Where did I transfer my savings from? The answer is POSB/DBS. I have been using a POSB/DBS savings account for a very long time since I was a child. As they have the most ATM machines in Singapore, most people have a POSB/DBS account as their basic savings account. And for the longest time, I've been trying to find out if POSB/DBS has a high interest savings account so that I could consolidate all my money in one bank.
Finally, the time has come!
They have joined the competition to provide a high interest account in the market right now with the revamp of the DBS Multiplier account. This is definitely a game-changer! It is attractive, flexible, easy to use and most important of all, many of us would already have a DBS/POSB savings account which makes it easier to integrate.
The much awaited higher interest account - New DBS Multiplier Account (up to 3.5% pa)
Removing the pain points to get higher interest
The new DBS multiplier account is quite different from the other banks as they have removed most of the pain points to getting higher interest. This is also different from their previous multiplier account which is not that attractive.
Most of us would know that you need a minimum salary credit of at least $2000, pay 3 different bills, meet a minimum credit card spend just to get higher interest from banks such as OCBC, UOB etc. Now, all these will change with the new DBS multiplier account.
DBS allows you to earn higher interest with NO minimum salary credit, NO requirement to pay any bills and NO minimum credit card spend. The minimum interest you can get is 1.55% p.a. just by fulfilling 2 simple requirements with total eligible transactions at $2000 or more per month. You can get up to 3.50% p.a. too by fulfilling more conditions.
Let's see how it works:
1) Basic Requirement - Salary Credit
The first thing you need to do is to have your salary credited into any DBS or POSB savings account. This means if you already have your salary credited to your existing DBS/POSB savings account, you don't have to make additional changes to it.
Remember there is no minimum salary credit to enjoy higher interest.
2) Salary Credit + Additional 1 Other Requirement - Enjoy min 1.55% p.a. and up to 2.08% p.a.
Once you have your salary credited to any DBS or POSB savings account, you just have to meet any one of the following additional requirement:
- Credit card spend
- Investments
- Insurance
- Housing loan
As long as your salary credit and 1 other requirement meets a minimum of $2000, you will enjoy higher bonus interest on the first $50,000 balance.
- For credit card spend, it is applicable to any DBS/POSB credit cards (not applicable to debit cards).
- For investments, it is applicable to unit trusts (including POSB invest saver), online equity trades etc.
- For insurance, it is applicable to any purchase of insurance with DBS/POSB.
- For housing loan, it is applicable to any monthly instalment payment for housing loan with DBS/POSB.
*For insurance and investments (unit trusts lump sum/RSP/invest saver only), it is only applicable to new purchase after opening of DBS multiplier account
These are the different tiers for you to enjoy higher interest for salary credit + additional 1 other requirement:
If you have a higher salary credit plus credit card spend adding up to S$2,500 and above, you will get even higher interest at 1.85% p.a.
3) Salary Credit + Additional 2 Other Requirements - Enjoy min 1.80% p.a. and up to 3.50% p.a.
If you have salary credit + additional any 2 other requirements (as above), this will be the different tiers for you to earn higher interest:
How Much Interest Can You Typically Earn?
I think this new multiplier account from DBS really makes it easier to earn higher interest. Its easier and more flexible than the other existing products out there in the market. Let's do some scenarios and see how much interest can one typically earn?
Scenario 1 - Fresh Graduate with $2000 salary credit + credit card spend
Most fresh graduates are likely to have at least a $2,000 salary credited into their bank. Some might even earn more. For an additional 1 other requirement, the easiest will be the credit card spend. As the new DBS multiplier account doesn't require any minimum salary credit or spending, once you have $2,000 salary credited, you've already fulfilled the minimum criteria.
For the credit card spend, there is no pressure to spend a minimum just to meet the criteria to get a higher interest. Let's just assume that the spending is just $100 and total eligible transactions will be $2,100 which enables one to earn an interest of 1.55% p.a. For a savings of $10,000, total interest earned will be S$153.30 annually.
If this fresh graduate spends more and chalks up $500 in credit card spending per month, total eligible transactions will be $2500, which enables one to earn an interest of 1.85% p.a. For the same savings of $10,000, the interest earned will be S$182.50 annually.
*Note: Most credit cards application require annual gross income of $30,000. If you still hold a student credit card, it is eligible for higher interest criteria as well.
Scenario 2 - Young Working Adult with $4900 salary credit + credit card spend
For a young working adult, he would have rose up the corporate ladder and gotten a higher salary by now. Assuming he has a salary credit with DBS of $4900 and $500 credit card spend, total eligible transactions will be $5400, which translates to an interest of 1.90% p.a. For savings of $30,000, the interest earned will be S$569.40 annually.
Scenario 3 - Fresh Graduate with $2500 salary credit + credit card spend + Investment
Now, if a fresh graduate also makes monthly investments with either DBS or POSB apart from salary credit and credit card spend, he or she will be able to get min 1.80% p.a. For investments, it includes any trading/purchase of stocks done on DBS vickers account or any monthly investments with POSB Invest Saver.
If this fresh graduate has a salary credit of $2500, a credit card spend of $200 and an investment of $100 with DBS/POSB, he or she will get 2.00% p.a. This is higher than most other bank accounts out there currently.
Comparing to other high interest bank accounts
Now, the most important thing is whether the new DBS multiplier account is the best in the market?
I've looked through the account and various interest rate tiers which they have and concluded that they offer the highest interest in the market currently. Just 2 criteria and you will get a minimum of 1.55% p.a.
Let's look at some scenarios to compare against what they would get from other bank accounts such as the OCBC 360, UOB one, BOC smart saver, SCB bonus saver and Maybank SaveUp account:
Scenario 1 - First Jobber with S$2,700 salary credit + $500 credit card spend
For scenario 1, the interest earned on DBS multiplier account is 1.85%. The only bank that match up to this rate is BOC. However, for BOC, the minimum salary credit is $2000 and minimum credit card spend is $500 which is quite restrictive. For DBS, there is no minimum salary credit or credit card spend. Only need to meet above $2000 to get higher interest.
It seems like even the more popular ones like OCBC and UOB does not match up.
| Account balance | DBS | OCBC | UOB | BOC | SCB | Maybank |
|---|---|---|---|---|---|---|
| S$5,000 | 1.85% | 1.55% | 1.50% | 1.85% | 0.88% | 1.01% |
| S$10,000 | 1.85% | 1.55% | 1.50% | 1.85% | 0.88% | 1.03% |
Scenario 2 - Young working adult with S$4,900 salary credit + $550 credit card spend
For scenario 2, the interest earned on the DBS multiplier account is 1.90%. All the other banks fall behind with only SCB being the closest at 1.88%.
| Account balance | DBS | OCBC | UOB | BOC | SCB | Maybank |
|---|---|---|---|---|---|---|
| S$5,000 | 1.90% | 1.55% | 1.50% | 1.85% | 1.88% | 1.01% |
| S$10,000 | 1.90% | 1.55% | 1.50% | 1.85% | 1.88% | 1.03% |
Scenario 3 - Lower waged worker with S$1,800 salary credit + $200 credit card spend
For scenario 3, the other bank accounts clearly does not benefit anyone with less than $2000 salary credit but for DBS, they still give higher interest as long as you can meet a combined eligible transactions of S$2,000 per month. This is a life saver for those who could not qualify for higher interest from other banks due to their salary.
| Account balance | DBS | OCBC | UOB | BOC | SCB | Maybank |
|---|---|---|---|---|---|---|
| S$5,000 | 1.55% | 0.05% | 0.05% | 0.275% | 0.10% | 0.25% |
| S$10,000 | 1.55% | 0.05% | 0.05% | 0.275% | 0.10% | 0.25% |
Conclusion
The new DBS multiplier account clearly distinct itself among the competition of higher interest bank accounts. This will cater to new groups of people who prefer flexibility and avoid the trouble of having to meet minimum credit card spending or pay 3 bills etc.
This will also cater to those who have not been able to meet the minimum salary credit or the pay 3 bills or minimum credit card spending requirements from other banks. Its time to let this group of people earn higher interest too.
For existing POSB/DBS account holders, you just need to open a new multiplier account and put your savings into it to start earning higher interest. You do not have to change your salary crediting arrangements if your salary is already credited to any of your existing POSB/DBS account. It will automatically be detected subjected to T&Cs of eligible salary credit.
To find out more about the new DBS multiplier account click here.
This article is written in collaboration with DBS. All ideas portrayed are independent by SG Young Investment.
Some figures about other competing banks are wrong. Comparisons between banks for different scenarios are does not paint the whole picture. not a well written analysis in my opinion
ReplyDeleteHi hunter,
DeleteYou may want to clarify specifically which part is wrong so i can change accordingly? Scenarios definitely does not reflect all individuals. They are only examples for reference.
it is not a fair comparison. DBS and OCBC is using a one interest for the balance. But UOB is using tiered interest. If the saving account balance is 50,000, then UOB would win with 2.43% effective interest. Most people cannot have higher than 2.2% interest with DBS. (monthly larger than 15,000)...
DeleteHi AwkSu,
DeleteYes that is correct. For people with more savings, they would be able to get more interest from UOB.
Hi, you mentioned 'For insurance and investments (unit trusts lump sum/RSP/invest saver only), it is only applicable to new purchase after opening of DBS multiplier account'. What does new purchase mean in this case if I am currently subscribed to the invest saver? Does this mean I have to unsubcribe, sign up for the multiplier account, then subscribe again? Thanks
ReplyDeleteHi,
DeleteYes. From what i know, apparently it is only for people who subscribe to the insurance or investment after opening the multiplier account then they can get higher interest on that condition.
Have you heard of the POSB SAYE saving account? Is that good?
ReplyDeleteHi,
DeleteYes I've heard about it. From what i know, i think there are some limitations to the SAYE such as no withdrawals can be made.