Asked by Anonymous

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
    Answered on 16 Mar 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
      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.
      18 Mar 2019
    • Question Poster
      I see alright thanks for your inputs! Think ill try the product out since there isnt any withdrawal fees after 90 days hahah
      19 Mar 2019