Foreign Exchange for small investors

If you have only $2000, yet want to feel the foreign exchange market, what will you do? You may buy foreign currency notes from an "authorized money changer", and then put them at home. When the notes worth more, you go to that money changer to change back SingDollar.

However, the selling rate and buying rate may differ much at the money changers. Your potential profit is eroded much by them. Same problem exists in banks. And banks apply minimal amount of exchange when you do so.

I was always looking for an investment tool for small investors. It doesn't require minimal contract size. Yet it provides short spread of selling and buying rate. Money changers' selling and buying rate may have 250 ticks for US dollar. That is selling rate at i.e. 1.7000 and buying at 1.6750.

Finally such investment tool is introduced by POEMS Company. Its new product - FX INVEST provides a spread of only 50 ticks. The balance of your account even has interests. You use "bill payment" function of any bank's internet banking to transfer money to your FX INVEST account. You submit online request via POEMS website and POEMS will issue cashier's order to your designated bank account.

Bank Of Singapore

If you are a foreigner, you might think "Bank of Singapore" is a big bank in Singapore, or at least, it is one of the largest banks. Many banks of "country_name" are central banks of that country. While in Singapore, if you ask a person in the street what the bank of Singapore is, he or she will be lost definitely. When I downloaded a document from bankers association of Singapore, I found at surprise that there were five local banks. Besides the big three: DBS, UOB, and OCBC, there were two others: Far Eastern Bank and Bank of Singapore. Because many of UOB materials include Far Eastern Bank, I know FEB is a subsidary of UOB. But OCBC seldom talks about Bank of Singapore. Until recently the interest battle of online banking accounts shall I know that Bank of Singapore is offering attractive interest rate of 1.9% p.a.

Bank of Singapore is actually 100% owned by OCBC. Its issued Cashier's Order is in name of OCBC to give reciever more confident. I think OCBC shall advertise more on its online e-bank arm.

Online Fund Transfer Security

When it comes to online banking, people often worry about that his money would be transferred out without his notice. So some people disabled the "fund transfer" service. His internet banking only serves for balance enquiry purpose. Thanks to innovative thinking, now all banks force another way of verifying when customers wish to do online fund transfer. First, you must set up the potential payee. Then bank offers you a one time password to activate the setup. Only after that can you transfer money to that payee.

Different banks in Singapore provide quite different methods of obtaining the additional online password.

(1) DBS, UOB, and Citibank send the password to customer's mobile phone via SMS.

(2) OCBC and Maybank need customer to use phone banking to get the password.

(3) Standard Chartered Bank wishes customer to dial a dedicated number using his mobile phone, then listen the password be read out.

(4) ABN AMRO bank is the only bank that requires additional hardware ( a portable device ) to do online banking. The device will generate a dynamic password, together with your userid and static password to log in. After you login, you can setup the payee without other passwords.

Bank Deposits in Singapore

Today I talk about 100% capital guaranteed investment. That's it! Bank deposits.

(1) eSaver - Standard Chartered Bank.
It is a saving account. You can withdraw money anytime. No minimal balance to maintain. The drawback is that you must transfer fund to other account to withdraw money. To withdraw over counter will incur $5 fee. The promotion rate is 2.45% per annual till 31/12/05. They haven't announced the rate for next year. The normal rate is 1.28%.

(2) iSAVvy - Maybank
Competing product with eSaver. But an ATM card is provided so that you can withdraw cash from ATM without charge. Nothing comes with no price. You should maintain at least $500 to avoid $2 monthly admin charge. To enjoy first three month high interest rate, the minimal balance is $5000. The rate is 2.38% for first 3 months. After that it is 1.38% ( balance must be over 5000, otherwise the rate is only 0.25% ). Today they even announced online Time Deposit: 2.88% for 12-month tenure. $25,000 to start.

(3) 10-month and 10-day fixed deposit - OCBC
Only $40,000 to open the account. High promotion interest rate at 2.79% per annual. May apply admin charge if withdraw premature.

(4) CPF fund - UOB
This is for those who have a lot of money in their CPF. Total $105,000 to open it. Interest rate is about 2.78%, higher than CPF board 2.5% rate.

(5) Unfixed time deposit - Citi Bank
$50,000 to open. Tenure is 1 year. After one month, you can withdraw partially without admin charge. The withdrawn part has 1.88%. The mature part has 2.68%. I like this one best. It can lock high rate for 1 year, while at same time you are free to withdraw. ( You can't close the account premature. You must leave there at least 5000 )