Around September 2023 last year, it was revealed in Parliament that the banking industry was studying the concept of a “money lock” to guard depositors’ hard-earned monies against rising scam cases. When I first heard of this development, I immediately gave a thumbs up because I was increasingly concerned about the spate of scams occurring in the past year. Not only have these bank frauds grown in regularity, they have also metamorphosised into something with increasing sophistry. It is therefore a myth that only the vulnerable groups will fall for their tricks because I have personally come across well-educated and vigilant individuals who also became unwitting victims.
Since that announcement, I have been waiting with bated breath for the official releases of these additional security features from the banks. When they were finally rolled out at the end of 2023, I was extremely disappointed because I had expected them to be much better. Specifically, I fail to understand why DBS and UOB banks cannot match up to OCBC’s Money Lock? Here’s my review of all 3 banks’ latest security feature and how they compare against one another in terms of interest rate and the ease of locking and unlocking.
OCBC Money Lock
OCBC Money Lock is OCBC’s anti-scam feature that allows the bank customers to lock their savings in their accounts to protect them from bank scams. Key features include:
- Funds can only be released after the identity is verified by the bank (physically at a branch or at some ATMs)
- Locked funds continue to stay in the depositor’s existing bank account (which can be OCBC 360 Account, Premier Dividend Account etc)
- Funds do not disappear from your current account which mean all of them continue to enjoy the applicable interest rate
The last point is so critical because the locked funds in its flagship OCBC 360 Account will continue to enjoy up to 7.65% interest rate if the criteria are met. In other words, there is no impact on account benefits but the bank customer obtains the additional security of knowing that the monies are protected from scammers. This sealed the deal for me and I will illustrate a step-by-step guide on how I proceeded to apply for OCBC Money Lock.
1) Firstly, log in to either OCBC online banking or OCBC digital mobile app
2) Under Online Banking > Customer Service > Accounts & Cheques > Money Lock as shown in Diagram 1
3) Key in the amount that you wish to protect from scammers. Take note that these funds are truly locked, meaning they also remain unavailable for making even GIRO payments.
4) Click Confirm and once you are done, you will see the amount “locked” under the Home Page as shown in Diagram 2
That’s right, it is that straightforward and fuss-free to gain this additional security feature. As I have demonstrated, I have locked some funds in my OCBC 360 Account and I will continue to enjoy 4.65% in interest rate. I have explained in this article how to get the best interest rates from local banks’ high-yield savings accounts. Besides continuing to enjoy the high interest rate, I now sleep better at night knowing that my funds are protected from these cunning scammers! If I ever need the money, I can unlock it at selected ATMs or go to a bank branch near me. Provision of 2 options give me extra convenience as the queues at a branch can sometimes be very long during peak periods.
If what I have just described is exactly what you have imagined when the Minister made the announcement, that is a fair expectation in my opinion. Surprisingly, the other 2 local banks chose to introduce brand new products that came with enhanced security features but with lower interest rates instead. Now, is that to the overall benefit of the customer? I let you be your own judge.
UOB LockAway Account
UOB’s money lock feature is a new product called the “UOB LockAway Account”. The key differences to OCBC’s MoneyLock are:
- A NEW account opening is required. Approval is instant with the UOB TMRW app or online banking
- Funds can only be unlocked in-person at a UOB branch
- Interest rates are pegged to the UOB LockAway Account which is shown in Diagram 3
As is typical of UOB’s style of advertisement, it is stated that customers can earn up to an attractive 5% in the UOB LockAway Account. However, that is only applicable for a certain tier. When the effective interest rate is considered, the promotional interest rate drops to 2.92% for $125,000 worth of savings locked away. This promotional interest rate is only valid till 31 Mar 2024 and thereafter, the effective interest rate drops to 2.45%.
This effective interest rate is lesser than what would have been earned in a UOB One Account (5%) and the UOB Stash Account (3%). Had UOB done the same thing as OCBC, customers would continue to enjoy the existing applicable interest rates in their accounts but with the added security feature. Rather disappointingly, UOB customers are asked to withdraw their funds from potentially higher yielding interest rate accounts into a new savings account (LockAway Account) if they really cherish this security feature.
Unfortunately, DBS took the same path as UOB with the introduction of DBS digiVault. It is also a new account that would require customers to transfer funds from elsewhere into it. Since digiVault is a My Account, the base interest rate is a shockingly low of 0.05%. This is boosted to 1.8% p.a. during the month of account opening and 3 months thereafter if one opens a digiVault account before 29 Feb 2024. Even then, the boosted interest rate is limited to a cap of $50,000. Funds beyond that cap kept in the digiVault earns the usual 0.05% p.a.
Heartland Boy’s Review
Having explained each of the “money lock” feature by the 3 local banks, it is plain to see why I expressed disappointment at DBS and UOB. As a customer, all I want is the option to lock my money securely from the hands of scammers with the rest of the conditions remaining unchanged. Basically, a ceteris paribus situation.
Before the additional security feature was rolled out, I am already one of those who optimise the interest rates in each of DBS Multiplier, UOB One Account and OCBC 365 Account as explained in this article. However, I am now asked to choose between additional security or higher interest rate and this upsets me. I am not sure why customers are forced to make this trade-off unless the banks can come out to explain that significant costs were incurred to provide this security feature.
This also puts me in a difficult spot because I really want to protect my parents’ hard-earned retirement funds which are placed in the UOB Stash account. I have identified this to be amongst the most fuss-free high-yielding interest account because my parents are too old to be the jumping through the hoops of the banks’ flagship accounts. When I calculated the interest that they had to forgo for LockAway, it is almost like getting them to pay for insurance premium! Yet, I am also aware that the risk of them getting scammed are quite high. That is why I am not surprised that 38,000 accounts have already been opened with $3.2billion locked up despite this disadvantage.
Fundamentally as a bank customer, we just want this additional security to ensure our hard-earned savings are protected. Yet, I can’t help but feel that some saw this as another lucrative opportunity to attract more deposits at a lower cost than usual.
This article is published on 16 Jan 2024
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