Bank interest rate - discriminatory practices

Some banks offer higher interest rate to attract new deposits and give a lower interest for existing deposit. A customer can earn the higher interest rate by taking the trouble to withdraw the deposit and re-deposit it with the same bank. If the customer expresses the intention to take this trouble, the bank will usually relent and offer the higher interest rate.

The bank is willing to pay a higher interest rate (compared to the miserably low interest rate that is offered to their existing customers). But they hope that some customers are not aware about the difference, or that they do not wish to take the trouble, or do not know how to take the action. The bank hope to extract the maximum profit from these customers.

I consider this practice to be discriminatory and unfair, and goes against the ethos of fair treatment of customers. Some people say that this type of practice is predatory and dishonest. I believe that it has some of these negative elements. Even if it is not illegal, it is quite wasteful to get customers to go through a lot of hassle to enjoy a more adequate interest rate and cause unproductive work for their own staff.

I hope that the Monetary Authority of Singapore will tell the banks that they (the regulators) frown on type of unproductive and discriminatory practices. I am sure that the banks will heed the message from the regulators.

Tan Kin Lian