With the plethora of product offerings from the consumer banks in Singapore, it can get quite overwhelming to try to understand which bank savings account gives the highest interest rates in 2018. Many of these “hybrid” savings accounts require the account holders to perform a myriad of tasks, or like what the personal finance community likes to call it- jump through multiple hoops. Then again, a gainfully employed person probably can only choose one bank account to credit his or her salary into. Young working adults face the added constraint of being unable to consistently achieve a minimum spend on their credit cards too. Heartland Boy understands that this can be an incredibly frustrating affair because he has also spent significant time to compare the various bank savings accounts in Singapore. With a combination of research and personal experience, Heartland Boy will spill the beans on how to get the highest interest rate on your bank savings accounts.
DBS Multiplier Account – 2% For First $50,000
Ever since the DBS Multiplier Account was launched in late 2017, Heartland Boy and Heartland Girl simply could not get enough of it. Read this review of the DBS Multiplier Account to understand how it works before you can understand the following hacks outlined below. Here are some neat tricks on how they managed to maximise the interest rate for their respective DBS Multiplier Accounts jumping through as little hoops as possible.
- Heartland Boy and Heartland Girl each opened their own DBS Multiplier Account online. It is extremely convenient and only took minutes.
- Subsequently, they went down to the bank branch together and opened a joint POSB Everyday Savings Account bearing both their names. After joint account is opened, they each deposited $250 to ensure that this account does not fall below the average daily balance of $500. [Note that this step must be done in person]
- [Hack 1] Heartland Girl re-directed her Salary crediting into this new joint account by informing her HR department.
- [Hack 2] Under the “Direct Crediting Services” scheme, both Heartland Boy and Heartland Girl changed their respective bank accounts with Central Depository (‘CDP’) to the joint account that they have just opened. This ensures that all future dividends are credited into the POSB Everyday Joint Savings Account. [Note that Hack 2 is still in progress and Heartland Boy cannot confirm that it has achieved its intended effect yet]
Rationale for Hack 1: “Salary Crediting Into Joint Account”
By having only Heartland Girl credit her salary into the joint bank account, and because the joint bank account bears both their names, both Heartland Boy and Heartland Girl will fulfil the salary crediting components of their respective Multiplier Accounts. Note that it must be either a POSB or DBS joint bank savings account for this hack to work. This leaves Heartland Boy eligible to credit his salary with other bank savings accounts (such as OCBC 360) where a higher interest rate is awarded for salary crediting.
The downside is that Heartland Girl must perform monthly transfer regularly to “retrieve” her salary from their joint savings account. If she is not fast enough, she runs the risk that Heartland Boy will lay claim to it first.
Another nifty hack is for both account holders to credit their respective salaries into the joint account. When DBS Multiplier calculates the salary component, it will aggregate BOTH salaries from the joint account! For illustration, if Account Holder A receives nett $2,000 as salary while Account Holder B receives nett $3,000 as salary, DBS recognises $5,000 as salary crediting for both Multiplier accounts. This ensures that both account holders get promoted to the next tier at an accelerated rate!
Rationale for Hack 2: “CDP Dividend Hack”
Since Heartland Boy is an active investor, he receives regular dividends from his equity portfolio that are credited into his CDP account. After setting up the joint bank account, Heartland Boy informed CDP to replace his previous bank account number to the joint bank account. Therefore, when the joint bank account receives future dividends, it would help both Heartland Girl and Heartland Boy satisfy the “INVEST” component of their respective Multiplier Accounts.
Likewise, since Heartland Girl has done the same, the dividends are aggregated when Multiplier tallies the monthly records. Further bump!
By executing these simple strategies, Heartland Boy and Heartland Girl should comfortably achieve a minimum interest rate of 2% on the first $50,000 for their respective Multiplier Accounts.
Bonus Tips For DBS Multiplier
Because any 2 persons can open a joint bank account in Singapore, there is no need to find a spouse just to execute this strategy. Mistress would do just fine, just don’t get caught.
On a more serious note, the Multiplier is the perfect savings account for students. Team up with a family member or find a part-time job (no minimum salary crediting required) to satisfy the salary component. Don’t forget to apply for a DBS Live Fresh Student Credit card to fulfil the credit card category as well!
UOB One Account- 2.43% For First $50,000
The UOB One Account gives high interest rates only if the account holder is able to set aside $50,000 as savings deposit AND able to spend at least $500 on a participating UOB credit card. Find out how the UOB One Account works in this review. When Heartland Boy compares UOB One Account to DBS Multiplier, he ranks the UOB One Account as inferior since the “taller hoops and hence increased difficulty” suggest that is not within everyone’s reach.
Hack 1- Prioritise Your UOB One Credit Card
The most important criteria to get bonus interest rates on the UOB One Account is to achieve minimum spend of $500 on a qualifying UOB Credit Card. Because the interest rate from UOB One Account drops to 0.05% per annum if monthly credit card spend is not achieved, Heartland Boy prioritises the use of his UOB One Credit Card. For example, he automates the deduction of essential regular expenditure such as telco bills on his UOB One Credit Card via GIRO facilities. If these are still insufficient, he has some other tips on how to achieve minimum spending on your credit card.
Hack 2 – Do Not Credit Your Salary With UOB One Account
Another advantage of the UOB One Account is that it does not mandate compulsory salary crediting. Therefore, Heartland Boy advises account holder not to “waste” the salary crediting component on the UOB One Account. Trust him; it can be better utilised elsewhere. To still earn higher interest rates with UOB One Account, simply perform 3 monthly bill payments via GIRO.
Similar to DBS Multiplier, the bonus interest rate only applies to the first $50,000 in your UOB One Account. Therefore, for amounts beyond $50,000, Heartland Boy has to look elsewhere to gain a better interest rate. In summary, if you can spend $500 per month on a UOB credit card and make 3 GIRO payments, the UOB One Account yields an interest rate of 2.43% on the first $50,000 of your deposits.
OCBC 360 Account- 1.8% For First $70,000
The OCBC 360 Account was one of the best bank saving accounts that gave the best interest rates back in 2016. Naturally, Heartland Boy was one of the early adopters. Not surprisingly, Heartland Boy decides to “save” his precious salary crediting allotment to the OCBC 360 Account. Since he is able to credit $2,000 (net of CPF employee contribution) as salary, he enjoys 1.2% interest rate on his deposits. That is a very good interest rate for performing one simple task with the bank.
Heartland Boy easily satisfies 3 online bill payments to earn an additional 0.3%. In addition, he usually fulfils the requirement of spending $500 on his OCBC 365 Credit Card (receive $100 via SingSaver if you are a new to bank customer) as well. This nabs him another 0.3%. Altogether, he can potentially earn 1.8% for up to $70,000 deposited in his OCBC 360 Account.
The BOC SmartSaver would be a similar product offering to OCBC 360 and would benefit those who earns more than $6,000 net and spend more than $1,500 per month of their BOC credit cards.
2.04% Blended Interest Rate On First $170,000
If you have $170,000 parked as emergency cash, here are the blended interest rates that can be achieved from using the 3 popular bank accounts in the combination that Heartland Boy has just described.
That will give you an annual interest of $3,475 or an effective blended interest rate of 2.04% per annum. This ensures that you come out slightly on top of most fixed deposits or other high yield savings accounts such as Citi MaxiGain Savings Account
So if you are flushed with angbao money this Chinese New Year, you should know the best bank to deposit them to earn the highest interest rate for your money! If you are still confused and would like to read more reviews on the various bank savings account, here are some independent reviews submitted by users on Seedly.