For Etiqa ELASTIQ, what does the prevailing rates mean? Is it like a SIBOR rate? - Seedly

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Asked by Anonymous

Asked on 14 Mar 2019

For Etiqa ELASTIQ, what does the prevailing rates mean? Is it like a SIBOR rate?

In regards to the plan, they mentioned that the interest rates will be 2.02% for the first 3 years, and then based on "prevailing rates" thereafter. Does anyone know what does prevailing rates mean? Is it like a SIBOR rate? And is it possible to view it anywhere?

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Yixiong Chang
Yixiong Chang
Level 5. Genius
Updated on 07 Jun 2019

It just a loose reference to the interest rate environment at that time. The contract wrote ' the crediting rate will be determined by us based on the prevailing rate, subject to the minimum guaranteed crediting rate of 0% p.a '.

So Technically they can set the rates at any percentage, or even zero if they like to. =D But there will lose them clients' monies. In reality what it means is just they will set the rates they deemed to be competitive (while they still can make money).

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Yixiong Chang
Yixiong Chang

18 Mar 2019

No, the 5th year payout does not mean the expected future rate. This is not futures contract. Rather it is the compensation for 'locking in' your money for a longer time. It is the same if u bought an endowment that 'locks' u in for a longer time, therefore u would expect a higher rate of return.
Jer Chun Teoh
Question Poster

19 Mar 2019

I see alright thanks for your inputs! Think ill try the product out since there isnt any withdrawal fees after 90 days hahah