Now, Singapore today, with Lance Alexander and Daniel Martin, Singapore lender UoB saysit's lowering the interest rates for its flagship savings account from next month, makingit the first local bank to do so it comes as market expectations build up for the possibility of rate cuts.By the U.S. Federal Reserve in the next few months, UoB's one account provides tiered interestrates, similar to the flagship savings accounts offered by DBS and OCBC.What are the implications of this, our banks forecasting interest rate cuts in the future?Does this have implications for your housing loan as well?Getting insights from Alfred Chia CEO of SingCapital, a financial advisory firm.So this is interesting.You will be sent out the letter to its customers and may the announcement of their social pages as well.Is the first local bank to lower its interest rates for its savings account?What does this mean?Is this a sign that the lender is expecting the Fed to cut interest rates in the coming months?Well, if you take a step back to look at what is the bank's essential business, which is to land out their deposit.So therefore, they will always need to balance their cost of supply, which is the deposit.And then, of course, the loans that they can actually give it up to.And of course, one big chunk of the loans that banks give up to is housing loan.And the property transaction has actually been quite slow over the last few months.So this could also be an indication that the banks have too much deposit and they need to manage their costs.And at the same time, maybe they are not able to land out the deposit as much as they want to.Or they could be actually signaling that they are trying to start a very attractive loan package for homeowners.OK, so you will be the first one to jump.Do you think other banks in Singapore will follow suit?I think it all depends on the respective banks' strategies and whether they are ableto land out their deposit effectively to their targeted groups.I mean, in addition to housing loan generally, the business loan side has also been slow.Banks are a bit reluctant to land out to businesses because of certain uncertaintiesor certain sectors that were actually not able to fulfill the bank's requirements.So therefore, it's really something that we need to monitor.That's the macro perspective, Alfred.But on the individual level, people might be saying, I am going to be earning less money from my deposits.This is not very good.Like, what does it mean for the individual?Well, I think the banking sector is really very competitive.I mean, you will be would have their strategic reasons to making their cards.But there are also the new players like the digital banks.They are also offering very attractive deposit rates.And at the same time, they have less conditions, unlike the local banks.Because you need to do salary credit things.You need to swipe your credit cards, minimum amount.At the same time, you must purchase investment.So it may not actually get those kinds of interest rate that they publish.OK, a lot of people are hoping that the Fed will cut its rates in 2024, maybe three times.So do you think people should be waiting a little longer for a better bank interest rate if they want to borrow?Now, it's very difficult to predict the interest rate trend, right?I mean, of course, early this year, market consensus is that no Fed is going to cut threetimes in the second half of the years.But we have been actually questioning our clients, right?Not to put in too much of such expectation.Because inflation rate is still high in the US.And in fact, the February data has shown that yes, actually, each higher.So and of course, US Federal Reserve have also indicated that they are actually not in a hurry to cut the interest rate.So it's our opinion that this year interest rate will stay high.That could probably be one or two cards by the second half of the year, right, in orderfor them to, you know, engineer a soft landing of the economy.And I think the expectation of a big card, I think, is not very practical.Okay, Alfred Chia, he is CEO of SingCapital, which is a financial advisory firm.Before making any decisions based on the information in our programme, please consultyour own financial advisors to take into account your investment objectives, financialsituation and individual needs.source: <a target="_blank" rel="" href="https://www.channelnewsasia.com/listen/daily-cuts/impact-revised-interest-rates-bank-customers-4237156">CNA</a>

Now, Singapore today, with Lance Alexander and Daniel Martin, Singapore lender UoB says

it's lowering the interest rates for its flagship savings account from next month, making

it the first local bank to do so it comes as market expectations build up for the possibility of rate cuts.

By the U.S. Federal Reserve in the next few months, UoB's one account provides tiered interest

rates, similar to the flagship savings accounts offered by DBS and OCBC.

What are the implications of this, our banks forecasting interest rate cuts in the future?

Does this have implications for your housing loan as well?

Getting insights from Alfred Chia CEO of SingCapital, a financial advisory firm.

So this is interesting.

You will be sent out the letter to its customers and may the announcement of their social pages as well.

Is the first local bank to lower its interest rates for its savings account?

What does this mean?

Is this a sign that the lender is expecting the Fed to cut interest rates in the coming months?

Well, if you take a step back to look at what is the bank's essential business, which is to land out their deposit.

So therefore, they will always need to balance their cost of supply, which is the deposit.

And then, of course, the loans that they can actually give it up to.

And of course, one big chunk of the loans that banks give up to is housing loan.

And the property transaction has actually been quite slow over the last few months.

So this could also be an indication that the banks have too much deposit and they need to manage their costs.

And at the same time, maybe they are not able to land out the deposit as much as they want to.

Or they could be actually signaling that they are trying to start a very attractive loan package for homeowners.

OK, so you will be the first one to jump.

Do you think other banks in Singapore will follow suit?

I think it all depends on the respective banks' strategies and whether they are able

to land out their deposit effectively to their targeted groups.

I mean, in addition to housing loan generally, the business loan side has also been slow.

Banks are a bit reluctant to land out to businesses because of certain uncertainties

or certain sectors that were actually not able to fulfill the bank's requirements.

So therefore, it's really something that we need to monitor.

That's the macro perspective, Alfred.

But on the individual level, people might be saying, I am going to be earning less money from my deposits.

This is not very good.

Like, what does it mean for the individual?

Well, I think the banking sector is really very competitive.

I mean, you will be would have their strategic reasons to making their cards.

But there are also the new players like the digital banks.

They are also offering very attractive deposit rates.

And at the same time, they have less conditions, unlike the local banks.

Because you need to do salary credit things.

You need to swipe your credit cards, minimum amount.

At the same time, you must purchase investment.

So it may not actually get those kinds of interest rate that they publish.

OK, a lot of people are hoping that the Fed will cut its rates in 2024, maybe three times.

So do you think people should be waiting a little longer for a better bank interest rate if they want to borrow?

Now, it's very difficult to predict the interest rate trend, right?

I mean, of course, early this year, market consensus is that no Fed is going to cut three

times in the second half of the years.

But we have been actually questioning our clients, right?

Not to put in too much of such expectation.

Because inflation rate is still high in the US.

And in fact, the February data has shown that yes, actually, each higher.

So and of course, US Federal Reserve have also indicated that they are actually not in a hurry to cut the interest rate.

So it's our opinion that this year interest rate will stay high.

That could probably be one or two cards by the second half of the year, right, in order

for them to, you know, engineer a soft landing of the economy.

And I think the expectation of a big card, I think, is not very practical.

Okay, Alfred Chia, he is CEO of SingCapital, which is a financial advisory firm.

Before making any decisions based on the information in our programme, please consult

your own financial advisors to take into account your investment objectives, financial

situation and individual needs.

source: CNA

Singapore Today's Lance Alexander and Daniel Martin spoke with Alfred Chia, CEO, SingCapital, about what revised interest rates could mean for bank customers.

Impact of revised interest rates on bank customers

<div class="iframe-wrapper"><iframe src="https://www.youtube.com/embed/dPXJX391jpY?feature=oembed" width="640" height="360" frameborder="0" allowfullscreen="[object Object]"></iframe></div>Almost half of Singaporeans do not have enough emergency funds to cover them for six months in a crisis, and 45% do not have enough funds for their family needs for the next year.An emergency fund is crucial as it provides a financial safety net for unexpected expenses such as medical emergencies or job loss. The first step is to consider how much you need, which varies with individual circumstances such as job stability or consumption patterns.A general rule of thumb is three to six months of monthly living expenses plus loan commitments. Self-employed individuals with an inconsistent income flow should have six to 12 months of emergency funds. The next step is to decide where to stash the emergency fund.It should not be invested with regular savings for home purchase or retirement planning, as it should provide liquidity and safety. High-yielding accounts, investment platforms with money market solutions, and Singapore government saving bonds are suitable options.People in different stages of life have different requirements for an emergency fund. For instance, families with children and dual incomes need to plan for various scenarios, including the possibility of both losing their income.Self-employed individuals should build their emergency fund early and cater to their critical consumption needs before buying other expenses. Keeping the emergency fund up to date as life priorities evolve is also essential.Source: CNA Insider

Almost half of Singaporeans do not have enough emergency funds to cover them for six months in a crisis, and 45% do not have enough funds for their family needs for the next year.

An emergency fund is crucial as it provides a financial safety net for unexpected expenses such as medical emergencies or job loss. The first step is to consider how much you need, which varies with individual circumstances such as job stability or consumption patterns.

A general rule of thumb is three to six months of monthly living expenses plus loan commitments. Self-employed individuals with an inconsistent income flow should have six to 12 months of emergency funds. The next step is to decide where to stash the emergency fund.

It should not be invested with regular savings for home purchase or retirement planning, as it should provide liquidity and safety. High-yielding accounts, investment platforms with money market solutions, and Singapore government saving bonds are suitable options.

People in different stages of life have different requirements for an emergency fund. For instance, families with children and dual incomes need to plan for various scenarios, including the possibility of both losing their income.

Self-employed individuals should build their emergency fund early and cater to their critical consumption needs before buying other expenses. Keeping the emergency fund up to date as life priorities evolve is also essential.

Source: CNA Insider



Where You Should Stash Your Cash In Case Of A Financial Emergency

<figure><a href="https://cdn.bloghunch.com/uploads/ywZ0VpKPFQ1rtqMR.webp"><img src="https://cdn.bloghunch.com/uploads/ywZ0VpKPFQ1rtqMR.webp" mediatype="img" alt="ssb-fixed-deposits-t-bills" width="800" height="405.078125" dataalign="left" caption="" link="" class=""></a></figure>Inflation is slowing, increasing the likelihood of the United States Federal Reserve pausing interest rate hikes. This means investors will be keeping an eye on Singapore Savings Bonds (SSBs), Treasury bills (T-bills) or fixed deposits as they may still be attractive.If rates do fall, this will reduce borrowing expenses and help the bottom line with cost-effective refinancing for real estate investment trusts (Reits), which often rely on debt for acquisitions. Reits may be favoured over alternative income-generating assets, potentially driving up trusts’ unit prices and exposing investors to risks of the real estate sector.However, by incorporating Reits within a comprehensive index portfolio, investors can gain the advantages of diversification across various asset classes and sectors. Changes in US central bank rates affects yields of Singapore Government Securities, which influences SSBs and T-bills, as well as fixed deposit rates.Reits can provide relatively higher yields but come with higher risk due to market volatility. Investors need to do more research when considering different Reits as they come from different sectors, leverage levels and geographical areas.Mr. Chia notes that Singapore Savings Bonds (SSBs) are low-risk, government-backed investments with moderate yields suitable for conservative investors or those seeking stability in their portfolios. Fixed deposits also offer fixed, predictable returns and are appropriate for risk-averse investors looking for capital preservation.In addition, T-bills are very low risk and provide liquidity over six and 12 months, with a rate slightly higher than for fixed deposits. Ultimately, deciding on whether to invest in Reits, SSBs, fixed deposits, and T-bills depends on an investor’s financial goals, risk tolerance and time horizon.

Inflation is slowing, increasing the likelihood of the United States Federal Reserve pausing interest rate hikes. This means investors will be keeping an eye on Singapore Savings Bonds (SSBs), Treasury bills (T-bills) or fixed deposits as they may still be attractive.

If rates do fall, this will reduce borrowing expenses and help the bottom line with cost-effective refinancing for real estate investment trusts (Reits), which often rely on debt for acquisitions. Reits may be favoured over alternative income-generating assets, potentially driving up trusts’ unit prices and exposing investors to risks of the real estate sector.

However, by incorporating Reits within a comprehensive index portfolio, investors can gain the advantages of diversification across various asset classes and sectors. Changes in US central bank rates affects yields of Singapore Government Securities, which influences SSBs and T-bills, as well as fixed deposit rates.

Reits can provide relatively higher yields but come with higher risk due to market volatility. Investors need to do more research when considering different Reits as they come from different sectors, leverage levels and geographical areas.

Mr. Chia notes that Singapore Savings Bonds (SSBs) are low-risk, government-backed investments with moderate yields suitable for conservative investors or those seeking stability in their portfolios. Fixed deposits also offer fixed, predictable returns and are appropriate for risk-averse investors looking for capital preservation.

In addition, T-bills are very low risk and provide liquidity over six and 12 months, with a rate slightly higher than for fixed deposits. Ultimately, deciding on whether to invest in Reits, SSBs, fixed deposits, and T-bills depends on an investor’s financial goals, risk tolerance and time horizon.

Discover why investors are still drawn to SSBs, T-bills, and fixed deposits despite ongoing rate stability. Explore the reasons today.

Impact of revised interest rates on bank customers

Impact of revised interest
rates on bank customers

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