I first wrote about this new SmartSaver account from Bank of China on 9 Mar 2016 (see previous post here). It’s been a fairly risk free means of 1.55% for credit/debit card spend ($500 a month), 1% for salary credit (minimum $2000) and 0.6% for 3 bill payments a month. On top of that, the prevailing interest rate is 0.4% for accounts > $50k, so you can easily earn up to 3.55% p.a. with $50k in your account and making sure you tick off every single item on that item as mentioned.
However, come 1 Dec 2016, there will be some change to the BOC’s SmartSaver account.
- 2 tiered interest rates for card spending
Card spend bonus will be reduced to 0.8% if you maintain $500 spend (and AXS payment transactions are now excluded). However, if you increase your spending to $1500 a month, then you get 1.6% p.a.. The 2 most useful cards in Bank of China include the Shop Card – will gives 6% rebate for online and departmental shopping (minimum $500 spend a month) and the Family Rebate Card which gives 7% for dining and 5% for supermarket shopping, Nets ATU, hospital bills (see previous review here). As such, one needs to have these 2 cards in order to maximise the perks!
Note that previously a salary of $2k per month will earn an interest rate of 1%. Now this will be reduced to 0.8%. However, if you are a high income earner who earns >$6k/month, then you will benefit by getting an extra 1.2% interest (by doing nothing!)
While there was a minimum of $5 per bill payment, now the minimum has been increased to $30. Also, the interest rate has also fallen from 0.6% to 0.35%.
This is a new feature which gives an additional 0.6% for amounts above $60k. The base interest rate is 0.4%, so the total interest will be 1% provided you meet one of the 3 (Card Spend, Salary Credit or Bill Payment). Of course, there are other banks out there that can provide better interest so this may not appeal to most people.
If you look at the total bonus interest amount, 1-3 still add up to 3.15%, and with the prevailing 0.4% interest (provided you have $50k in your account), the total amount of interest still adds up to 3.55% provided you show your loyalty to BoC and continue to credit your salary, spend (more) on the credit card and pay your bills regularly. This will inadvertently hit consumers who do not earn as much as $6000 a month, or use just one feature of the program e.g. bill payment every month. Check out the previous summary of the savings accounts with ramped up interest here and decide what is the best for you!