01 June 2015

How Can We Stretch the Interest on our Bank Savings Accounts?

DBS Multiplier

A year ago (has it been that long already?), I came across the DBS Multiplier Account that offers the opportunity for higher interest rates (~2%) from savings. A year since, I've maxed out that account. My salary, dividends and POSB/DBS credit card bills are transacted with my POSB/DBS accounts. So they all count.

I've been earning good monthly interests on the $50,000 in that account.  Any sum beyond that $50,000 however will only earn the pittance savings interest rate.


The UOB One Account

More recently, I came across a similar offer from UOB marketed as the UOB One Account. It is a checking account as well. A minimum balance of $500 is required, else it incurs monthly charges. The wonderful thing is, it ties in with the UOB One Visa Card as well. This is a Visa Card that I already actively use (4 Ways to Reduce Spendings).

It offers two sets of rates which are tiered. In Case A, the rates are offered for card spendings of a minimum of $500 per month. It progresses on to Case B if on top of Case A, there is either (a) crediting of salary into this account, or (b) there are 3 GIRO transactions to it.

UOB One Visa Card

Account Balance in your UOB One AccountTotal Interest ATotal Interest B
First S$10,0001.00%1.50%
Next S$20,0001.50%2.00%
Next S$20,0002.00%3.33%
Above S$50,0000.05%0.05%
  [Source: UOB website]

I figured I ought to be able to able progress to Case B since I already typically spend more than $500 on my UOB One Visa Card, and it shouldn't be too difficult to set up three GIRO transactions to it as well.

Min RequirementPurchases made with UOB One CardRebate Earned
Statement date15 Aug15 Sept15 Oct15 Nov
Total minimum monthly spend tiersiS$300S$300S$300S$30
Minimum number of purchases per statement period.333
 [Source: UOB website]

In fact, as illustrated in the above example, the UOB One Visa Card itself comes with up to 3.33% rebate on credit card bills so as long as the monthly spending threshold is met for all 3 months of that quarter, with at least 3 transactions per month.

Opening An Account

I happened to past by a UOB Branch last week. It was surprisingly empty. So I decided to walk in and open up an account. After getting a service ticket, I was immediately served by a friendly (they usually are) Customer Service Officer. I told you it was empty!

I got my account setup within 30 minutes. All I needed was my NRIC Identity Card and $500. Perhaps it was simplified because I am already an existing UOB customer - I already have their ATM card, Internet Banking account and the UOB One Visa credit card. Quite a breeze.

Savings & Spendings Benefits

If I successfully max this out, it would generate $150 + $400 + $666 = $1,216 a year on a capital of $50,000. An effective interest rate of 2.4%. That's $100+ a month.

And if also spend $1,500 per month on the UOB One Visa Card, that would be a total rebate of $150 x 4 = $600. That's another $50 per month.

Onward to build up the second tranche of $50,000 cash savings!

p/s: Are there better deals worth the while?


Dowz Keh said...

OCBC 360?

Lizardo said...

Dowz Keh,

Indeed, OCBC 360 would be a credible alternative. But it requires that salary be credited to it. Since I have only one salary, guess I can't split payments to different banks. Pity.

Jay said...

Credit the salary with OCBC to get the 1.2%, while paying for the bills with UOB (together with the other criteria) to get the maximum 2.43% EIR.

Lizardo said...

I guess if were to start work today, I could do that. But it's a buggeration now that I have so many things linked to my POSB/DSB account.