Originally Posted by
amk
You cannot make such statement. FHR does not exist prior to 2014.
What you are saying, is a *simulated back testing" result. That is, if we simulate a FHR in the past, with *current promotional composition*, which is subjected to change anytime, what it *would have been* for the past x years.
This is akin of selling a new fund, and saying according to the fund's "current composition", it WOULD have had a past x yrs stellar "performance" of ###%.
Do you know the above way of selling a fund is EXPLICITLY forbidden by MAS ? (because funds selling is a "regulated" activity i.e. u need a license to do it). What it is doing, is taking KNOWN past performance to sell an unknown product. Whoever doing that will have his license revoked by MAS. Simple reason: you can always formulate/"engineer" a product using past records to make it look good/attractive.
I am not saying FHR is a bad rate. I am saying you cannot use simulated past years results as an argument. Especially FHR can be changed solely by one bank at any time and there is no regulation on that. It is easy to have low FHR when rates are predominantly low ("everybody is low anyway"). It remains to be seen when rates start rising, what FHR will behave, will DBS change its composition, etc. FHR has no track record. It's a matter of your judgment and trust. (For example: can DBS commit there is only ONE FHR across the board, not every one having his own "FHR", like "board rate" ?)