No bank is too big to fail and one question that every depositor may ask is how safe is our money in Singapore banks. During the Great Financial Crisis, Citigroup was on the brink of collapse before being rescued by the U.S government, which had to guarantee losses on more than US$300 billion worth of assets and injected US$20 billion into the troubled company. At that point of time, Citigroup’s share price was trading less than US$1, which was the historical record low for the bank.
Fast forward today, Citigroup recovered from the crisis but is no longer the world’s largest bank in terms of assets. However, its share price has surged to close to US$50. Investors who bought the shares back then and held it till today would have made a fortune. But the point that I want to reiterate is that Citigroup was very close to being made bankrupt in 2008 and savers who put all their hard-earned savings in banks may have lost their monies overnight if the renowned bank collapsed unexpectedly.
In the aftermath of the financial crisis, people start to realize that the prospects of bank failures are real even in Singapore. Hence, the Deposit Insurance Scheme and Policy Owners’ Protection Scheme (PPF Scheme) was amended to provide more protection for Singapore depositors. This insurance scheme is needed to protect small depositors’ savings in the event of bank failures.
Safeguard Your Wealth
Take note that the Deposit Insurance Scheme covers aggregated deposits in savings accounts, fixed deposit accounts, current accounts, CPFIS, CPF Minimum Sum and Supplementary Retirement Scheme up to S$50,000. This scheme does not cover securities, stocks, unit trusts or foreign currency deposits. Furthermore, not all banks in Singapore are covered. You may check the list of scheme members here. In the event of the failure of scheme members, Singapore Deposit Insurance Corporation (SDIC) will step in and compensate depositors from the insurance premiums that the scheme members pay every year.
For Singaporeans, it may not be wise to put all the eggs in one basket and place all the life savings in the banks. You certainly don’t want to expose your hard-earned savings to unnecessary risks. The deposit insurance scheme has its limitations and can cover only up to S$50,000, which is not a very big amount of monies. I am quite sure most of the retirees have more than this amount of money for their retirement fund. In addition, there are risks when you invest in stocks and foreign currencies, so this game may not be suitable for everyone.
To preserve your wealth, there are not many other safe alternatives other than buying physical gold. Bullion is deemed by many to have no counter-party risk as you are essentially insuring your assets from the risks of the financial system.
In Singapore, you can choose to buy physical gold from BullionStar, one of the largest online bullion dealers with a store-front shop at 45 New Bridge Road. With BullionStar, you can choose to buy gold or silver bullion online and have them delivered to your home or put them into ‘My Vault’ storage in BullionStar’s secure vault storage facility. Alternatively, you can choose to walk in and buy gold and other precious metals at BullionStar shop and showroom premises.
Setting up an online account is pretty simple and you can choose to pay in different currencies, including Singapore dollar and Bitcoins. In addition, the price is very transparency as BullionStar’s website displays the price premium and spread for each bullion. This allows buyers to make price comparisons online before making the purchase.
BullionStar also offers customers their own minted gold and silver bars with zero spread. They have commissioned world-renowned LBMA-approved Swiss gold refiner Argor-Heraeus to produce these stylish and unique minted 100 gram 99.99 % purity gold bars.
Below are some gold bullion offered by BullionStar that are worth buying:
Singaporeans who still think that they can win the stock market should wise up. The matter of fact is that the odds are stacked firmly against retail investors and those who did not diversify their portfolios are taking on big risks. Just one market correction and their wealth would be gone. Instead of risking your hard-earned money on speculative shares, start buying real physical gold from a trustworthy bullion dealer.
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SG Wealth Builder