Back on 19 April 2010, I put money into the UOB Structured Deposit called Growth Deposit Series 3. Now after 59 months (nearly 5 years), it matured. I got back my principal sum and a maturity bonus interest of 0.5% on the principal amount. This maturity bonus interest is the minimum I am entitled to and missing out a potential bonus interest of 5%.
Over the 5-year period, I received guaranteed interests as follows:
3% of principal amount at end of Month 3
1% of principal amount at end of Year 2, 3, 4
Together with the bonus interest of 0.5% at maturity, the effective interest rate was 1.3410% per annum. This effective interest rate is quite acceptable because of the low interest rate environment for fixed deposits during these 5 years.
Because it is a structured deposit, the maturity bonus interest is dependent on the performances of 3 share counters over 5 observation dates (over 5 years). The share counters are CapitaLand, SPH and DBS. The worst performing counter was CapitaLand when compared against its initial price of $3.9524 (on 19 April 2010). CapitaLand’s share prices were consistently below $3.9524 at these 5 observation dates. Therefore, investors only get a minimum of 0.5% as maturity bonus interest as a result, missing out of the extra bonus interest.
Copyright © 2015, limkimtong for Living Investment
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