Why don’t people know about this secret that is right under their noses? The best Fixed Deposit in town can range from 0.9 to 4% per annum! Agree? if you have better rates, do share them with us! Now, are you aware that local banks pay annual dividends that range from 2 to 5%? Let’s take two big banks in Malaysia and Singapore and see what you would get if you had put 20K aside in either of them.
Maybank would have paid a dividend yield of 8% (March 2020 $7.45/share to Jan 2022 $8.31)
DBS Singapore would have given you a dividend yield of 3.79% (March 2020 $18/share to Jan 2022 $34.82)
Now, if you had bought shares in one of these banks, you would have earned dividends, bonus shares and share appreciation compared to the measly interest given by fixed deposits that had been lazing around!
At the End of Dec 2021:
Your Fixed Deposit Balance would stand at: $ 21600
But if you had bought shares instead, your returns would be as follows:
Maybank: 2300 (Shares Gain) + 1600 (Dividend Yield) + 20000 = $23900
DBS: 16820 (Shares Gain) + 1364.4 (Dividend Yield) + 20000 = $38184
Note: The above calculation is for illustration purposes – it does not incorporate the 6-month dividend suspension by DBS Singapore in 2020.
So, the next time you walk into a bank and the officer recommends a FD plan, do a quick
Check. Nah! I am buying your banks’ shares instead! I need my money to work 3X harder!!
LIC Editor
Learning Investors Community – Series 1
Sources:
https://blog.moneysmart.sg/fixed-deposits/best-fixed-deposit-accounts-singapore/
https://sg.finance.yahoo.com/quote/1155.KL?p=1155.KL&.tsrc=fin-srch
https://sg.finance.yahoo.com/quote/D05.SI?p=D05.SI&.tsrc=fin-srch
