Why I Helped My Mum Open An UOB Stash Account

A few weekends ago, Heartland Boy finally managed to convince his mum to go to the bank and open a new savings account. Now that Heartland Boy is back in Singapore for good, these are the little errands that he can now accomplish with his parents. Anyway, back to the topic of a bank savings account. Heartland Boy’s mum has been studiously stashing away her money in her POSB savings account all her life. For as long as Heartland Boy could remember, POSB was paying her mum an interest rate of 0.05%. This was particularly frustrating as Heartland Boy was earning up to 2.43% interest on his UOB One Account. In the past, Heartland Boy had thought of transferring his mum’s money into his account to help her earn the higher interest rate. However, this was met with a moment of awkward hesitation. The momentary silence would usually be broken by “boy, this is my 棺材本 (money to buy a coffin) you know!” Undeterred, Heartland Boy continues to find ways that will grow his parents’ retirement funds while providing them the necessary assurance.

He finally found it with the UOB Stash Account- a reputable bank offering a relatively high-interest savings account. So it is about time that his mum’s money works as hard as she has all her life.

How Does UOB Stash Account Work?

The UOB Stash Account is a savings account designed to reward account holders up to 1% interest per annum when they save. It serves as a dedicated account for serious and committed savers to squirrel away their savings into. Moreover, it offers the same flexibility as any savings account out there. Customers are allowed to withdraw and deposit the money inside their Stash Account as they please with no penalty or lock-in period. This is really a strong advantage of UOB Stash Account.

The disadvantage is that to qualify for the higher bonus interest, the monthly average balance* (‘MAB’) for that month has to be the same or higher than the previous month.  Therefore, if you withdraw money in a particular month without replenishing it, you simply forfeit the bonus interest rate for that month. So what are the bonus interest rates being forfeited in such instances? The table below would illustrate the relevant bonus interest rate bands.

*summation of each day-end balance in your UOB Stash Account for each calendar month, divided by the number of calendar days for that month

Account balance	Base interest (p.a.)	Bonus interest (p.a.)	Total interest (p.a.)
First S$10,000	0.05%	0.00%	0.05%
Next S$40,000	0.05%	0.75%	0.80%
Next S$50,000	0.05%	0.95%	1.0%
Above S$100,000	0.05%	0.00%	0.05%

As an example, an account holder who deposits $100,000 into the UOB stash account will obtain a total of $825 interest payment in a year. The breakdown is shown below.

Account balance	Base interest (p.a.)	Bonus interest (p.a.)
First S$10,000	$5	–
Next S$40,000	$20	$300
Next S$50,000	$25	$475

As the bonus interest is calculated based on the Monthly Average Balance for that calendar month (eg: May) and credited at the beginning of the following calendar month (June), the holdings in the Stash Account will increase month on month even if the account holder does nothing. Since the bonus interest are tiered at various bands, this also implies that the maximum effective interest rate on the UOB Stash Account is 0.83% p.a. (at $100,000 MAB) or 0.65% p.a. (at $50,000 MAB)

It is important to note that the Stash Account has a minimum balance of $1,000, lest a fall-below fee of $2 per month applies. Even though this fall-below fee is waived till 31 December 2017, Heartland Boy thinks that if one does not deposit more than $10,000 into the UOB Stash Account, then it is not meaningful to even open it. There is also an early account closure fee of $30 if the Stash Account is closed 6 months from opening.

Savings Account Comparison

Honestly speaking, the fact is that UOB Stash Account is definitely not the best savings account in Singapore at this moment. However, there are still takers for the Stash Account because of UOB’s brand name and reputation. Heartland Boy’s mum is one such example. Sometimes there is just no scientific approach towards issues like this.

For comparison sake, Heartland Boy had previously considered getting a CIMB FastSaver account for his mum. This is a very competitive savings account since the first $50,000 gets 1% interest rate per annum. Furthermore, there are no requirements needed to qualify for this 1%. However, this proposition is likely to be more difficult for his mum to digest since CIMB is not one of the top 3 local banks in Singapore. More importantly, the branches are located far from where his parents stay at.  Therefore, it also loses out in terms of convenience.

Limited Time Promotion

For a limited time only, UOB will offer ALL its Stash Account holders a bonus 1.2% interest for the month of November 2017 if it receives 6,000 or more UOB Stash Account applications by 31 October 2017. UOB Stash Account holders will be eligible as long as their Monthly Average Balances for November 2017 are equal to or more than its Monthly Average Balances for October 2017. The table below illustrates how the Promotional Interest Rate will essentially replace the Bonus Interest Rate for the month of November 2017 only.

Monthly Average Balance For November 2017	Base interest (p.a.)	Promotional Interest Rate	Total interest (p.a.)
First S$10,000	0.05%	1.15%	1.2%
Next S$40,000	0.05%	1.15%	1.2%
Next S$50,000	0.05%	1.15%	1.2%
Above S$100,000	0.05%	0.00%	0.00%

For someone who deposits $100,000 into the UOB Stash Account, his or her total interest rate will increase by approximately $31 as a result of the promotional interest rate. UOB states that this promotional interest rate will be credited into eligible account holders within the first 7 working days in December 2017. As consistent with its bonus interest rate payout policy, Stash Account holders with balances above $100,000 will not see their balances above the $100,000 mark qualify for the promotional interest rate.

At the time this article was published (3 November 2017), UOB disclosed on its official website that more than 6,000 people have applied for the UOB Stash Account. This must surely be music to the ears of Heartland Boy’s mum.

If you miss out on the limited time promo, not to worry as you may still apply via Heartland Boy’s affiliate link with SingSaver. Receive $20 if you apply successfully via PayNow.

If you are looking for other high interest savings account, I have done a compilation in this article.

*Note that Heartland Boy receives a small affiliate fee for every successful referral.