Monetary Authority of Singapore (MAS) is consulting the public on recommendations to amend and enhance various features of the Deposit Insurance (DI) Scheme in Singapore.

Two key changes being proposed include raising the coverage limit from S$20,000 to S$50,000 and also to provide coverage beyond the deposits of individuals and charities, to other non-bank depositors such as sole proprietorships, partnerships, companies and unincorporated entities.

The consultation paper can be found here:

Review of Deposit Insurance Scheme in Singapore

MAS invites interested parties to give their views and comments on the proposals contained in the Consultation Paper. Comments should be submitted to policy@mas.gov.sg by 26 March 2010.

NTUC Income just launched their latest tranche of Capital Plus yesterday.

Capital Plus CPN16 is a single premium non-participating plan which offers a guaranteed return of 1.6% p.a. for a 2 year term, available for new and exisiting policyholders. This means an initial investment of $10,000 will have a maturity value of $10323.

The minimum investment is $10000 and can only be bought using cash and funds from SRS.

Application will be closed once they have reached $25m or 14 Dec 2009, whichever is earlier. Application is on a first-come-first-serve basis.

For comparison, the current fixed deposit rates are as follows (figures provided by NTUC):

The table doesn’t include CIMB which currently offers 1.2% for a 12-month fixed deposit and 1.4% for a 24-month fixed deposit.

CIMB has officially launched its retail banking business in Singapore just a couple of days ago. It is currently handicapped as it can have only two branches here. This is because it has only a full banking licence and not a qualifying full bank licence (QFB), which would have allowed it to have branches and off-site ATMs at up to 25 locations.

Nevertheless, they have launched a couple of interesting products to compete with the other banks here.

The CIMB StarSaver online savings and current account is one of them and offers an attractive base interest rate of 0.5% p.a. If you maintain an increasing balance equivalent to increments of $500 each month, the interest rate rises to 1.2% p.a. on the entire balance.

The StarSaver account also provides cheque books for free.

There is a minimum deposit of $5000 required to open the CIMB StarSaver account. There is no fall below fee but if the account is closed within 6 months, a fee of $50 will be imposed.

CIMB also gives pretty decent rates for their fixed deposits. Currently, the promotional rates are at:

1.7% p.a. for 2 years

1.2% p.a. for 1 year

0.75% p.a. for 6 months

0.5% p.a. for 3 months

The minimum deposit required for these promotional time deposits is $10,000.

Maybank has just launched a Singapore Dollar Islamic term deposit called the Deposit-i. This is the first Islamic deposit in Singapore for retail clients.

Maybank’s Islamic Term Deposit-i is based on the Islamic financial principle of Murabaha involving the sale of commodities at a marked-up price between Maybank and you. Profits are determined before placement and so there is no exposure to commodities’ risk. Not only that, you will also be paid upfront profits the next day (one calendar day after cash placement or cheque clearance) instead of upon maturity.

Benefits

• Syariah Compliant
• Competitive profit rates
• Choice of 3,6 and 12 months tenure with interest of 0.5%p.a., 0.625%p.a. and 0.875%p.a. respectively
• Low minimum deposit (S$10k for 12 months and S$25k for 3 or 6 months)
• Pays returns upfront instead of upon maturity
• Customers who are 55 years old or above will enjoy 0.25% p.a. above the prevailing profit rates for 6 and 12 months deposit. However, to enjoy the special rate, their minimum placement is S$25k for 12 months tenure and 50k for 6 months tenure.

Qualifying Criteria

• Fresh funds only. Exclude transfers from existing Maybank accounts and renewal of S$ Fixed Deposit
• A cap of S$250,000 of new deposit per customer
• Offer is valid for a limited period only. Rates are subject to change.
• Not valid in conjunction with other promotions or priveleges (e.g. Privilege Plus Time Deposit) unless otherwise specified
• Term Deposit-i is available as a personal, joint or corporate account. To open a Term Deposit-i account, you need to be at least 15 years of age.

For more information, call Maybank at 1800-629 2265 or visit any of their 22 branches.

Last week, MAS announced that they will be doing a review of the current deposit insurance scheme.

Back when the deposit insurance scheme was started in April 2006, it targeted to fully insure the deposits of 80-90% of individual depositors. A limit of $20,000 per individual depositor per institution was set, allowing 87% of individual depositors to be fully insured.

This coverage ratio has now come down to 83%, the lower end of our targeted range.  MAS is considering raising the coverage limit above $20,000 to achieve a better coverage ratio and provide a better level of protection to depositors.  They are targeting to conduct their review and consult the industry and public on the proposed changes over the next six to nine months, and will seek to implement the revisions to the deposit insurance scheme in 2010.

The consultation paper on the  Deposit Insurance Scheme review for you to read and give feedback can be found here.