I’ve learned that Standard Chartered is having a rather unique fixed deposit promotion right now that lets you earn miles as your interest.
From now till 31 July, you can open a Standard Chartered fixed deposit account and get 10,000 miles for every S$25,000 you put with them for 6 months. This promotion maxes out at 60,000 miles for a $150,000 fixed deposit.
I’m no expert on the various fixed deposit promotions so don’t take my word as gospel on this. But from clicking through Moneysmart it appears that the next best alternative on the market for a 6 month time deposit seems to be with CIMB, which is offering 1.6% p.a. For a S$25,000 deposit, that means about $200 of interest.
And so we come to that magic figure again of 2 cents per mile (200/10000). That is your opportunity cost of parking the money for 6 months. Is this a deal so amazing you should liquidate all your other investments to jump on it? Of course not. But if you’ve got money sitting around doing nothing, this is a good way to “buy” miles without paying anything out of pocket (I know, I know, opportunity cost)
Remember that you can buy miles at a cheaper rate than 2 cents per mile through the SCB Visa Infinite card.
Don’t feel bad if you miss out on this one.
This is a bad deal for purchasing SQ miles! almost any travel credit card will give better rate (less than 2cent/mile) with other benefits if you pay the annual fee.
i wouldn’t say it’s a bad deal, it’s just not very impressive. 2 cents is par the average for the market. i know that you can get below 2 cents, eg dbs altitude 192.60 for 10k miles and i think the same for citibank premiermiles, but some people ahem ocbc voyage are closer to 2.14 cents per mile
Even though the initial observation doesn’t seem that attractive, if you have $25K sitting around, getting 10K miles + 1.55%pa interest for 10 months doesn’t seem a bad idea after all. Just treat it as a form of diversifying investment portfolio.
10K miles = $200; 1.55%pa = $322.90
yeah but i think the 2 deals are mutually exclusive no? you either go for the 6 month, 10k miles offer, or the 10 month 1.55% pa offer.
Assuming I did not see wrongly:
“From now till 30 June 2016, you can also earn up to 1.60% p.a. interest on a 10-month SGD Time Deposit4 when you deposit minimum fresh funds5 of S$25,000.”
Keyword is “also”, so I assume it’s not mutually exclusive”, unless what they meant is first $25K 10K miles, next $25K fresh funds 1.55%pa.
yeah my reading of this is that you can take the miles offer or the 1.55% pa offer. but i’ve not tried either so i can’t say for sure. given that the 2 deposits are of different duration i’m leaning towards the either/or. note that the 2 promotions are of different periods too- the miles one is till 31 july, the 1.55% pa is till 30 june.
Aaron’s correct – the fine print says:
“No interest will be payable on SGD Miles Time Deposit (“Time Deposit”). Upon maturity, you will be entitled to the return of the principal sum and there will be no renewal of the Time Deposit. “
A few notes here: (A) the two deals (i.e. miles vs 1.55%/1.60%) are mutually exclusive. Common sense tells you that, and any broader interpretation of the word ‘also’ is stretching it too far (B) you cannot compare this term deposit with credit card welcome bonuses. How could you? # firstly, you are expensing money on your credit card (vs. none for the TD), hence you should expect to get a higher ‘return’ in miles # secondly, compare the returns on this TD with whatever investment opportunity costs it entails. If you want to take this a step further, then you… Read more »
yup- agreed. especially on the (B) part. it’s conceptually different from paying cash out of pocket for an annual fee to buy miles.
I don’t think the credit card welcome bonus is being suggested as an alternative for the deposit here.
The cost of welcome bonus is used as a reference for the “value” of the miles. Its perfectly fine to make that reference to show how much the “interest” is worth for people who accumulate miles.
I fully agree with Spk307. The “opportunity cost” concept apply for both forgoing interest pay from other bank and paying annual fee for credit card. The value from redeeming business class ticket is not “opportunity cost”, which is potential maximum value and not apple-to-apple comparison.
@Spk307 & Ding
….I think what you mentioned is even less apple-to-apple…
The key question is how does one quantify the earnings rate premium (CC-vs-TD) without making it too subjective?
To clarify, I see a direct comparisonas being:
TC mileage earnings rate vs returns on alternative investments
(where the miles are valued on the basis of your targeted class of travel …. I mentioned biz, but whatever)
For credit card, the cost of renewal bonus is usually slightly below 2cent/mile, however, the cost for welcome bonus could be much lower (around 1.6cent/mile for SCB or HSBC visa infinite). If you take other benefits (such as PP card for lounge access) into account, the cost would be even lower than 1.6cent/mile, much better than this mile deposit promotion.
sure the CC’s will be better in that sense, but we are talking about getting your lazy cash to work for you, not just the first $200-500.
There aren’t enough CC’s out there to sate a $25k-appetite.