Tag Archive: POSB

Jan
06
2012

Fraudulent Withdrawals from DBS Accounts

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by Martin Lee

January 6, 2012

More than $200,000 were illegally withdrawn from some DBS customers this year from ATMs located in Malaysia.

Apparently, someone has managed to clone the ATM card details (including the passwords) and made the withdrawals from Malaysia using the cloned cards.

Currently, there are about 200 customers affected with an average withdrawal of $1000 per account.

DBS is currently investigating the situation and have reassured the public that any monies that were lost will be rightfully refunded within 24 hrs after notification.

You might want to check your DBS/POSB bank balance to see whether you are one of the affected customers. This might be a challenge though as the internet banking service of DBS has been down since last night due to the over-whelming traffic.

And in typical Singapore style, some kaisu Singaporeans have started to withdraw money from their DBS/POSB accounts. Not so much they are afraid of DBS collapsing, but more of concerned that their account might be targeted by the Malaysia withdrawal scam.

There is even an online discussion about a possible bank run on DBS.

I am quite sure the mass withdrawals will not be enough to cause a bank run, but a large outflow of funds can become irritating to DBS.

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Mar
29
2010

POSB MyPlus Plan

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by Martin Lee

March 29, 2010

POSB has teamed up with Aviva to offer a 5-year single premium endowment product that pays 2.25% interest every year.

This is a no-frills non-participating insurance product which also provides a sum assured of 101% of single premium for death or 106% of single premium for accidental death.

At the end of the 5 years, 100% of the premiums will be returned.

The minimum investment is $10,000 using cash only.

As a illustration, if you invest $10,000, you will receive $225 at the end of every year for 5 years and receive $10,000 when the product matures. You may not receive back the full principal amount if you surrender the plan before the end of five years.

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Jan
22
2010

POSB Invest Equity Series 1

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by Martin Lee

January 22, 2010

POSB Invest Equity Series 1 is a 4-year 11-month Structured Deposit that was recently launched by POSB.

The POSB Invest Equity gives fixed payouts over the term with the potential of a bonus payout if three Singapore blue chip stocks (SGX, SIA and Keppel Corp) perform well. posb

The fixed payouts are as follows:

  • Year 1 : 1.38%
  • Year 2 : 1.38%
  • Year 3 : 1.38%
  • Year 4 : 1.38%
  • Year 5 : 1.86%

Assuming no bonus payout, the effective interest rate over the period of the investment is 1.48% p.a. (as given on POSB website).

If the prices of ALL three blue chip stocks are 20% higher compared to the prices at the start, then a bonus payout of 2.5% will be given. With the bonus payout, the effective interest rate works out to be 1.96% p.a.

A minimum of $5000 is required to invest in the POSB Invest Equity Series 1. As this is a structured deposit, the investment will not be insured by the Singapore Deposit Insurance Corporation in the event POSB goes bust.

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Sep
01
2009

DBS Invest Choice Account

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by Martin Lee

September 1, 2009

I chanced upon an advertisement for the DBS Invest Choice Account a couple of days ago. Taking a closer look at the product, I realised that it is almost the same as the POSB Invest SingGrowth Account that POSB launched back in June 2009. You can refer to the POSB Invest SingGrowth Account post for an explanation of how it works.

The reference entities and redemption conditions are all the same. The only difference is that the payout is 0.22% higher in the first year.

Year Fixed Payout Bonus Payout
Year 1 3.00% -
Year 2 1.08% 0.50%
Year 3 1.18% 1.00%
Year 4 1.28% 1.50%
Year 5 1.38% 2.00%

Here is a repeat of the earlier exercise of calculating the returns based on a $100k investment.

Case 1: No redemption event

You will collect:

End of year 1: $3000

End of year 2: $1080

End of year 3: $1180

End of year 4: $1280

End of year 5: $101380

Case 2: Redemption event occurs at end of year 2

You will collect:

End of year 1: $3000

End of year 2: $101580

Case 3: Redemption event occurs at end of year 3

You will collect:

End of year 1: $3000

End of year 2: $1080

End of year 3: $102180

Case 4: Redemption event occurs at end of year 4

You will collect:

End of year 1: $3000

End of year 2: $1080

End of year 3: $1180

End of year 4: $102780

Case 5: Redemption event occurs at end of year 5

You will collect:

End of year 1: $3000

End of year 2: $1080

End of year 3: $1180

End of year 4: $1280

End of year 5: $103380

Case 6: DBS/POSB goes bust

You will get back nothing as this product does not fall under the Singapore Deposit Insurance Act.

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The actual annualised yield for the 5 different cases are computed as follows:

Case 1: 1.59% p.a. (product matures in 5 years)

Case 2: 2.30% p.a. (product matures in 2 years)

Case 3: 2.09% p.a. (product matures in 3 years)

Case 4: 2.01% p.a. (product matures in 4 years)

Case 5: 1.98% p.a. (product matures in 5 years)

You can use the yield and maturity length as a benchmark to compare against other similar products. Of course, no one would be able to predict which of the 5 cases would ultimately happen.

The yield is slightly higher than the POSB Invest SingGrowth Account but it requires a much higher minimum of $100k to invest in the product.

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Aug
05
2009

MyHome Fund Launched by POSB

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by Martin Lee

August 5, 2009

POSB yesterday announced the launch of MyHome Fund, a fund that allows investors to gain exposure to Singapore bonds and equities by investing into two Exchange Traded Funds (ETFs) – DBS Singapore STI ETF and ABF Singapore Bond Index Fund.

MyHomeFund is a mid to long term investment and there are currently two portfolios to choose from:

  • HomeSteady which has a 80% allocation to ABF Singapore Bond Index and 20% allocation to DBS Singapore STI ETF
  • HomeBalanced which has a 50% allocation to ABF Singapore Bond Index and 50% allocation to DBS Singapore STI ETF

The newspapers reported another Growth portfolio with a 80% equity – 20% bond allocation but I couldn’t find it in the announcement or the product brochure. Perhaps the Growth portfolio has been postponed.

Investments into MyHome Fund starts from a minimum of $1000. The initial sales charge is 3% (ST incorrectly reported it as 0.3%) and there is an annual management fee of 0.5%. Application can be done using cash or SRS via POSB branches, ATMs or internet banking.

The MyHome Fund could be an option for investors who wants to invest passively into the Singapore market on a regular basis.

The pre-defined allocation percentages means that you do not even have to bother about rebalancing the portfolio yourself. This is something that you would need to do if you were to construct your own ETF portfolio by buying the ETFs directly.

The fact that DBS is the manager of DSB STI ETF also means that there could be cost savings when it invests into the STI ETF.

With ETFs gaining popularity over traditional Unit Trust because of their low cost structure, I will not be surprised to see the launch of more low cost passively managed funds that uses ETFs as their investment vehicles.

This is good news for the retail investor. Personally, I would also like to see more low cost index funds being bought to the Singapore market. An index fund that charges you 0.5% p.a. that tracks the STI would likely to be more cost effective than one that charges you 0.5% p.a. to buy into a STI ETF (which charges you another layer of fees).

The options for that are rather limited now.

The brochure for MyHomeFund can be downloaded here:

POSB MyHome Fund

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