savings accounts here offer considerably less than 1%. “But we are very competitive” one clerk pleaded in a failed attempt to market his bank’s crappy savings account. Yeees…let’s see. You’re competitive in a totally uncompetitive market, because 1% is only good in comparison to the sort of rates one might get offered in Japan.
The only possible upside to the ridiculously low interest rates is that mortgages are cheap (sub 2%). Properties, however, are not. Put it this way: to buy our condo we would have to shell out over $2m, with a maximum mortgage of 80% LTV. Financially it makes no sense at all – perhaps because the Singapore property market has headed the same dizzy way as much of the rest of the world – and seems poised to follow the US and the UK into the abyss very soon.
Anyway, savings-wise it’s back to the drawing board. Plan B (which was kind of plan A anyway after we saw the interest rates) is to offshore the money. Where to though? Well, a UK expat savings account nets about 6.4%. Then again, if we could open an account in Vietnam we’re laughing as interest rates there are running at 10%. But – trumping all of this - my Dana shares have gone up £2 today off the back of good drilling news and high oil prices. That’s 15% in a day and about 50% over the last two years. So you know what, stuff your savings accounts because I can think of better things to do with my money!
3 comments:
I cant help but to say that SG bank interest is just pathetic.. i am trying to find alternative ways to get higher returns but....
I am aware that Standard Chartered has this Esaver account thingy with no fees or caps. but interest wise, it is dropping too.. although it's slightly higher by a tiny-weeny bit...
Interesting! Thanks for the tip - I'll look into it. But seriously I think the stock market is the way forward - consistently outperforms all other asset classes over the long-term
Oh yes, but stock markets are really extremely volatile. I think my stomach would churn and cringe the way it falls and rise... and besides, u need *kaching!* :)
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