Deposit ceiling

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NHHL

Senior Member
Singapore-English
- Please note the new interest rates and deposit ceilings for the following savings account : Saver Plus - balances over $10,000: 2.75% p.a./balances over $25,000: 2.15% p.a. This account no longer has a deposit ceiling.

- I've checked the meaning of "deposit ceiling" on the Internet, but I couldn't find it. What does it mean in this context?

Thanks so much!

NHHL
 
  • boozer

    Senior Member
    Bulgarian
    Sounds to me as though previously this banking product (Saver Plus deposit) had had a deposit ceiling - i.e. you could not deposit more money than a stipulated maximum amount, say no more than 100,000 dollars. In banking this is somewhat unusual since banks normally want you to deposit with them as much as possible but anyway. Another thing I find financially unsound is the fact that the annual interest rates go down as the balance goes up - it should be the other way around. It could all start making a little more sense if that were a very short-term kind of savings deposit, but I'm still a little puzzled.
     

    Thomas Tompion

    Senior Member
    English - England
    Sometimes banks are forced to limit the levels of deposits in certain accounts by legislation - the accounts may have tax advantages.

    The limitation may also be caused by the fact that the interest rates on the account are favourable, and the banks don't wish to pay that rate on very large deposits. They set the rate to attract a certain sort of saver, but they don't want any individual to take very great advantage of the offer.

    I don't think there is anything financially unsound about these suggestions.
     

    boozer

    Senior Member
    Bulgarian
    1. Sometimes banks are forced to limit the levels of deposits in certain accounts by legislation - the accounts may have tax advantages.

    2. The limitation may also be caused by the fact that the interest rates on the account are favourable, and the banks don't wish to pay that rate on very large deposits. They set the rate to attract a certain sort of saver, but they don't want any individual to take very great advantage of the offer.

    I don't think there is anything financially unsound about these suggestions.
    This is a language forum and I really do not wish to engage in a financial dispute, but:
    1. Your first point is quite understandable and I accept it unconditionally.
    2. The second point... Well, a reasonable bank will never give excessively high interest rates on deposits that are not covered by correspondingly high (and higher!) interest rates on the loans it gives. (Some may do, but here we are in the middle of the credit crunch) That is why I don't believe interest rates could be too favourable. In this narrow context, it seems to me that a deposit ceiling conveys the wrong message to the client: "If you are too rich, go find another bank!" :) Not only is that so, but more flexible banks also have fixed rates up to a certain threshold deposit amount, over and above which they offer individual (more favourable) terms and conditions for their largest depositors. This is why I think this offer is financially unsound.

    Waiver :): I cannot and do not know the specific circumstances and banking market regulations in Singapore. There may be something that explains this paradox.
     
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