SINGAPORE: In a bid to stay competitive amid a rising rate environment, DBS, OCBC and UOB have raised interest rates on their flagship savings accounts twice in the past four months.
UOB announced last week that it would lift the maximum bonus interest rate on its One account to 7.8 per cent a year, more than double from the previous 3.6 per cent.
This follows similar hikes by the other local banks in early-November.
OCBC now pays a maximum of 7.65 per cent a year for its 360 savings account, up from 4.05 per cent, while the highest rate on DBS’ Multiplier account went up from 3.5 per cent to 4.1 per cent per annum.
The rate increases are welcome news for savers following two years of low interest rates amid the COVID-19 pandemic. In fact, two of these savings accounts – OCBC’s 360 account and UOB’s One account – now serve up the highest rates since they were launched.
While mulling the best option for one’s savings, it is important to note that there are conditions to fulfil in order to achieve the highest advertised rates.
Essentially, these flagship savings accounts offer tiered interest rates that go up as customers grow their account balance, spend more on eligible cards and conduct other transactions with the bank such as taking up a mortgage or insurance plan.
For example, DBS’ maximum interest rate of 4.1 per cent applies to the first S$100,000 in a Multiplier account and when the account holder credits an income stream – such as salary or stock dividend – while chalking up at least SS$30,000 in eligible transactions a month across any three categories. These categories are credit card spending, home loan instalments, insurance and investments.
Over at OCBC, the bank pays 4.65 per cent a year on balances up to S$100,000 and if customers credit at least S$1,800 of salary into their accounts through GIRO, increase their account balance by at least S$500 a month and spend a minimum of S$500 on certain credit cards.
The interest rate goes up to 7.65 per cent when customers invest and buy insurance through the bank, although these investment products and insurance policies would only qualify for 12 months of bonus interest.
And to qualify for UOB’s maximum bonus interest rate of 7.8 per cent, account holders will need to have an account balance of no more than S$100,000, credit a salary of above S$1,600 and spend at least S$500 a month on eligible cards.
It is also key to note that this is a tiered interest rate, meaning that it applies to only a fraction of one’s savings – specifically, deposits between S$75,000 and S$100,000.
Hence the effective interest rate on the One account for deposits of S$100,000 is 5 per cent per annum, according to the bank’s website.
