Dear readers, currently there is a galore of good high fixed deposits on offer to retail individuals
Many of these fixed deposits pay respectable decent interest, averaging 2% per annum.
But investors must really take note whether a 2% per annum interest fixed deposit pay them 2% interest upon maturity.
For examples, are the following three 2% interest per annum fixed deposits the same?
- a 2% per annum interest 8-month fixed deposit
- a 2% per annum interest 12-month fixed deposit
- a 2% per annum interest 18-months fixed deposit
On first glance, each fixed deposit in a), b) and c) pays 2% interest per annum and this is a fact.
But on closer look, the fixed deposit in a) only pays 1.33% interest upon maturity, the fixed deposit in b) pays exactly 2% interest upon maturity while the fixed deposit in c) pays a higher interest of 3% upon maturity.
In fact, a bank can promote a fixed deposit with a higher fixed interest rate by compressing time horizon to attract attention.
What about a 4% per annum fixed deposit for 6-months? Which is in fact a 2% interest rate upon maturity.
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! I also run another blog Singapore Stocks Investing with similar useful insights! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
BINGE READ ALL POSTS!
Visit Home Page for more reads or Connect here!