This article was updated on 7 February 2019.
When you start working, choosing the right savings account is one of the first financial decisions that you should make. A good savings account should help you earn high interest with minimal inconvenience.
Wait… Why Do I Even Need A Savings Account? Don’t We All Already Have One?
Chances are that you already have at least one savings account under your name. So why do you need another one?
For the most part, those who have yet to start work are likely to be using a basic account that doesn’t provide many benefits. As a working adult, you now have the opportunity to choose a much better savings account that gives you higher interest rates.
Do note that some of these accounts mentioned below have a higher minimum average balance required, after which, a monthly fall-below fee (usually $2) may be charged.
Let’s compare some of the best savings accounts in Singapore that you should be considering.
- OCBC 360, OCBC
- One Account, UOB
- BOC SmartSaver, Bank Of China
- Bonus$aver Account, Standard Chartered
- DBS Multiplier Account, DBS
OCBC 360, OCBC
The OCBC 360 is one of the most well-known savings accounts in Singapore among working adults. That’s because it has been around for a long time and gives a good interest rate to its customers.
However, the past couple of years have seen OCBC revised the interest rates of its widely popular OCBC 360 savings account thrice. Here’s how it currently works.
- Monthly crediting of salary (min $2,000) through GIRO – 1.2% p.a (first $35,000), 1.5% p.a (next $35,000) From December 2018 to March 2019, there will be a promotional rate of 2.0% p.a. (instead of 1.5% p.a.) on balances between $35,000 to $70,000.
- Spend at least $500 on OCBC Credit Cards (min $500) – 0.3% p.a (first $35,000), 0.6% p.a (next $35,000)
- Increase your account balance by at least $500 compared to previous month 0.3% p.a (first $35,000), 0.6% p.a (next $35,000)
- Insure or Invest with – 0.6% p.a (first $35,000), 1.2% p.a (next $35,000)
- Bonus Interest Applies For First $70,000
If you are confused, the table below from OCBC would make it easier to understand.
Put simply, if you have savings of up to $35,000, the effective interest rate that you earn would be lesser than that if you have $70,000.
Choosing a savings account is a long-term decision. So while the promotional 0.5% bonus interest over four months is nice, we will use the declared interest rate structure in our analysis.
Realistic Interest Rate ($35,000 or less): 1.85% (Advertised Interest Rate: 2.45%)
Realistic Interest Rate ($70,000): 2.3% (Advertised Interest Rate: 3.2%)
We put the realistic interest rate at 1.85% for those who have savings of up to $35,000 (and a realistic interest rate of 2.3% for those who have savings of $70,000) because we don’t think it make sense for a person to buy an insurance or investment product, just to earn an extra 0.6% or 1.2% interest for a period of 12 months.
If you have $70,000, the effective interest rate for the OCBC 360 can be quite attractive at 2.3%, even if you do not invest or insure through OCBC.
Who Should Apply: Young working adults who just received their first pay cheque can consider getting an OCBC 360 account and to credit their salary into it. By doing so, they immediately enjoy a 1.2% p.a. interest on their savings. The other tasks such as spending $500 on credit cards and increasing your account balance by $500 each month are optional. However, completing each of them allows you to earn an additional 0.3% per annum (assuming your account balance is $35,000 and below).
If you have savings of between $35,000 to $70,000, the OCBC 360 account gives you higher effective interest rate.
One Account, UOB
For the past few years, the UOB One Account has been the main competitor to the OCBC 360. The interest rates are somewhat similar though the UOB One Account works in a slightly different way.
In August 2018, interest rates for the UOB One Account were revised upwards. We will let the table below do the explaining.
An individual with savings of $75,000, and who is able to meet both criteria (minimum spending of $500 plus three GIRO payments or crediting of salary), stands to earn an effective interest rate (EIR) of 2.44%.
Firstly, to qualify for bonus interest, you have to achieve a minimum spend of at least $500 on your UOB One Card (which by itself, is a great card to own anyway based on the reviews from our readers) and/or other selected UOB cards. Once you have done that, you would have met the first criteria for bonus interest.
In order to earn the second tranche of bonus interest, you have two options.
Option A: Pay three bills monthly via GIRO
Option B: Credit your salary (minimum $2,000) via GIRO
Realistic Interest Rate: 2.44% (based on $75,000 savings)
It’s important to note that though UOB advertises that you get up to 3.88% p.a. interest from the account, this is not really the case.
That’s because the 3.88% interest rate only applies to savings that are from $60,000 to $75,000. In other words, in order to get this 3.88%, you first have to accept the lower interest rates the account gives you on your first $60,000.
This step-up interest rate structure means that the effective interest rates that the UOB One Account gives differ, depending on the balance in your savings account.
Who Should Apply: Assuming you have $75,000, the UOB One account gives an effective interest rate of 2.44%. This is higher than the OCBC 360.
In return, you only need to spend $500 on the UOB One card and either credit your salary or pay three bills online. This is less actions required compared to the OCBC 360 and yet you earn a higher interest.
The catch here is that you MUST spend $500 on the UOB One Card for you to qualify for any bonus interest. Otherwise, you don’t get any interest even if you fulfil the other requirements. Also, you want to have about $75,000 in savings. For instance, if you only have $10,000 in savings, then you would only be earning an effective interest rate of 1.85%.
BOC SmartSaver, Bank Of China
We once said the BOC SmartSaver had the best savings account in Singapore and got punk’d by them on the very same week when their criteria were changed. How do they fare now? Here are some of their perks.
- Crediting of salary (min: $2,000) – 0.8 % p.a. If salary credited is $6,000 or more, interest rate is 1.2% p.a.
- Credit card spend (min: $500) – 0.8% p.a. If credit card spend is $1,500 or more, interest rate is 1.6%
- Perform 3 bill payment, or BOC Mortgage repayment – 0.35%
- Bonus Interest – If you fulfilled at least one of the requirements above, you will receive 0.6% p.a. on funds above $60,000, subject to a maximum of $1,000,000.
Realistic Interest Rate:
1.95% is what most people can expect based on the usual criteria being met (e.g. crediting of salary, spending $500 on credit cards, online bill payments)
For higher earners with a take home salary of $6,000 or more, and who can spend at least $1,500 on their BOC credit cards, an interest rate of 3.15% is achievable.
Who Should Apply: If you are a young working adult starting at an average salary, the BOC SmartSaver will work out to be quite similar to the OCBC 360 (BOC: 1.95%, OCBC: 1.85%). However, if you are a high-income earner with a take-home salary of $6,000 or more plus you spend $1,500 per month on your credit card, then the BOC SmartSaver is a very attractive savings account to consider.
Bonus$aver Account, Standard Chartered
On paper, the Standard Chartered Bonus$aver Account gives the highest effective interest rate in Singapore at a very impressive 3.88% p.a. This is currently unmatched.
* The 1.88% interest rate shown on card spend from the screenshot above includes the prevailing interest rate. The prevailing interest rate for your entire deposit balances less than S$200,000 is 0.1% p.a. and 0.2% p.a. for entire deposit balances more than S$200,000.
# 1 Card Spend (up to 1.88% – inclusive of prevailing interest)
You will earn bonus interest on the first S$100,000 of your deposit balance if you meet the minimum card spend.
If you have S$100,000 and charge a minimum of S$500 each month on your Bonus$saver card on qualifying retail transactions, you can earn a bonus interest of up to 0.78% p.a. This increases up to 1.78% p.a. if you charge a minimum spend of S$2,000 each month.
# 2 Salary Credit (1%)
By crediting a monthly take home salary of S$3,000 into your Bonus$aver account, you will earn a bonus interest rate of 1% p.a.
# 3 Invest Or Insure (0.75%)
If you have invested in an eligible unit trust (minimum subscription sum: S$30,000) or purchased an eligible insurance policy (minimum annual premium: S$12,000) through Standard Chartered, you will earn an additional interest rate of 0.75% p.a.
# 4 Bill Payment (0.25%)
By paying three eligible bills, of at least S$50 each, from your Bonus$Saver account via GIRO or online banking, you can earn an additional 0.25% p.a.
Realistic Interest Rate: If you spend a minimum of $500 on your Bonus$saver card, credit your monthly salary (minimum $3,000) and make three eligible bill payments each month, you will earn a basic interest of 2.13%. This makes it higher than the OCBC 360 and the BOC SmartSaver, but lower than the UOB One Account.
However, if you are able to spend $2,000 per month on your Bonus$saver card, your interest rate will increase to 3.13% p.a.
We don’t think it makes sense to invest or insure in a product just to earn the additional 0.75% per annum.
Who Should Apply: The main thing for the Bonus$Saver account is that your salary credit needs to be a minimum of $3,000 per month. If you are able to attain this, the Bonus$aver account offers an attractive interest rate.
DBS Multiplier Account, DBS
The DBS Multiplier account works in a different way compared to the other savings accounts mentioned in this article.
Rather than give account holders bonus interest based on each of the requirements that they meet, bonus interest is given based on the total eligible transactions completed each month.
However, unlike the other savings account, you must make a salary credit and complete at least one other requirement first. Otherwise, you do not receive any bonus interest.
In other words, you have to meet these requirements:
– Monthly crediting of salary (no minimum amount required) and at least one of the following:
– Credit card spend with DBS/POSB
– Home loan instalment with DBS/POSB
– Insurance with DBS/POSB
– Investments with DBS/POSB
The DBS Multiplier account gives you an interest rate based on two factors. 1) The volume of your total eligible transactions each month and 2) the number of categories where you make an eligible transaction in each month
For example, an individual with a take-home salary of $2,000 who spends $400 on his DBS/POSB credit card will earn an effective interest of 1.55% per annum. But if the person adds in an investment or insurance at $100 per month, his/her interest increases to 2%.
Who Should Apply: Those who can’t meet the minimum salary or credit card spending requirement for other savings accounts can consider using the DBS Multiplier account, since it does not impose any minimum requirement in each of these areas.
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