Wednesday, August 6, 2008

Lim & Tan rewards comparison

The moment I signed up with Lim & Tan, I did not do a proper comparison of their reward programmes. A client is given an option whether to receive rewards in terms of their in-house reward points or to receive in terms of NTUC linkpoints. Into thinking that the latter choice is more worth it, I chose to receive in NTUC Linkpoints. In fact, my choice is wrong.

Let me do a comparison on the two.

Lim & Tan reward points
The table below shows the commission rates for SGX trades in Singapore dollar. If you notice from the effective rates, there is a discount of 5% on all tiers of brokerage fees. Taking on the minimum brokerage fee of $25 for example, the discount is actually $1.25 (5% of $25).

Contract Size SGDOnline RatesEffective Rates After Reward Points
Up to $50,0000.28%0.27%
> $50,000 - $100,0000.22%0.21%
> $100,0000.18%0.17%
Min. Brokerage$25 $23.75

NTUC Linkpoints
Now assuming you choose to receive in NTUC Linkpoints. For every $1 of brokerage fee you paid, you will earn 5 NTUC Linkpoints. Taking on the minimum brokerage fee of $25 again, you will earn 125 NTUC Linkpoints for the brokerage fee that you paid. Now bear in mind that the conversion rate of 150 NTUC Linkpoints is equivalent to $1. Therefore the effective discount is actually $0.83 only.

As you can see from the comparison above, it shows that Lim & Tan reward points worth more than the NTUC Linkpoints. I have decided to do a switch into receiving Lim & Tan reward points instead.


Ku said...

Mike, thanks for your comparison about Lim&Tan reward schemes. As I understand, reward points can only be used to offset your next trade with L&T, as such it is not as flexible as NTUC Link points which can be redeemed for groceries, gadgets, etc.

Mike Dirnt said...

Ku yes i understand about your concern.

but to me the dollar savings is still comparable. for example, a dollar saved on brokerage fees means you got a dollar more to spend on groceries. :P

and when you redeem your brokerage fees from L&T, you can effectively earn more net rebates from cash line brokerage promos :)

ku said...

Haha Mike, I understand your point. L&T reward points offer higher rebates in terms of dollar savings indeed. :) But personally I would prefer to get concrete rewards directly on this current trade rather than using this to offset the next trade. This is L&T's trick to lure you into trading more with them, in fact :P If L&T reward points can also be encashed directly (rather than as brokerage offset), then I would consider switching to it. Anyway, I own an NTUC link card which I use to buy my stuff from Fairprice, so the consolidated link points from both L&T and Fairprice can be substantial. :)

Mike Dirnt said...

Ku yes thats the trick to lure you into buying/selling more! :)