Wednesday, 20 February 2013

The Good Old Days

My parents do not know the idea of passive income, but they save whatever they can and deposit the extra money into a fixed deposit account.  They do not know other options then.

The good old days when I was young, the banks have high interest rates on fixed deposit accounts.  The interest rate was closed to 10% per annum then.

My parent's FD account matured on early November and they used the interest for the children's school books and clothing for the new year.  The interest collected was like bonus for our family.

The bank did not have FD auto-renewal then, and they didn't care if you did not come to the bank to collect interest and renew your FD account.  If you come late to renew your FD, the bank will just stop your FD and will not pay you interest for the lapsed days.  Due to work and other commitment over the years, the mature date for the FD account slowly moved from early November to mid-November.

Later the bank implemented auto-renewal system on FD accounts.  The FD account will get automatically renewed once it matured.  But then the interest rate is on a downward spiral of no return. FD is no longer the "cash cow" that it was.

The bank also have these Financial Advisors, Relationship Bankers, Banking Managers/Officers, etc, etc  These people always call when your FD matured or about to mature and introduce "better" and "higher returns" investment products; that are "superior" compared to the FD account.  Luckily my parents are able to resist these temptations and avoided the Lehman Brother's minibond saga.

My parent's FD is still "active" nowadays, but it is generating pathetic interest.

I will blog about my investment journey in later posts.

No comments:

Post a Comment