Thursday, June 25, 2015

Fixed Deposit Just Matured... Now What?

6 months ago, I took part in the DBS fixed deposit promotion that offers 1.5% for a 6 month tenure.

In a few days time, that fixed deposit will mature and I will have back a respectable heap of cash that will be sitting around waiting to do nothing. So what should I do with it?

Almost exactly a year ago, I was saying that one of my goals was to open up another bank account for my excess cash, and it would probably be with CIMB. Of course, it was not until recently that I had the delightful problem of having too much cash, so opening another bank account was not a priority for me.

CIMB does have a lot of options when it comes to cash management.

Just a basic cash savings account has an interest rate of 0.5% pa!
If you top-up your cash savings account by just $100 every month, the whole balance enjoys 0.8% pa!

One of the things that I really like about CIMB is that they have plenty of fixed deposit choices.

A while ago, I came across their 18 month step-up fixed deposit which had an EIR of 1.39%, which is a rate that honestly nothing that awesome. The flexibility to withdraw before the 18 month tenure is up without any penalty and getting to keep the interest accrued so far is something very nice.

Now, they are having a plain fixed deposit promotion that gives 1.5% for a 12 month tenure for amounts of $25,000.

While that might sound enticing to some, I think that they have a product that is even better.

Their step-up deposits!

The current version of the 12-month Step-up fixed deposit has an EIR of 1.40%.
The current version of the 18-month Step-up fixed deposit has an EIR of 1.66%.

While the interest rate is only SLIGHTLY less than a plain vanilla fixed deposit, the flexibility to cut short my fixed deposit is worth that 0.10% in reduced returns to me. What's even better? The minimum amount is only $10,000 instead of $25,000!

To add icing to the cake, CIMB is now having a promotion for their savings account! For new bank customers that open an account online with a minimum of $5,000, they will get $20 NTUC vouchers!

Personally, CIMB is ticking all the right boxes to win me over as a customer:

  1. Promotion ($20 NTUC voucher) to open an account with them
  2. A product (savings account) that is good on its own even without any promotions
  3. Attractive rates (0.5%) and easy requirements ($100 monthly top up) to get the higher rate (0.8%)
  4. Innovative fixed deposit products (step-up) with attractive rates (1.4% for 12 months)

I plan to fund my CIMB account with $5,000 to qualify for the NTUC voucher. I will set-up an automatic $100 monthly transfer from my OCBC account to my CIMB account to make sure that I get the 0.8% interest instead of the 0.5% interest. I will work towards saving up even more cash, and hopefully in 6 months time when I can drop my account balance from $5,000 to the minimum amount ($1,000), I would have accumulated some extra cash to start a $10,000 step-up fixed deposit!

Perhaps I will register online later tonight or over the weekend.

It seems like my plans of putting cash into the SSB might not happen at all! Maybe I will just put in $500 itno the SSB so that I understand the whole process and also know how I might be able to incorporate the product holistically into my investment strategy.

By the way, I'm totally not paid at all to write about CIMB. But I think my write-up is pretty convincing. They should totally pay me a commission or at least write me a thank you letter if their deposits jump! Haha!


  1. Wow didn't know about their step up FD. Willlook into it!

    1. Let me know if you come across anything more attractive!


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