Bank deposit coverage

[Mcfguy]

I understand that for bank/finance insitutions there is a clause that says "Under the deposit insurance scheme, your Singapore dollar deposits in savings, current and fixed deposit accounts with a full bank or finance company in Singapore have a total coverage of up to S$20,000 per institution."

I remember a while back there was also a mention of "The Singapore Government will guarantee all bank deposits till 31 Dec 2010". Does the first statement before the government guarantee makes you feel insecure? Is it wiser to distribute your savings across mulltiple banks?

 

[Roborovskii]

That announcement was to bring confidence to the local banking system in the midst of banking collapse in the US.

Up to date, there are 130 banks in the US that have closed shop this year due to the downturn - http://www.fdic.gov/bank/individual/failed/banklist.html

FDIC (Federal Insurance Deposit Insurance) is the US agency that guarantees customer deposits, and frankly I believe that the FDIC is broke. There are forecasts that the FDIC itself will fail in 2010.

 

In the local context, I guess we're better off since our banks here are in better shape, and there is just a small number of them to insure. Thus, it would'nt cost an arm and leg for the government to guarantee deposits. That said, while your money is safe, it doesn't mean you will be able to withdraw/spend all of it at once in the event of a bank run due to a currency crisis. Placing your savings across different banks is a logical first step, but it only "protects" you against a single bank failure. What happens if there is a systemic failure? A sudden currency crisis will likely cause a systemic failure, and this would affect all banks at the same time. While governments and central banks are equipped to fight an economic downturn, fighting a loss of confidence in a fiat currency is much harder. Got gold?

[Mcfguy]

Great insight, thanks. Truly local bank would just mean DBS/POSB?

 

What about gold? It's at an all time high right now. I'm not really into investing in gold but won't mind learning more about it's potential if any.

[Roborovskii]

As for gold, if you are buying as an insurance against crises, do get physical. ETFs and GLD only for investment. Try to buy the dips (unfortunately dips are rather narrow as the bull market pushes... it's hard to get in at the right time). The general trend is for precious metals to be low during the Jan-Feb period. You could also cost average.

[Solar]

heard somewhere before that gold prices are relative to usd. usd go up, gold go down.

 

gold is supposed to be 'neutral', won't inflate (only currency devalues), and in times of war/disaster, the only 'common currency' that's still recognised everywhere is gold.

 

actually i thought of buying 1-2 yrs back (when price was about 700usd then), but dunno how to keep.. heard also buying the gold coins (bars if rich enough) from banks need to ensure no scratches or else it devalues (correct me if wrong).

[Mcfguy]

True true, now USD is at quite low a value. Thought of converting some USD a while back but have been holding back since it went below 1.4

 

I don't really dabble into gold or any other commodities. Stock/Shares, yes a bit here a bit there. But since robo mentioned about the Jan-Feb dip, maybe can pay a bit of attention to it. If buying into gold physically, storage wise, how?

Edited December 5, 2009 by Mcfguy

[D3badge]

True true, now USD is at quite low a value. Thought of converting some USD a while back but have been holding back since it went below 1.4

 

I don't really dabble into gold or any other commodities. Stock/Shares, yes a bit here a bit there. But since robo mentioned about the Jan-Feb dip, maybe can pay a bit of attention to it. If buying into gold physically, storage wise, how?

 

if dunno where to keep just go rent safebox from DBS, UOB, Citibank...etc. mine DBS medium size less than $200 a year that was in 2005 every year GIRO dunno got price rise or not cause I seldom see my GIRO a/c statement.

 

[City100a]

I understand that for bank/finance insitutions there is a clause that says "Under the deposit insurance scheme, your Singapore dollar deposits in savings, current and fixed deposit accounts with a full bank or finance company in Singapore have a total coverage of up to S$20,000 per institution."

I remember a while back there was also a mention of "The Singapore Government will guarantee all bank deposits till 31 Dec 2010". Does the first statement before the government guarantee makes you feel insecure? Is it wiser to distribute your savings across mulltiple banks?

the second statemnet is true

anyway i dont need to worry not so much money to spread around

 

[Mcfguy]

the second statemnet is true

anyway i dont need to worry not so much money to spread around

 

Nowadays, banks just don't give depositors that safe and secure feel anymore.

[AlFisher325]

Stumbled onto this damn old thread but just want to say this. In the economic environment that we have now, hard for any institution to give a full guarantee on money deposits. Remember the DBS ATM case? The bank covered every single cent that was taken from their customers' account. Only thing is all the bank interest rates now, damn sianz.

[FastFastCar]

The amount covered is 50k now, and as for gold if you buy synthetic ETF, there is always counter party risk