*Updated* 2018 Nov Version available here
*2017 March Version available here
Where do you save or park your spare cash? Have you asked yourself whether you have been doing the right thing?
By looking at the snaking queues at the ATMs, it is not hard to notice that most Singaporeans have a POSB account, and most of the older folks have just one account, or maybe two at most. Don’t get me wrong, POSB is a great bank, and together with DBS, they are the largest bank in Singapore, and confers great stability with good earnings quarter after quarter. However, if you have been passively depositing your salary into POSB and earning a measly 0.05% p.a. interest, then perhaps it is time to do something and make your money work harder for you as there are better options out there.
Since 2014, a few different banks have come up with some sort of package deal that offers you bonus interest provided you meet the requirements – be it salary credit, credit card spending, bill payments, insurance, investments or even loans. The table below summarises (almost) all of the saving programs out there, in an easy to compare format, and you will realise that some programs are pretty similar.
1. Salary credit
For non-working individuals or those who receive monthly payments through cheques, unfortunately this is not for you. For those who earn less than $2000, you can only consider DBS Multiplier, as the rest require a minimum of $2000. (Do note that this $2000 is whatever is credited into your account after CPF deduction and other contributions. For Singaporeans & PR under the age of 55 years old who need to contribute 20% into your CPF, then you will need to be earning $2500 at least) And for DBS Multiplier, you need to fulfil the requirement of $7500 (inflow or outflow) by spending the rest on your credit card, home loan or investment dividends from your CDP account. High income earners who earn more than $10k/month can consider DBS Multiplier even if they do not have the other requirements like credit card spending, home loan or investment dividends as you will earn a basic interest of 1.28%, which is the highest amongst the various banks.
Comparing Bank of China SmartSaver and OCBC 360, OCBC 360 offers a better interest of 1.2% vs BoC’s 1% p.a.
As for Maybank SaveUp and UOB One, salary credit is one of the requirements for bonus interests. It’s really hard to say which is better as it depends whether you can meet the other requirements.
2. Bill payments
Are you already paying your Telco or Power Supply electrical bills through your credit cards? That way, you get bonus points or miles on your credit cards and you can make payments for your credit cards and earn bonus interest on your savings!
Bank of China SmartSaver and OCBC 360 offer 0.6% and 0.5% p.a. bonus interest respectively provided you make 3 bill payments a month. These are ad-hoc payments that you can just make payment there and then.
Maybank SaveUp and UOB One requires you to setup GIRO payments beforehand (i.e. fill up form and submit for GIRO) and each program requires 3 GIRO payments a month as a requirement. Do note though that if you have already submitted your salary for UOB One, then this bill payment is NOT needed and you will not gain extra interest by doing so.
3. Credit Card Spending
Besides making you save, the banks also encourage you to spend to earn credit card rewards as well as bonus interest on your savings! As you can see, BoC SmartSaver, OCBC 360, Maybank SaveUp and UOB One all require $500 of spending every month. For Maybank and UOB, you are restricted to using Maybank Platinum Visa and UOB One respectively, both of which are rebates credit cards and have been discussed previously. Well, the good thing is you get excellent rebates of 3.33% (up to 5% for UOB One) for these 2 credit cards provided you meet the requirements per month for that quarter. For DBS Multiplier, anything goes… the sky’s the limit!
4. The rest
DBS Multiplier requires a minimum of $7500/month of inflow or outflow from your account, which is derived from salary credit, credit card spending, home loan or investment dividends from your shares.
Maybank SaveUp has many options for you to mix and match to come up with 3 products including insurance, loans, unit trust etc.
OCBC 360 also provides 1% bonus interest for insurance and investment but do note the minimum spend required.
One can sign up for all the various accounts provided above, but it is pretty impossible for one to max out the highest yield from every program since you can’t have so many salary accounts! Do note too that there is a tiered interest structure for BoC SmartSaver and UOB One account, so do not be surprised that you do not earn 3.33% for UOB One. For instance, for UOB One, if you spend $500 on your credit card (without GIRO or salary credit), and you have $50000 in your savings, you only earn $800 in interest over 12 months, which works out to an effective interest rate of 1.6%. A preferable strategy is to look at some of the things that you are currently doing or are planning to do such as regular spending on Maybank Platinum Visa or UOB One card or car and home loans, and see if you can capitalise on them. Programs such as OCBC 360, Boc SmartSaver and UOB One can have standalone components e.g. salary credit in OCBC 360, bill payment for Boc SmartSaver and credit card spending for UOB One, so if you have a lot of spare cash to park and prefer a higher than better yield than your usual savings account, then do check out these special programs.
For more information, check out the respective programs here: