Is GXS 3.48% Interest Rate Promotion The Shortest Ever In Singapore?

If you are plugged into the personal finance community, you would have heard by now that GXS was offering 3.48% interest rate for up to $75,000 of your savings. This move came immediately after the Monetary Authority of Singapore (‘MAS’) purportedly lifted the SGD $50 million cap imposed on digital banks. Since 19 July 2023, plenty of bloggers started to write about this offer, to the extent that they had to proclaim they were doing it willingly without receiving any sponsorship or affiliate fees, because the promotion was too good.

On 7 August, the music stopped playing because GXS announced that the interest rate would be lowered to 2.68% from 17 August onwards. That marked a total of 29 days that GXS customers enjoyed this higher interest rate which was a remarkably short period. I have decided to pen this review so that I can remember what is the shortest ever promotion that I have witnessed in Singapore in my 8 years of blogging.

GXS’ 3.48% Interest Rate

At the start of the year, I wrote a blogpost to compare between GXS bank and Trust Bank. At that time, I mentioned that I pocketed about $25 worth of cash and vouchers from signing up as a new user of GXS bank. This represented an effective interest rate of 8.7% for keeping $5,000 with GXS. Excluding the welcome gifts, the interest rate was an effective 3.48%. While it was attractive, it was only limited to $5,000. That was because $5,000 was the maximum amount that one can deposit with GXS due to the cap imposed by MAS. When the high interest rate was limited to $5,000, many were not convinced. Since I was able to find a higher risk-free return than 3.48%, I did not leave any money with GXS after 21 days.

Since MAS purportedly lifted the S$50 million cap on digital banks, GXS had extended its 3.48% interest rate up to $75,000 of an account holder’s savings. This was a game changer because what happened thereafter was a flurry of new account openings and liquidity gushing into GXS. Many new account sign-ups even complained on social media and Reddit forums that the approval process were taking too long which was the antithesis of what digital banks were supposed to be.

Now, let’s recall that as an existing user, I had a chance to top it up to $75,000 to enjoy 3.48% interest rate on all of these amounts. Except that I didn’t because of 2 reasons:

• My emergency funds and savings are earning a risk-free rate that is higher than 3.48%
• I do not have enough savings to max out on other savings account yet

For example, I am already earning higher interest rate in UOB One, OCBC 360 and DBS Multiplier. You can read this article to understand how I get the best interest rate from the banks’ high-yield savings accounts. Admittedly, each of these accounts have requirements to be met but I meet them every month such that my “pivot to move funds out” has to be 3.8%. This happens to be the lower limit of OCBC 360’s threshold for the first $75,000 as shown in Diagram 1.

GXS’ 3.48% Interest Rate Stood For Only 29 Days

Unfortunately, GXS unilaterally revised its 3.48% interest rate downwards to 2.68% almost as quickly as it had extended it in the first place as shown in Diagram 2.

When I first read this piece of news, I cringed. Because I am curious to know who were the “many of those (you)” who would rather have the Saving Pockets’ interest rate revised downwards just because they transact from the Main Account with their Grab and Singtel Dash apps. I cringed even further at its Communications team attempt to use phrases such as “we’ve heard you” to try to sugar coat what’s happening. Had GXS really cared about its customers, it could have accorded 3.48% interest rate to all type of accounts in the GXS Savings Account. In my opinion, we should always call a spade a spade. Regardless, this sudden turn of event has left many new GXS customers with a bitter taste in their mouth as shown in Diagram 3.

They have every right to feel aggrieved as much as GXS has every right to revise the interest rate according to its whim and fancy. This was a calculated move by GXS- betting on huge inertia on its clients’ part that they would be happy with a fair decent return and not move funds. As much as this appears to be a David vs Goliath scenario, the power still resides with the savers/depositors because they certainly can choose to vote with their feet.

This is because there was utmost flexibility in earning the purported 3.48% interest rate in the Savings Pocket(s) in the first place. Therefore, GXS’ customers can consider moving their funds into better alternatives should they deemed it fit. Here are some fuss-free alternatives to consider:

1) UOB Stash – Effective Interest Rate of Up to 3% p.a.

Here’s what a local bank, UOB Bank, has to offer for its UOB Stash Account as shown in Diagram 4.

If you have $100,000 to stash away as your funds for a rainy day, the UOB Stash Account is not too shabby as it is offering 3.01% p.a. Similar to GXS, there is no requirement to perform any tasks to receive such an attractive interest rate.

As I have explained previously in a separate review of the UOB Stash account, my mum uses a UOB Stash Account because of a few reasons:

• She prefers a local bank for the added familiarity and trust
• She is too old to be jumping through any hoops required by the banks’ high-yield savings accounts

Compared to 2.68%, 3,01% is an upgrade and one that is worth the hassle of moving your cash hoard over. But wait, there is an even better offer from CIMB Bank if you are eligible.

2) CIMB FastSaver at 3.5% p.a.

Likewise, I had previously written a review on CIMB’s savings accounts. New to bank customers will be able to enjoy 3.5% p.a. for the 1^st 6 months upon account opening of the CIMB FastSaver in its latest promotion that is valid till 30 September 2023. According to the CIMB website, this is “an online savings account with no multiple condition that earns you a high interest rates”. Well, that is clearly superior to GXS and the amazing benefit is that there is no deposit cap that can earn this 3.5%. I would make hay when the sun is still shining- at least for the first 6 months when this promotional interest rate is valid.

There you have it, there are indeed alternatives out there that can still keep the Singaporean dream alive 😀

This article is published on 20 August 2023

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