http://newpaper.asia1.com.sg/news/story/0,4136,179863,00.html?
In HK, customers rush to withdraw savings, but in S'pore
Cash-rich clients place big deposits with local banks
By Elysa Chen
October 13, 2008
W0RRIED: Last month, customers in Hong Kong scrambled to withdraw their deposits from the Bank of East Asia after it was hit by rumours questioning its stability.
CALL it the run for the banks, and not on the banks.
While some bank customers in the US and Hong Kong made a beeline to banks to withdraw their savings recently, many Singaporeans are doing the exact opposite - by running to the banks to deposit more money.
Fuelled by attractive interest rates, these customers have reportedly pumped in hundreds of million dollars into fixed deposits in the local banks here.
Late last month, the United Overseas Bank (UOB) started the ball rolling when it offered interest rate of 1.708 per cent for cash-rich Singaporeans who can afford to set aside at least $1 million for 13 months.
The response was apparently so good that the bank ended its promotion after just six days.
The bank declined to comment on whether this was a factor, nor did it want to reveal the take-up rate.
The Business Times had estimated that the exercise could have attracted up to $1 billion in fresh funds for UOB, considering that there are an estimated 77,000 millionaires in Singapore. The bank did not want to confirm this when contacted.
After the promotion, UOB took out another full-page advertisement on Tuesday, offering up to 1.6 per cent on an eight-month time deposit for minimum amounts of $500,000 for their privilege-banking customers.
That same day, OCBC also ran a full-page advertisement for its fixed deposit promotion, offering up to 1.888 per cent for a 24-month time deposit for amounts between $200,000 and $999,999.
During this time, Citibank had also taken out advertisements on three different days, offering up to 1.65 per cent on their 12-month fixed deposit.
Dr Lau Sie Ting, head of the banking and finance division in Nanyang Technological University's Nanyang Business School, said: 'The main reason for the overwhelming response to the fixed deposits is because it is a safe haven where people can park their money.
'So, even if the interest is only 1 per cent, investors who are wary of the risks in investing in securities would rather put their money in these less risky products.'
For consumers, the aggressive competition among the banks have brought some cheer amid the financial gloom.
Mrs Anne Low, 44, a sales coordinator who recently started a fixed deposit account with Standard Chartered Bank, said that with such high interest rates, she is looking at opening another bank deposit.
Careful
She said: 'It's good news in a period when everything is down, but now I have another problem, because there are so many banks offering promotions, I don't know which one to choose!'
Another fixed-deposit customer, housewife Anne Koh, 51, said: 'Some of my friends are so worried about where they should park their money, they even jokingly said that they would keep them in tin boxes under their beds! But I tell them that they can leave the money with a bank with a solid reputation.'
Although Mrs Koh feels that fixed deposit interest rates now cannot compare to those of up to 6 per cent 20 years ago, she is still making fixed deposits her investment of choice.
Mrs Koh, who has such accounts with DBS and OCBC, said: 'We have to be more conservative with our investments now. Even when I invest in a fixed deposit, I choose banks that have strong support behind them.'
Mr Eddie Khoo, executive vice-president of personal financial services at UOB, said: 'We consistently strive to offer consumers attractive products to meet their financial needs regardless of market conditions.'
The bank has not forgotten about its regular customers, and is also looking to attract those who have at least $50,000.
The promotion, launched on Tuesday, offers interest rates of up to 1.5 per cent for an eight-month fixed deposit.
In HK, customers rush to withdraw savings, but in S'pore
Cash-rich clients place big deposits with local banks
By Elysa Chen
October 13, 2008
W0RRIED: Last month, customers in Hong Kong scrambled to withdraw their deposits from the Bank of East Asia after it was hit by rumours questioning its stability.
CALL it the run for the banks, and not on the banks.
While some bank customers in the US and Hong Kong made a beeline to banks to withdraw their savings recently, many Singaporeans are doing the exact opposite - by running to the banks to deposit more money.
Fuelled by attractive interest rates, these customers have reportedly pumped in hundreds of million dollars into fixed deposits in the local banks here.
Late last month, the United Overseas Bank (UOB) started the ball rolling when it offered interest rate of 1.708 per cent for cash-rich Singaporeans who can afford to set aside at least $1 million for 13 months.
The response was apparently so good that the bank ended its promotion after just six days.
The bank declined to comment on whether this was a factor, nor did it want to reveal the take-up rate.
The Business Times had estimated that the exercise could have attracted up to $1 billion in fresh funds for UOB, considering that there are an estimated 77,000 millionaires in Singapore. The bank did not want to confirm this when contacted.
After the promotion, UOB took out another full-page advertisement on Tuesday, offering up to 1.6 per cent on an eight-month time deposit for minimum amounts of $500,000 for their privilege-banking customers.
That same day, OCBC also ran a full-page advertisement for its fixed deposit promotion, offering up to 1.888 per cent for a 24-month time deposit for amounts between $200,000 and $999,999.
During this time, Citibank had also taken out advertisements on three different days, offering up to 1.65 per cent on their 12-month fixed deposit.
Dr Lau Sie Ting, head of the banking and finance division in Nanyang Technological University's Nanyang Business School, said: 'The main reason for the overwhelming response to the fixed deposits is because it is a safe haven where people can park their money.
'So, even if the interest is only 1 per cent, investors who are wary of the risks in investing in securities would rather put their money in these less risky products.'
For consumers, the aggressive competition among the banks have brought some cheer amid the financial gloom.
Mrs Anne Low, 44, a sales coordinator who recently started a fixed deposit account with Standard Chartered Bank, said that with such high interest rates, she is looking at opening another bank deposit.
Careful
She said: 'It's good news in a period when everything is down, but now I have another problem, because there are so many banks offering promotions, I don't know which one to choose!'
Another fixed-deposit customer, housewife Anne Koh, 51, said: 'Some of my friends are so worried about where they should park their money, they even jokingly said that they would keep them in tin boxes under their beds! But I tell them that they can leave the money with a bank with a solid reputation.'
Although Mrs Koh feels that fixed deposit interest rates now cannot compare to those of up to 6 per cent 20 years ago, she is still making fixed deposits her investment of choice.
Mrs Koh, who has such accounts with DBS and OCBC, said: 'We have to be more conservative with our investments now. Even when I invest in a fixed deposit, I choose banks that have strong support behind them.'
Mr Eddie Khoo, executive vice-president of personal financial services at UOB, said: 'We consistently strive to offer consumers attractive products to meet their financial needs regardless of market conditions.'
The bank has not forgotten about its regular customers, and is also looking to attract those who have at least $50,000.
The promotion, launched on Tuesday, offers interest rates of up to 1.5 per cent for an eight-month fixed deposit.
