About 2 years ago, Heartland Girl embarked on a full-time Masters Programme in Counselling and Guidance at the National Institute of Education. The motivation behind that decision was to help more individuals lead successful, fulfilling, and well-meaning lives in her capacity as a counsellor. It was not an attempt to one up Heartland Boy and prove that she is the smarter one in the household, or so she says. Well, the downside of undertaking a full-time course is that she has to reduce the workload at her full-time employment. As a result, Heartland Girl has repeatedly failed to credit more than $2,000 as her monthly salary in her OCBC 360 Deposit Account. That also means that she fails to meet the critical hurdle of “Salary Crediting” and loses out on the 1.2% per annum interest rate on her deposits. Her initial grumbles and complaints slowly descended into demands for Heartland Boy to resolve the problem. For obvious reasons, telling her to work harder in order to exceed the salary threshold would be akin to marital suicide. Therefore, Heartland Boy tried to scour the globe for suitable savings accounts. It has been a futile exercise thus far until DBS came to the rescue of Heartland Boy by launching the revised DBS Multiplier Account.
How Does the DBS Multiplier Account Work?
A compulsory “Salary Credit” category and any of the 4 other categories to start earning bonus interest rates
To start earning the bonus interest rates above the prevailing 0.05%, it is compulsory for DBS Multiplier Account holders to credit their salaries with any DBS or POSB savings accounts. There’s simply no 2 ways about it. With this pre-requisite met, Multiplier Account holders must choose another “activity” in at least 1 of the 4 categories as shown above to qualify for the bonus interest rates.
The amount of salary credited for that month would then be added to the transactions in any of the 4 categories to aggregate into Total Eligible Transactions for that month. Depending on the Total Eligible Transaction achieved, account holder will subsequently be rewarded with an interest rate in that tier for that month as shown below.
Table 1: DBS Multiplier Interest Rate Table
As an illustration, if the Multiplier Account holder only credits a nett salary of $1,800 in December and spent $400 via his or her DBS Live Fresh Student credit card*, the Total Eligible Transactions in December would add up to $2,200. This will allow the Multiplier Account holder to earn approximately 0.12916%** in interest rate on his savings for the month of December. The account holder’s interest rate for January would then be dependent on the Total Eligible Transactions in January. Note that these bonus interest rates only apply to the first $50,000 deposited inside the Multiplier account.
* Note that only students from selected tertiary institutions are eligible for the DBS Live Fresh Student Credit Card
**1.55% per annum (from Salary Credit + 1 Transaction from the 4 category) / 12 = 0.12916%
To provide even more details and potentially increase the interest rate earned for DBS Multiplier account holders, here are some of the common and popular activities within each of the 4 categories:
For more information on the specific terms and conditions, readers are advised to read the FAQ on the DBS Multiplier website. Having provided an explanation of how the latest DBS Multiplier Account works, here is why Heartland Girl is hopping over to an improved DBS Multiplier Account.
Advantages of DBS Multiplier Account
In Heartland Boy’s opinion, the greatest advantage that the new DBS Multiplier Account provides is its FLEXIBILITY. Unlike other bank savings accounts, a minimum amount is not necessary for DBS to recognize that you have credited your salary. In addition, a minimum spend on credit card is also not required; which again is another hurdle commonly required by its competitors. What these imply are that the account holder is free to customize across the categories in a manner that is best suited to his or her spending behavior. Admittedly, there are still some hoops to jump over, but they have been dramatically lowered in this re-launch exercise.
By affording this flexibility, DBS has removed the pain points of many young adults, and potentially the thorn pricking Heartland Boy since 2015. It is easy to understand why as Heartland Girl will be earning a higher interest rate with DBS Multiplier compared to OCBC 360.
How Does DBS Multiplier Compare to OCBC 360?
| Category | DBS Multiplier | OCBC 360 | ||
| Interest | Requirement | Interest | Requirement | |
| Salary Crediting | 1.85% for eligible transactions between $2,500 – $5,000 | No min. required | 1.2% | >= $2,000 |
| Credit Card Spending | No min. required | 0.3% | >= $500 | |
Table 2: DBS Multiplier vs OCBC 360
With the reduction in her salary, it is also understandable that the thrifty Heartland Girl has some difficulty trying to meet the $500 minimum spend on her OCBC credit card. As a last resort, she would magnanimously foot the bills during date nights and subsequently claim them back in cash once back home. Well, the good news is that she now no longer needs to fret over incurring sufficient minimum spend on her credit card.
Heartland Boy uses the POSB Everyday Card for grocery shopping at Sheng Shiong and earns 5% cash back.
Heartland Girls uses the DBS Live Fresh Credit Card to fulfill her online shopping needs and earns 5% cash back
Given her previous earning and spending behavior, here are the different interest rates that Heartland Girl would have obtained in the new DBS Multiplier and OCBC 360 accounts.
Heartland Girl’s Interest Rate (Source: sofia.com.sg)
Even at the second lowest tier of 1.55%, Heartland Girl is getting a rate better than most fixed deposits. It is also a dramatic improvement over what she has been getting with OCBC 360. Assuming that she has $50,000 in her savings, which is the maximum amount that will benefit from the extra interest rate, Heartland Boy calculated that she will be getting an extra $750 in interest rate annually simply by hopping over!
Conclusion Of The Revised DBS Multiplier Account
As Heartland Boy has illustrated, the revised DBS Multiplier Account would really benefit Heartland Girl. By hopping over, her money would be working harder than her. Having reviewed the DBS Multiplier holistically, it is most ideal for young adults new to the workforce or in some form of semi-employment. It also demonstrates DBS’s commitment to grow with the millennials as their financial commitments increase.
This article is written in collaboration with DBS but the views are his own. If you have questions relating to the DBS Multiplier Account, check out this thread where a group of financial bloggers answered questions in a 1-hour AMA (Ask Me Anything) session on DBS’s Facebook wall.
Hi
Just wondering how would you compare this to BOC SmartSavers?
Hi Jason,
It depends on your earning power and spending habits. Heartland Girl sometimes fails to register $2,000 as her nett income and that is why the Multiplier works in her favour!
For BOC SmartSaver, if you can reach the higher interest rates advertised (such as having $6K nett income and spending $1.5K on credit cards), you will do very well.