[wing]

Check this out if you are interested fixed deposit/CDs in USD.

http://www.money-rates.com/cdrates.htm.

I am looking for something similiar fixed investment for Hong Kong dollars. Most experts expect US dollars will fall. It makes sense to hold HKD or RMB today. However, the interest rate for HKD fixed deposits are relatively much lower than USD, according to HSBC.

USD fixed deposits in any US bank are insured up to $100,000 USD by FDIC (US government). Are there something similiar for HKD here in Hong Kong ?

[z754103]

Um, unlike the RMB, the HKD has a hard peg to the USD, so if you want to avoid exposure to USD assets then HKD is not the best currency to be in, for now, as it will track the USD move for move.

[freeier]

a few comments:

--> connecta: on and off the banks will distribute cap guaranteed funds of those sort you mentioned. the funds are not open ended, i.e. there is a subscription period then the period ends and u hold it for 3 years for capital protection etc. not sure the situation now but i know there will be one capital protected one linked to commodity launched in maybe 2-3 months time.

-->grandcider: banks are going to charge u for providing the custodian and sales and all kinds of services. whether load or no load, u'd have to pay for it one way or another. similarly even if you buy stocks at the end you pay the 2 way commission would probably come up to 1%. there is a platform allowing you free purchase and swap of funds but you pay an annual fixed price for it.

IPO > well, based on historical facts it make sense. but i can't be bothered with it these days. the process is too tedious and the amount of shares u are given is too few to justify going thru it.

RMB/HKD > my view is, RMB will be the first to appreciate. maybe by up to 10%. HKD will be forced to depeg against USD and peg to RMB once RMB crosses 7.7 or 7.6 level. so we do have 2 oppt to make money, hold RMB now then wait for the appreciation, then switch to HKD and wait for the depeg. but like mentioned, the interest rate differential is too huge. the hk banks are making tonnes of money out of it.

[connecta]

thanks for replying freeier! well, i know these guaranteed funds (albeit not any one linked to commodities yet). so maybe i will check with with my banker soon.

but usually these guaranteed funds have just a quite poor performance after deducting the yearly inflation and as you mentioned they can not be traded any day like the certificates i meant.

[cooper]

HSBC - International is the right department. (they mainly look after expats, it's a very unique unit)

If you are interested, leave me your contacts. and i shall be in touch in two weeks time if that's okay.

[Curly]

HSBC have been providing me some guidance in savings plans but seem keen to push me into a 'Life Insurance' plan that acts as a Savings plan. The basic idea is that i invest approx. hk$4000/month for 60 years and every 5 years i get a guaranteed bonus of $110,000. I i die, become disabled, or lose my job, HSBC will continue to pay in the $4000/month. The only catch is that if you pull out before 10 years you lose money. But if you pull out after the 10th year (having now received $220,000 in bonuses) you have made appox. 43% over 10 years.

What i'd love to know is if anyone has, or is in the process of participating, in this type of "Every-5yr-Big-Bonus" savings accounts. Do they stack up compared to other savings accounts?

[freeier]

curly > the returns are going to be almost the same as any long term stuffs. they just make u pay more and give it back to you every 5 years. meant more for people that has that kind of needs in terms of cash flow.
i suspect they also can afford to charge you slightly higher for all the complex engineering effort they put in to get the payoff this manner. if you are not a compulsive spender and doesn't have a strong need to splash 100k every 5 years, just stick to a regular saving thing.

[z754103]

If the return is 43% over 10 years, that approximates 3.6% per year. Assuming long term inflation of 3%, that would translate into 0.6% real returns, similar levels to a very low risk investment. I guess you should weigh up what your needs are, your risk tolerance, and how this fits into your overall long term investment plans. For example, how important the security of the guaranteed minimum return and various insurance provisions is to you, versus tying up your money for at least 10 years?

If you find the insurance bundle attractive, what would be the cost to you of buying equivalent protection separately?

Also check how they define disability and unemployment, and if there are any minimum and maximum periods for either. (E.g. will they cut you off if you are unfortunate enough to be unemployed for 3+ years?) Who's underwriting the insurance - since this is such a long term package you want to make sure the underwriter's still around to pay out money in 10-60 years.

[coolgirl]

Originally Posted by connecta

thanks for replying freeier! well, i know these guaranteed funds (albeit not any one linked to commodities yet). so maybe i will check with with my banker soon.

but usually these guaranteed funds have just a quite poor performance after deducting the yearly inflation and as you mentioned they can not be traded any day like the certificates i meant.

Hey connecta,

who do you bank with. Im now shopping for a bank as Im not satisfied with my current banks...

I bought a fund and lost money now i want it plain and safe!

[connecta]

i feel honoured that you ask me as an 'amateur'... well, in HKG it's hang seng and 'somewhere else' it's the company you are working for actually maybe i would have chosen HSBC or something else, but i have been introducted to them by my family. the drawback is of course that their english is usually not so good and i am completely lacking financial cantonese. otherwise i wouldn't have asked here.

but hang seng has got a quite nice offer for the subscription of investment funds:
http://www.hangseng.com/hsb/eng/per/...m02/index.html
it's 1% fee for index funds and 2% for all other funds in comparison to the usual 4-5% subscription fees. what i appreciate as well is the 0.5% switching fee within the same fund house. when there was the big rush downwards around may/june (that's probably where you got caught), i quickly switched to some high yield bond funds. admitted, they went down a bit as well, but due to the nature of this fund it was only around 0.4% loss in comparison to holding the funds (some of them up to 10% loss). just recently i was slowly switching parts of them back to equity funds and have again only to pay 0.5% switching fee. this is quite nice for 'trading' funds without having to loose the complete 4-5% subscription fee. it wouldn't surprise me if HSBC was offering the same.

but in general you would need to decide whether you don't want too loose anything at all (fixed interest, bonds, guaranteed funds), or still go for low (but still existing) risk. previously, funds with capital guarantee as freeier suggested them, were not that much interesting to me, as the potential return was not appealing enough after deducting the yearly inflation rate of 2-3%.

maybe they become more interesting when linked to commodities and offer higher returns. that market has been battled down during the past few months. but just take a look at the oil, steel and gold consumption in china and inda and in combination with iran, lebanon and usa hurricanes, common sense tells me that there might be some interesting development for the next 1-2 years at least, especially if this is even backed up with a capital protection for the worst case scenarios.