Heartland Boy has been an avid and loyal user of the DBS Multiplier since its first revamp in 2017. He convinced Heartland Girl to jump on the bandwagon and they each own a DBS Multiplier Account under their respective names. Furthermore, they harnessed the advantage of being a couple to multiply their interest income to great effect (pardon the pun). Faced with a declining interest-rate environment, the DBS Multiplier Account is ringing in some key changes from 1 August 2020 onwards. Some of these changes were made with a sensitive touch to ensure that certain groups of people are not left behind as a result of the economic disruption caused by the Covid-19 pandemic. Heartland Boy will also go on to share how he has recently managed to unlock new categories to maximise his DBS Multiplier Account interest rate (2.1% on $100K) in this review.
Higher Interest Rate On First $10,000
(For Those With Zero/Little Income Or Unable To Meet Minimum Total Eligible Transactions of $2,000 Per Month)
The Covid-19 pandemic has already caused record job losses. Besides worrying about the loss of a steady income, some DBS Multiplier customers might also find themselves unable to benefit from the higher interest rate (>$2,000 eligible transactions per month). In recognition of the financial difficulty they could be in, DBS Multiplier Account has lowered the threshold and introduced a new category to enable this particular group of people to unlock a higher interest rate. Here’s how the latest changes will benefit them:
1. Less than 29 Years Y.O. and unable to unlock INCOME category
The income category has always been a compulsory category under the DBS Multiplier Account. The good news is that for those who are less than 29 years old, this would no longer be the case. Instead, all they are required to do now is to perform an eligible PayLah! retail spend transaction* whereby no minimum amount is required for them to be eligible for 0.3% on the first $10,000 in their DBS Multiplier Account. This is higher than the 0.05% base interest that they would have received otherwise. Moreover, the fall-below fee of $5 would also be waived for this group.
*Eligible PayLah! retail transactions refer to payments made to (i) billing organisations on the PayLah! app, (ii) donations to charitable organisations, (iii) payment to merchants by scanning via the QR codes and (iv) in-app, web and express checkouts
2. More than 29 Y.O with little INCOME
For those who are more than 29 years old, they will be eligible for 0.5% on the first $10,000 in their DBS Multiplier Account balances as long as their eligible transactions from INCOME + PayLah! exceed at least $500 per month. Many groups of people would definitely emerge better from this revision. For instance, with their given allowances, NSF would almost automatically qualify now as long as they perform 1 eligible PayLah! transaction. Those operating in the gig economy or are drawing significantly lower pay cheques due to the pandemic should also benefit positively.
Finally, for those who are worried that performing a PayLah! transaction would lower the interest rate awarded to the first $10,000, Heartland Boy is pleased to clarify that DBS has confirmed that the algorithm is such that the account holder would always emerge with the higher interest rate.
How Heartland Boy Maximises His DBS Multiplier Account Interest Rate
Here is how Heartland Boy and Heartland Girl maximise their DBS Multiplier Accounts by effortlessly unlocking 4 categories to achieve an average effective interest rate of 2.1% on their deposits.
1.Income (Salary Credit And/Or Dividends)
Besides each having their own Multiplier Accounts, Heartland Boy and Heartland Girl also have a POSB eEveryday Joint Savings Account that reflect both their names. Somehow, Heartland Boy managed to convince Heartland Girl to credit her salary (only her, not him!) into the eEveryday Savings Account. Since this specific account bear their names, both Heartland Boy and Heartland Girl fulfil the INCOME criterion. This is an enviable achievement and even till today, Heartland Boy still wonder how he managed to pull that off on Heartland Girl!
To leverage the joint account setup further, they also instructed Central Depository (‘CDP’) to credit the dividends from their respective investments into the POSB eEveryday Joint Savings Account. The entire setup is shown in Diagram 2 and a more in-depth explanation of this hack can be found in this article published in 2018.
The great news is that since 1 August, their individual total eligible transactions per month have been further boosted with the expansion of eligible dividends recognised as shown in Diagram 3. For instance, dividends from all markets on DBS Vickers brokerage platform will be recognised. This benefits Heartland Boy as he has recently commenced investing in stocks listed on the HKEX.
2. Credit Card Spend
As Sheng Shiong is just across the road from his house, Heartland Boy shops there to fulfil his household’s grocery needs. For this practical reason, Heartland Boy uses the POSB Everyday Card since he receives 5% cashback. As his grocery bill is approximately $500 per month for a household of 4, he is also able to meet the monthly challenges on the DBS Lifestyle App quite easily. Since she shops online often, Heartland Girl uses the DBS Live Fresh Credit Card.
Another tip is to redeem the free treats such as Gong Cha, Famous Amos and FoodPanda vouchers on the app! From time to time, Heartland Boy has enjoyed these free treats greatly.
3.Home Loan Instalments
One of the most satisfying personal finance decisions Heartland Boy took in 2020 was to refinance from an HDB loan to a bank (DBS) loan. By committing to a 5-Year fixed 1.5% loan package with DBS bank, Heartland Boy will save over a guaranteed $14,000 in interest expenses over the next 5 years. Besides the savings in interest expenses, Heartland Boy and Heartland Girl will also get to unlock this specific category in their Multiplier Accounts.
It does not matter how the proportion of the home loan instalment is split or whether it is serviced in cash or in CPF, the beauty of the DBS Multiplier Account is that it will simply recognise the full amount for both borrowers. As home loan instalments tend to be big-ticket items, Heartland Boy thinks that they really move the needle in terms of total eligible transactions per month. From mid- August onwards, Heartland Boy understands that he will be able to access the Bank and Earn Summary on the go via the DBS digibank mobile app. This is most helpful as it allows him to actively monitor his monthly eligible transactions and inform him how far he is away from the next tier of higher interest rate in one simple glance.
Heartland Boy recently signed up online for CancerCare that is underwritten by Manulife (Singapore) Pte Ltd. He did this to ensure that he unlocks 4 categories and benefits from the higher interest rates for the next $50,000 in his DBS Multiplier Account balance.
It certainly helped that there was also an ongoing promotion (ends 15 August) that gave him 35% off on his first-year premium. After discount, his premium works out to approximately $7 per month. In return, he gets to unlock an additional $100 interest per month. Of course, this is in addition to getting coverage for all stages of cancer, which is what the insurance policy is supposed to do. It is also important to note that DBS Multiplier only recognises this for the first 12 months though. Overall, he felt that the cost-benefit analysis was in his favour and hence he proceeded with the online purchase anyway.
While the Covid-19 pandemic has forced the hands of retail banks to lower the interest rates on their flagship savings accounts, Heartland Boy has also shown that it is possible to emerge better by taking some actions. Both his and his wife’s DBS Multiplier Accounts are now well positioned to ride the latest changes. It also pleases him that account holders with zero or little income or who are unable to meet the minimum total eligible transactions of $2,000 per month are now eligible to earn higher interest rate as a result of the latest revision. This group definitely appreciates every help and encouragement that they can get during this trying period.
N.B. Pls note that DBS Multiplier has revised its interest rates from 1 Jan 2021 onwards (Diagram 5)
This article is written in collaboration with DBS but the views are his own