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Singapore bank advertising

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Dec. 12th, 2005 | 08:14 pm
mood: bitchybitchy

Example 1, from OCBC:

"8% Cash Rebate will bring a smile to customers’ faces

EasiCredit is the only credit line in town to reward you with 8% cash rebate*. So you can enjoy cash savings when you use it. Here’s how it works: EasiCredit customers who accumulate regular interest payments of S$840 or more annually will qualify for an 8% cash rebate on the interest amount.

The rebate will automatically be credited into the EasiCredit account. So, if you have an average outstanding balance of S$10,000 for one year at the prevailing rate, you’ll receive a rebate of S$134.40! How’s that for great savings?

* The qualifying period will be the EasiCredit accounts' anniversary year. Rebates will be credited within one month after the end of the anniversary year. Terms and conditions Governing EasiCredit Cash Rebate apply. EasiCredit is the new name of Prestige Credit. The prevailing interest rate of EasiCredit is currently at 16.8% p.a."

What this means is that if you pay them $840 in interest during the year, they will reduce the effective interest rate to 15.45% p.a. But they package it as a "cash rebate", so it seem like you're getting money for free! Never mind that it cost you $840 to get that rebate, and that $840 has disappeared into the void. OCBC talk cock lah!

Now onto structured deposits, helpfully provided by UOB..

"UOB Grower Deposit (SGD)
• Guaranteed interest payout of 3.88% on your SGD placement at the end of Year 1 (minimum effective interest rate 0.6063% p.a.)*.

UOB Grower Deposit (USD)
• Guaranteed interest payout of 6% on your USD placement at the end of Year 1 (minimum effective interest rate 1.5334% p.a.)**."

Well, this is not so bad when taken from the website. On the brochure they say "6% return guaranteed!" in huge letters. Then if you look through the rest of the brochure, you will find out that the effective interest rate may be as low as 1.5334% p.a. The reason is that the 6% you get is for the first year ONLY. But you may not be able to redeem your money for up to 4 years afterwards. And for those years, you receive little or no interest.

The entire goal of a structured deposit appears to be so they can advertise high interest rates while giving you low ones in reality. To add insult to injury, they use names like "UOB Grower Depost" or "Winning Trends", and talk about growing your wealth.

I see why Australia has such strict rules about bank advertising.. Singapore really needs that too.

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Comments {1}

You can't fool Brian!

from: anonymous
date: Jan. 7th, 2006 02:57 pm (UTC)
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Yeah, banks suck. Australian banks still rob people blind though. They just whack up fees all over the place. The less money you have, the more they take from your account, because they know that there's less chances you'll be able to do something about it. Banks are the biggest thieves in the world, apart from Insurance companies and Governments.

MrLeN

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