When CIMB recall, they pay you back. Then they came out new one with lower rate. It is up to you if you want to buy the new FRNID with lower rate. Seeing that I benefited from earlier one, just cursing and buy up the new plan with lower rate.

Sorry sorry.. yes, it is for 13 months, not 1 year...

May I ask you this question:

From OCBC FRNID, they projected these "Upper Barrier" interest rates:
1st Year: 3.85%
2nd Year: 4.00%
3rd Year: 4.15%
4th Year: 4.30%
5th Year: 4.45%

Based on this interest rate projection from OCBC, does it mean that the interest rate will go up in next 5 years?

Thanks...

This sounds ok lah.. But it was just too bad CIMB did not allow you to continue
the first plan which brought you more profit. In overall, you made good money,
congratulations to you.

From OCBC FRNID, they projected these "Upper Barrier" interest rates:
1st Year: 3.85%
2nd Year: 4.00%
3rd Year: 4.15%
4th Year: 4.30%
5th Year: 4.45%

Because the RM just briefed me on the phone, so I can only roughly share this with you, it works something like this:
If the interest rate hits higher than 3.85% during the first year (2013), then investors will not earn any interest,
and if the interest maintains below 3.85% during the first year (2013), then investors will earn 4.5% p.a. interest,
and the same apply to the following from 2nd to fifth year.

So I guess your CIMB FRNID worked in this same way.

Tell the RM to fly kite if the RM said FRNID or any structured product is a FD.

I hate banker do not tell customer honestly.

As rule of thumb, do not understand, do not invest.
As it is 5 years commitment, if do not understand, and do not know the clause of the structured product, it can be a long painful 5 years wait if situation become unfavourable that result in capital guaranteed only.

This post has been edited by cherroy: Sep 5 2013, 01:45 AM

No, it doesn't mean anything.

It just means your investment has hedged against the the Klibor rate surge to beyond a threshold.
Just like buying an option, derivatives product if ABC doesn't happen, you get paid, while if happen, you get nothing.

Th potential risk is KLIBOR shoot beyond 3.85%, at third year, and until fifth year, while the structured product is not called back until matured (why bank want to call back if this happen ),
means one get nothing and only get the 1st and 2nd years, of total 7.85%, and need to wait until fifth year for the product to mature, only get back the money.

7.85% for 5 years, it works out 1.57% pa only, which is worst than FD.

While if everything goes find, you get total of 20.75% which average become 4.15%.

So we may have 3 worst, mid, best scenario, based on the info posted, as I have no info about the product.

1. 0% for 5 years, Klibor beyond 3.85% since first years, you are stucked for 5 years, and get back capital guaranteed after 5 years time, long long wait.
2. 1.57%, if Klibor surge beyond 3.85% at 3rd years until 5th years
3. 4.15%.

I am not saying the product is good or bad, just we need to have various scenario outcome, whether it is good or not, depends on individual preference.

It is unlikely Klibor to shoot beyond 3.85% at near future as OPR still at 3%, but we can't rule out anything entirely.
If Klibor does rise and beyond 3.85% in the future, the structured product return may be less than what FD can offer. This is the risk of it, and most important it is not a FD.

Commit 5 years and get 4.15%?
It is good if interest rate is stagnant or go lower in this 5 years.

This post has been edited by cherroy: Sep 5 2013, 02:03 AM

Ha..ha.. if the banker can tell us the truth, then they cannot sell their products..
I never trust the OCBC RM, every investment he says is just good good and good...

This is quite true, never invest in anything that we do not know about it..
Furthermore, this commitment will make us worry for 5 years, 1825 nights cannot sleep well..

All right.. .Thanks so much.. cherroy

This post has been edited by BoomChaCha: Sep 5 2013, 02:06 AM

Thank you so much for the professional explanation..

I put back the 5 pages of OCBC FRNID on my Post #2373 on Page #119
Please let me know if you want me to delete them. Thanks again..

Yes the CIMB Klibor related FRNID is similar. I believe OCBC's one is also Klibor related.

Thanks for the explanation. One question for the third year, should it be
"Th potential risk is KLIBOR shoot beyond 4.15%, at third year" from your above explanation ?

Similarly for the 2nd to 5th year based on the OCBC table below ?
1st Year: 3.85%
2nd Year: 4.00%
3rd Year: 4.15%
4th Year: 4.30%
5th Year: 4.45%

This post has been edited by bbgoat: Sep 5 2013, 08:48 AM

I always tell them if so good why dont yourself invest in it...

Best reply and chances are they tell you they already did

This post has been edited by bearbear: Sep 5 2013, 02:26 PM

Ha ha.. I did ask the RM last time, he said he did not have enough money to invest..

Looks like we're all briefed on the same product, lol...mine's same as yours, and it's hard to understand through the phone, that's why I thought of asking when I see the RM in person. But looks like this 5 years commitment is not as worry-free as your BR's 5 year FD, so I guess you're not going for it, yes?

Thanks for the explanation and other information given here as well

Thanks for the correction, I taught the table is interest rate given as the I do not have the info in the first place (as pic attachment is not available at the time of posting).

The correct one is those are Klibor upper barrier, while if not shoot beyond, one get 4.5%.

So
best 4.5% pa
Worst 0%.

Through your earlier explanation, I have better understanding of my CIMB Klibor FRNID. Thanks !

This post has been edited by bbgoat: Sep 5 2013, 03:37 PM

Went to Ambank Taipan today to deposit 3.55% FD, was told by the Ambank staff new to bank customer need to deposit at least 20K, but I read through T&C not such condition exists. Can anyone please enlighten me?

Withdraw Aus$ FD yesterday at an exchange rate of 2.966 but today goes up at 2.982...still not too bad...capitalize on the +5% offer by Ocbc...