OCBC terminated the 5.5-Year SGD Interest Rate Linked Structured Deposit early on 31 October 2016 after 3 years.
The bank introduced OCBC 6-Year SGD Interest Rate Linked Structured Deposit for subscription from 17 November to 21 December 2016 (depending on availability).
It is not a plain vanilla time deposit. It is interest rate-linked. Duration of SD is 6 years.
Payment of interest is half yearly as follows:
Interest rate for Year 1 is 1.88% p.a.
Interest rate for Year 2 is 1.88% p.a.
Interest rate for Year 3 is 1.88% p.a.
Interest rate for Year 4 is 1.88% p.a.
Interest rate for Year 5 is 1.88% p.a.
Interest rate for Year 6 is 1.90% p.a.
Effective interest rate if held to maturity is 1.89% p.a.
In comparison with the earlier SD (5.5 year), the interest rate is higher (1.89% vs 1.50% p.a.)
5.5-Year SD that was early terminated:
Interest rate for Year 1 is 1.20% p.a.
Interest rate for Year 2 is 1.30% p.a.
Interest rate for Year 3 is 1.40% p.a.
Interest rate for Year 4 is 1.60% p.a.
Interest rate for Year 5 is 1.80% p.a.
Interest rate for Year 6 is 2.00% p.a.
Minimum principal amount is $5,000 with multiples of $1,000.
OCBC holds the right but not the obligation to unconditionally early terminate the SD at the end of an interest period. In other words, OCBC can technically terminate this SD after half a year from start.
There is pre-mature withdrawal fee should depositor withdraws any time before the full 6-year term. Besides this, there are other risks such as issuer risk, market risk, tenor risk, reinvestment risk. SD is not covered by Deposit Insurance.
In my case, I moved from getting 1.40% p.a. interest in Year 3 of the old SD to 1.88% p.a. interest on the new 6-Year SGD Interest Rate Linked Structured Deposit.
Copyright © 2016, limkimtong for Living Investment
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