Your statement (in bold) is wrong to start with.

6.8% only will be given, if KLIBOR behave within the condition set.
&
it is callable.

I invested in this similar type of investment (KLIBOR based, and callable, not CIMB one).
Guess what, they decided to call back way before the maturity of the structured investment, after 2-3 years running, after situation not favourable.
Return the money to you back earlier, and close the fund.

Since then I never want to invest any investment that is callable.

Risk
The capital is not principal guaranteed if you premature withdraw the fund. (except it is called by the banks)
The investment is under structured type of investment, which is not insured under PIDM
You may get little return (way less than FD rate), is situation not favourable to the fund objective or condition set.

I might be wrong in the interpretation of the fund, as detail of funds posted is not complete.

You never know or can predict, somemore 7 years down the road
With inflation looming, the tendency of Klibor going higher is there.

If Klibor does surge beyond the condition set after 2-3 years, and never go down again, the fund may be running for the rest tenure until 7 years without or little rate (I don't know if there is any payout if situation not favourable, as little info given), if the bank doesn't wish to call back.

You may earn 2-3 years if situation favourable, but you need to commit 7 years in the first place, aka you must set aside the fund for 7 years, (except when there is early call).
It is about commitment of 7 years in the first place, which one needs to bare in mind.

One situation is, you may earn 6.8% for 2-3 years but no/little for the rest 4-5 years, while cannot withdraw a single cent out of it, it is good?

Yes, best situation is earning 6.8% for 7 years, but it must fulfill the condition set, and you wish it is not call back.

I don't mean encourage or discourage, just one must understand the commitment taken.

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Added on March 1, 2011, 12:34 amPS: I considered myself highly interest in it, if it is without callable clause.


This post has been edited by cherroy: Mar 1 2011, 12:34 AM

It is only capital guaranteed if held until maturity or being called back.

If you are the one initial and terminate before maturity, normally there is clause of penalty charge.

There is no such thing of "withdraw at maturity"
Maturity means the product cease and the money return to you already.
You don't need to "withdraw"