Thursday, July 30, 2020

Tiger Brokers Review - Everyone's Platform of Choice

Tiger Brokers is one of the latest fintech brokerages that has come and joined the retail scene in Singapore, providing low-cost competitive offerings to the retail investors.

On the 10th Jun 2020, Tiger Trade launched its online trading access to the Singapore Exchange, adding to its current list of the other two major stock exchanges such as the New York Stock Exchange ("NYSE"), Nasdaq Stock Market ("NASDAQ"), Hong Kong Stock Exchange ("HKEX"), and China Shanghai and Shenzhen Exchange.



When Tiger Brokers first come into the Singapore retail scene, I didn't give it too much attention as I was already having an array of other brokerage platforms to access and transact the Singapore market.

In all honesty, I didn't read too many details into it at first given how other low-cost service providers that have come into the scene were providing a sub-standard service or platform that commensurate with the low pricing retail investors are paying.

There's a quote that says "You Pay For What You Get", which means things that you pay for cheaply are probably not worth mentioning and are likely not very good.

So I went to dig a little deeper about its background and also had a chance to have an hour private chat with its CEO, Mr. Eng Thiam Choon and Head of Business Development, Mr. Ian Leong to understand more from the angle of business development and concerns on its platform, fees, and other features.

Up Fintech Holdings Limited

Up Fintech Holdings Limited is the listed company of the Group, with headquarter in Beijing.

Also known as the "Tiger Brokers" in Asia, it is one of the leading online brokerage firms worldwide focusing on global Chinese investors. Through its "mobile-first" strategy, it aims to provide superior proprietary mobile and online trading platform that offers different products and services such as Stocks, Options, Futures Trading in multiple different markets in the US, HK, SG, and China market. 

I had initial concerns when I heard that the company is listed in the Nasdaq ("TIGR") in the US and given the increasing amount of animosity the US had with China in the past few years since Trump took over the administration, we don't know how it might affect its current listing status in the US and if this will have a subsequent impact to its product offering in the various market should it has to be force-delisted from the US.

Mr. Eng gave an assurance and clarifications that the two are not linked together and that even in the event where the Group has to be delisted from the US market, it will not impact the product offerings they currently have in the market and that investors do not have to worry about their holdings in the company.

He further commented that the legal framework and compliance are all met with the strict SEC standard, similar to how they had to pass the strict due diligence requirement from Monetary Authority of Singapore ("MAS") when they had to apply for the Capital Market Services ("CMS") License.

For Singapore, they currently have a tie-up with ANZ while they have also recently finalized the arrangement set-up with DBS as well.

Lowest Pricing In Town

When it comes to fee structure and commission fees, Tiger Brokers is here to compete with the rest with its very attractive rates that they are currently offering.

The below table is an appended commission charge that they are currently charging for the various market partake.

Based on our conversation, I have also confirmed that they do not currently charge a custodian fee for its clients regardless of the amount size. This makes it very attractive for customers who are using other custodian platforms to transfer to Tiger Brokers to take advantage of the current rates they are offering.

US:

Type
Charges
Charged by
Tiger Broker Charges
USD 0.01 / Share
Min. USD 1.99 / Trade^
Tiger Brokers
SEC Membership Fee
0.0000221 x Value of Aggregate Sales
U.S Securities and Exchange Commission (“SEC”)

HK:

Type
Charges
Charged by
Tiger Broker Charges
0.06%
Min. HKD 15 / Trade^
Tiger Brokers
Trading Fee
0.005% x Trade Value + HKD 0.5
HKEX
Settlement and Delivery
0.002% x Trade Value
Min. HKD 2 and Max. HKD 100
HKEX
Transaction Levy
0.0027% x Trade Value
HKEX
Stamp Duty
0.1% x Trade Value
Hongkong Special Administrative Region Government (“GovHK”)

SG:

Type
Charges
Charged by
Tiger Broker Charges
0.08% / Trade^
Tiger Brokers
Trading Fee
0.0075%
SGX
Clearing Fee
0.0325%
SGX

Options & Margin Financing:

Type
Charges
Charged by
Margin Financing (HKD/USD)
2.99%
Tiger Brokers
Margin Financing (SGD)
3.88%
Tiger Brokers
Options
Ranges from USD 0.99 to USD 2.99
Tiger Brokers

Future Product Offerings In The Pipeline

While not yet cast in stone, Tiger Brokers has plans to launch other product offerings that are currently in the pipeline such as access to Contract for Differences (CFDs) by Q1 FY2021.  

I am excited about this because being a CFD user myself, I can understand how frustrating it is when I have to use multiple platforms to conduct my different trading strategies and consolidate for all the performances in the different platforms.

A one-in-all platform would not only be a nice to have but will be a game-changer when I can finally consolidate all my positions into the one and only platform.

What I Like About The Tiger Features:

The low trading commission fees aren't the only thing that makes Tiger an attractive platform to switch.

There are many other features to explore. Here are some features which I came to appreciate it myself while using it:

1.) Friendly UI/UX Interface

Friendly UI/UX interface designs are always a bonus point when it comes to selecting the right brokerage platform to trade.

The interface works well in both desktop and mobile that makes it very easy for both beginners and advanced players to navigate.

It also has a clean and eye-catching interface with a perfect blended color scheme contrasts between red and green which makes it easier for users to identify the profits and losses. The overlapping of graphs, icons, and information details about the company also makes it very user-centered and easy to digest.




2.) Financial Calendar

A financial calendar (also referred to as an economic calendar) is often used by traders, investors, economists, and media alike to track important events of the economy such as Non-farm payroll, ADP, unemployment data, manufacturing PMI, PPI, and others.

An overview of the financial calendar is important because an individual audience utilizes this information differently. For instance, dividend investors might find the dividend information critical to their needs while traders may implement a specific strategy based on the outlook of certain macro-factors.

The calendar is vital to every user in anticipating workload, maintaining to its schedule, and keeping everyone up to date on relevant information.




3.) Tiger Strategy Lab

The Tiger Strategy Lab is one additional feature that I find interesting.

The lab features different strategies that are based on Tiger's fintech quantitative winning teams.

For instance, one strategy prioritizes companies with high annual revenue to profits ratio while other strategies may prioritize companies with a high return on equity ratio.

This works similarly to a stock screener except for this one it features the companies' return performance based on each strategy selected.

I use this feature to generally float around for ideas on which companies I should be looking for further.

4.) Taking Advantage of Pre-Market and After-Hours Trading Activities

Some of the most important market movements can take place outside of the 9.30am to 4.00pm Eastern Standard Time and I like the fact that the Tiger platform allows investors the option to trade outside the market hours.

For instance, I took the advantage to sell one of my holdings on DSS (Document Security) a few weeks ago on pre-market hours before the market opened. The pre-market trading session is often seen as a prelude to gauge the market reaction and I am glad I managed to sell my holdings at a high right before the market opens. Had I waited for the market to open at 9.30am before selling, I would have made at least 20% lesser as most traders came in to sell their shares. Of course, the reverse can also apply.

One important consideration, however, is that trading volume liquidity is typically much lower outside regular market hours as not all brokerage offers this type of order.


My Experience Opening The Tiger’s Account

Every online process of opening a trading account varies depending on the type of brokerage you use.

While most brokerages require their clients to furnish information such as your full name, address, email, phone numbers, employment status, annual income, and previous market experience, the time required to process such information may take days to weeks before your account can be approved.

In my experience with Tigers, the opening of account process was fast and seamless.

By the time I finished furnishing all the required information online, my account was approved within hours and I was able to start depositing my money into the account which again just took a few hours before the funds are reflected in the account.

Conclusion

So there you have it all the features that I like about Tigers and how some of the features have benefited me.

I am still a relatively young explorer of the platform but I am beginning to see how detailed the feature is. Particularly, I like how I am navigating most of my trading strategy on the Tiger's platform on the desktop.

I would encourage everyone who has not used them to try out their features and see if you like them. At the very least, do take advantage of their free features which you may then choose whether to incorporate into your strategy.

If you like what you see and want to try it yourself, do use my exclusive invitation link below (or Click Here) or invitation code (4321CP). You'd be entitled to a Tiger reward of up to $100 the moment you start depositing and putting your money to work.


Disclaimer: This post contains affiliate links and is written in collaboration with Tiger Brokers. However, all opinions stated are that of my own, based on my experience and services received from Tiger Brokers.

Sunday, July 26, 2020

Yoon Salon: Professional Hair Services Within Your Reach

Every once in a while, it's nice to indulge in treating and pampering ourselves a little better in a fancy salon which for the most part are affordable to the majority of us for our regular hair care needs.

Since the start of the circuit breaker, I haven't been able to get out of the house and go for my usual routine grooming session. As a result, my hair has grown longer and become messy under the circumstance of a very humid condition and stress in the past few months.

Thankfully, under the strict guidelines from the Covid-19 taskforce, the number of Covid-19 cases within the community has gradually come down. As a result of social distancing and proper mask attire, salons and beauty wellness outlets are allowed to reopen under phase 2 on uncompromising guidelines that customers must remain with their face masks on when receiving treatment such as styling or other hair treatments.

I was invited to head down to YOON where one of the sales consultants gave me a full rundown of their latest outlet opening and the services they provide.


About Yoon Salon

YOON is the latest prominent hair boutique that aims to provide the best all-round services to its customers.

Notwithstanding the difficulties Covid-19 has imposed on businesses, YOON has not only remained undeterred by the challenges but also confident that it can capture the right target audience and market share with its exceptional services that it provides to its customers.

They are strategically located in 3 of the busiest districts in Singapore - Havelock, Orchard, and Queensway. You may find the full outlet information as appended below:

Havelock II
2 Havelock Rd, #01-04
Singapore 059763

Midpoint Orchard
220 Orchard Road, #01-02
Singapore 238852

Queensway Shopping Center
1 Queensway, #02-29
Singapore 149053

Havelock II Retail Outlet
I had the chance to visit the outlet at Havelock II where it is located right opposite the Chinatown Point.

The Salon is located inside the retail (some were located in the retail space outside) so I had to scan for the Safe Tracing apps to check-in as part of the safety guidelines implemented by the Government. I had to scan for check-in again upon entering the salon as a safety precaution so you can be sure that the management is taking the measures very seriously for its customers.

The retail space at Havelock II is nicely situated without too much passerby traffic so there's a very secluded and private feeling about the area. There's also a popular Thai restaurant beside which makes it convenient for you to have a decent lunch.

Entrance


Services

Audrey, their Sales Manager, explained that the salon provides a wide range of hair services at the moment which includes:
  • Premium Stylist Cut
  • Premium Dye & Coloring
  • Premium Hair Perming
  • Premium Hair Rebonding
  • Creative Shaping
  • Premium Treatment
  • Bleaching
  • Hair Treatment
  • Wash and Blow
However, what makes the salon stands out from the rest is its customer attentiveness and exclusive one-to-one consultation that it gives to its clients.

For instance, when a customer arrives, he or she would be ushered in for a one-to-one consultation with its stylist. The objective here is to find out the needs of the customer and also if there is any advice that the stylist could give to the customer before his or her session commences. In addition, the stylist would also give a run-down of what to expect during the session, including explaining how the customer's hair condition is, the product she would be using, and also some preventive aftercare to take note post-session.

To ensure top-notch quality services being provided to its customers, each individual will also be asked to take a before-and-after photo. This is to ensure that the outlet maintains a high standard of services that meets the satisfaction of its customers.

Session at only $28


To strive for a quality finishing touch to the end result, the professionals also use quality products for all the services that they provide.

For instance, the MILBON product imported from Japan is being used for its hair treatment service.

While MILBON is not a typical brand that we often hear in the retail commercial space such as L'Oreal or Keratase, it is actually dubbed as Japan's No. 1 Professional Hair Cosmetics brand backed by rigorous scientific research and high performing ingredients to ensure the intensity of the hair's natural flow and integrity.

To illustrate the full process of the treatment, the stylist will first explain the nature of why we often get fizzy hair when we wake up in the morning.

To begin the session, the stylist will first apply a MILBON Primer Accelerator to the locks of a client to enhance the effect of the overall treatment. Next, she will infuse the strands with a MILBON treatment essence to repair and strengthen the cuticles.

After the treatment process, a sealing serum will be coated to the hair for a longer-lasting hair booster effect.

Pricing

YOON is a big hit for all ages and gender, including the younger and middle-class crowd because of its competitive yet affordable pricing.

It is currently having a soft opening launch promotion at $28 for a session that allows its customers to try the services and products at very attractive pricing. I was also being told that it doesn't do any hard selling to its customers should the latter choose not to take its package thereafter.

So head down now and grab that promotion while it lasts!

Spacious area with safe social distancing measures in place

Disclaimer: This post is written in collaboration with Yoon Salon (including a conversation I had with Audrey, one of their consultants). All opinions are that of my own, based on the experience and service I received.

Thursday, July 23, 2020

Why I Think Comfortdelgro (SGX: C52) Is A Strong Recovery Candidate Play

Comfortdelgro (SGD: C52) has been one of the companies that has been affected quite badly since the start of the Covid-19.

It joined the lists of other industries such as airlines, aviation, retail and hospitality industry that is severely impacted by this pandemic crisis.

Since the start of the year, the company has dropped by more than 40% as we saw its share price plunging from $2.37 to $1.40 as of writing today.

One of the most obvious reasons for the plunge is due to the government initiative of a circuit breaker, which lasted two months from April to Jun, before the gradual opening of phase 1 and 2 thereafter.


With the circuit breaker being implemented, the company decided to provide a full rental waiver to its drivers for the 2 months, which based on source is estimated to be around 10,282 fleet to date. After all, what is the use of driving around when most people are forced to lock yourself at home. The goal was to provide a waiver so the drivers do not have to pay rental for its cab. Not the best situation to be in, no revenue for the 2 months but at least they were aided with the waiver.

The full rental waiver could not for obvious reasons last on perpetual needs so the company took measures to cut the waiver by half when the economy gradually reopen following the guidance from the task force.

While there were now people streaming the streets and lining up queues, the crowd pales in comparison as it was before the Covid. Because of this, the company has to gradually lowered the waiver instead of doing it in an instant. Doing so will be catastrophic to both sides as most drivers would rather return the fleet in favor of other available work such as being a social distancing ambassador.

I have no data available on the latest fleet as well as how many fleets were returned during Covid.

Below is a timeline table appended which I will run through in detail on the numbers and impact to the company.


Timeline:

Round 1 and 2 signifies full rental waiver to the drivers, which coincides with the circuit breaker implemented by the government.

Each period runs from 7 April to 5 May, and 6 May to 1 Jun respectively.

The expected rental waiver from the company is expected to cost the company between $45 to $86 per fleet per day based on source from the company's announcement. For the purpose of this computation, I have taken a weighted average of $65 per fleet per day, give or take. 

The total cost to the company based on the above estimation is expected to be around $20m for round 1 and $15.4m for round 2.

This is excluding the Special Relief Fund (SRF) from the Government which is at $10 per fleet per day, so I'm being quite conservative here.

When the government announces the reopening of the phase 1 from the beginning of Jun, the company followed by tapering down its rental waiver to 50%, which is halved from the previous two months.

Even though the government subsequently advance the reopening of the phase 2 from 19 Jun onwards, the company was still extending the 50% waiver to its drivers on goodwill basis, up until 15 Jul (see Round 4).

Round 3 costs the company $10m while the extension of two weeks in Round 4 costs the company a further $5m.

Earlier last week, the company further announced a gradual reduction in its rental waiver to 40% from 16 Jul to 15 Aug. For each sensitivity downward adjustment of 10% in rental waiver, the company would be able to save a cost of about $2m per month. It is not known yet if the company will extend the waiver until the end of Sep but it looks like the case.

If we look closely at most of the government grants that were given to businesses and sectors, most would have lasted until either September or October. This includes the rental waiver from landlord as well as the Job Support Scheme payout. In other words, we could potentially see the company starting to charge a full rental for its fleet as early from Oct onwards.

Barring unforeseen circumstances, we should also look at the economy gradually opening up for more (already we saw cinemas and staycation gradually opening up) with international borders from certain countries being allowed to come in. This should bode well not just for the taxi division but also for its rail and buses, as well as inspection centers as more cars are required to go for servicing.



Operating revenue and profit for FY2019 for its taxi business were at $668.6m and $104.2m respectively which would translate on average of about $167m and $26m respectively per quarter basis.

The impact from the rental waiver is likely to push the company into a loss in the second and third quarter but is likely to rebound back very strongly in the fourth quarter onwards.

Furthermore, there is likely an impairment being done to its taxi fleet given that it's not bringing in much revenue this year, so this is likely to hit the NAV of the company further.

Conclusion

The total impact from the rental waiver I computed came up to about $70m for its taxi division, while I noticed some analysts have estimated the impact to be above $100m. The difference I suspect is due to the earlier waiver being halved as early as Jun and further reduced to 40% as early as 16 Jul while the analysts' earlier estimates were based on full waiver up until Sep.

There are various other factors which we did not talk about in this article including the structural growth of its business, the upcoming bus Sembawang tender and also the railway tender bid in France, all of which is likely to further enhance the diversified business growth nature of the company when the whole Covid situation is over.

I also believe that when international borders are reopen, we should see a flurry of ex-drivers going back to drive, as most have been doing so for a number of years. In this regard, I think the structural story of the taxi business will remain intact.

At the current valuation, I think most of the bad news has been baked in and we should start seeing earnings growth quarter on quarter from Q3 onwards. The only downside is if we are seeing a flurry of second wave coming in, leading to another round of closure, which I think seems unlikely at this point as we continue to see more activities reopening. In this regard, I believe we are awaiting for more positive news to drive the stock upwards as sentiments get better in the wake of this Covid crisis.

*Author is vested at an average price of $1.56

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Tuesday, July 21, 2020

How Covid-19 Has Changed The Whole Dynamic About F.I.R.E

The Financial Independence Retire Early (F.I.R.E) movement has for the past few decades thrived on the ability to act on whatever you like, whenever you want, wherever you are at the expense of not anyone but yourself who can make that decision.

The unprecedented case of Covid-19 which we are currently living through has clearly changed the whole dynamic of retiring, which as part of a subset also includes retiring early.

For many white-collar workers, including myself, we're dealing with actual work by working from home for an extended period of time for the first time in our lives.

I must say it has been a very refreshing and invigorating experience on its own having to deal with it rigorously for the past four months or so, even if it means sometimes having to pick up calls at 8pm or catch up on work during weekends.

It works extremely well for an introvert personality like mine and not for a single moment do I relish the old hate-smell of corporate attire of long sleeve shirt and shoes in such a humid country like Singapore.

Still, the appeal of working from home does not work well universally in consensus with everyone.

While some do appreciate the flexibility of working from home, you may find it a distraction if you are staying in an unconducive environment where you have children running around the house or neighbours that are staggering noisy. Others may also prefer a face to face interaction between colleagues when discussion about work and the frequent use of online tools may be disconcerting at some stage.



However, the biggest knock that Covid-19 has done to members of the F.I.R.E movement, apart from the justifiable obvious concerns on the economic and financial turmoil (dividend cuts in this case), has been the need to make some radical adjustments to their lifestyle and investment, may be yet to be set on permanent.

First, there is a need to rethink about the passive income implications which in most F.I.R.E cases this would constitute either a dividend or rental income strategy.

In an extremely dire situation like today, even companies with good balance sheets are lowering their payout to conserve for more liquidity to tide them through the rough year and uncertain outlook. What this means is a smaller dividend payout for every shareholder and this could make or break for members of the F.I.R.E movement who likely has to depend on it as one of their main source of income.

Second, the persistently dragged bear market might also impact the long term bedrock strategy of a 4% safe withdrawal rate.

While most recession is short in nature, the problem starts to rise when the investment return you put in starts to trend in hugely negative during a bear market and it didn't recover back to 4% return over the long term. This can happen especially if you are invested in the wrong companies or emerging market index that has a few years of lost returns that can't make up for the shortfall.

Third, I noticed that most members of the F.I.R.E movement enjoy travelling as a means to destress and spend their time.

That activity is obviously out of the question right now, with all the social distancing and risks of spreading involved, along with many of the strict measures being imposed by various countries and states, it is likely not to add meaningful experience to your already attained freedom.

These things can and will surely pass as a history in our book at some point but for the moment these people just have to wait for that moment to come while still being able to find things to do at their leisure time.

Last but not least, Covid-19 has presented an enormously good opportunity for the F.I.R.E members of the future in this decade.

We have already seen an accelerated landscape move towards adopting more online e-commerce presence for food delivery, retail shopping, games, payment, healthcare, tuition lessons and even dating platform. There has also been a huge increase towards adopting cashless payment as a way to transact as with the likes of Square, Adyen and Stripe leading the global market share.

The next decade could see an upward shift in the global lifestyle and towards transformational advocacy which will move the next decade of winners in the list.

Many of us will work differently, live differently, shop differently, and perhaps also invest differently.

Thanks for reading.

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Wednesday, July 8, 2020

Jul 2020 - Portfolio & Transaction Updates

No.
 Counters
No. of Shares
Market Price (SGD)
Total Value (SGD) based on market price
Allocation %
1.
Silverlake
200,000
S$0.25
     50,000.00
25.0%
2.
Wilmar
  11,100
S$4.26
     46,860.00
22.0%
3.
Comfortdelgro
  15,000
S$1.47
     22,050.00
10.0%
4.
Baba (HK)
       200
HK260
       9,335.00
5.0%
5.
GA Pack (HK)
    9,000
HK2.83
       4,675.00
2.0%
6.
Ho Bee Land
       300
S$2.12
          636.00
1.0%
7.
Warchest
  
S$5,000
     68,000.00
34.0%






Total



   201,556.00
100%

I wanted to do a quick update this week as I have been extremely busy with work and other engagement that's on my plate in the past few weeks that I don't have much time to write and update on the blog.

With the long weekend coming due to election day (public holiday) tomorrow, I am really looking forward to a much needful rest.

After a strong run up which we've seen in the past couple of months, the portfolio has taken a dip this month due to the recent volatility of a potential second wave hitting various grounds which has also impacted the portfolio components.

The biggest change to the portfolio was the divestment of both Lendlease and CDL Hospitality Trust. After the shares surged strongly on the opening news of phases 1 and 2, I managed to offload them to lock in some profits as I feel that the market may have priced them too optimistically at this point. I split my divestment for both the Reits into two tranches and ended up divesting them at an average price of 73 cents for Lendlease and $1.10 for CDLHT. Since then, Lendlease, in particular, has gone further up to its high of 76 cents before retreating to where it is now somewhere at 66 cents. I may be interested to look at this again should it drops in the 63 to 64 cents range.

On the purchase side, I managed to purchase Wilmar on two tranches with an average price of $4.16 after it announces the filing of YKA IPO in SZH market. The Chinese market has been on a strong bullish run this year and with sentiments high, they might be able to fetch a good valuation to unlock the value in China's plantation side of the business. With Wilmar also to announce its 2nd quarter results sometime in August, I am confident that this will be a bountiful year for the company with its post strong results and the unlocking of the business.

On the other purchase, I also added Comfortdelgro with an average price of $1.61 which the investment is currently underwater due to the company issuing profit guidance on its next quarterly result earnings in August. Still, I like the fact that the company is finally doing some M&A partnership with its other two France counterparts on the tender bid for the rail project in France. This is a good diversification away from their core taxi business which is concentrated mainly in Singapore and looks to struggle in the near term.

Last, but not least, I have been wanting to add a bit of e-commerce and tech plays into the portfolio so I bought in a small bit of Baba at an average price of HKD213. Baba had a strong surge in today's trading due to the announcement of a potential listing of its financial arm.

On my speculative plays, I have divested all my holdings including Wirecard at 20% loss, DSS at 25% gain, and SED at 75% gains. These are all small speculative positions so monies are easy to come and easy to go, plenty of speculative derivative nature inside.



2020 Networth Update

The portfolio has gone down from the previous month of $216,155 to $201,556 this month due to the number of factors.

Apart from the general weakness of the market which has impacted some of the companies in the portfolio, I have also made a few bad trades which resulted in realized losses like Wirecard and DSS and unrealized loss such as CDG.

Second, Jun is the start of the month where I have received a 30% pay cut from my income due to the tightening of the cashflow so this has resulted in negative cash flow for the month for me after netting all expenses. In addition, we have to also top up our children's education fees for Q3 plus a couple of other expenses here and there which makes up what to be a really tough month in Jun and likely the next 2 to 3 months ahead.

Things should look much better from Q4 onwards, so I am really hoping to survive this quarter and hope for a good restart from Q4 onwards. On the goal front, I am still targetting to achieve a net worth portfolio of $250k by the end of the year so I think we'll likely see a strong upsurge back with a couple of luck behind me.


So that's a quick update from my end.

I hope everyone stays safe and vigilant in the midst of all the reopening and be also vigilant of what's to come in the next couple of months as we brave a new world ahead.

Back to work now and c ya!

Thanks for reading.

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Wednesday, July 1, 2020

Revision of Terms and Interest Rates - DBS Multiplier Account (w.e.f 1 Aug 2020)

You might recall that the last update (Link Here) I made with regards to the DBS Multiplier was in May 2019 last year.

Back then, they've enlarged the proportion of the categories and interest rates, making the maximum effective interest rates on applicable transactions up to 3.65% on the first $100k.

Since then, we've seen central banks around the world cutting interest rates back close to zero and this resulted in banks having to follow suit to making revised changes to their savings account and fixed deposits issuance.

With effect from 1 August 2020, the multiplier interests for the Income + 1 and 2 categories are going to come down (as expected) and quite a bit too from the last revision.

The changes from the 1 category are in variance of 0.7% difference for transactions that are above $2k.

That means if you've been previously earning 1.40% from the 1 category, you will be earning only at 0.70% from Aug 2020 onwards. That is equivalent to a 50% drop from the current interests that you are earning.

The higher your transactions the lesser the drop from a percentage point of view, though in absolute the variance is still at 0.70%.

For the 2 categories, the changes are in variance of 0.5% for transactions that are above $2k and it goes lower to 0.4% variance when you hit a transaction of above $5k. The message they are trying to portray is to transact more with DBS and with DBS NAV Planner in place now, it makes sense to consolidate all your accounts into one.

All other qualifying conditions including the 3 plus categories remain unchanged.

However, not everyone is able to transact such a big sum each month.

Thankfully, they've made it more lenient with regards to dividend crediting, which can add up quite a bit each month for those who are dividend lovers.

From 1 August 2020 onwards, eligible dividends now include dividends received from all markets that are transacted via DBS Vickers and also other platform such as unit trusts and Invest-Saver.

It also includes dividends that goes into the SRS and CPFIA accounts, which was not an alternative previously.


Conclusion

I'm going to stick with DBS Multiplier for now because all the other changes such as OCBC 360 and UOB One Savings account have also made drastic changes in the past months so you won't really get to "save" much by moving your funds here and there each month.

I think what is possible is perhaps to take advantage of the expanded servings from DBS such as taking advantage of the NAV budgeting planner and also the expanded crediting of the dividends. With this in place, I think it makes more sense to increase the amount of transactions as well as the number of categories in each transactions as you deem fit.

Thanks for reading.

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