This article was first published on 8 February 2019 and updated to reflect changes to the DBS Multiplier Account.
Before you go through the steps below, it is important to sit down and discuss with your other half to decide if you are both ready to create a joint account together.
A joint account serves the purpose of being a shared account between you and your partner. One of the best ways to maximise the interest earned while having a joint account with your other half is to have both a joint account as well as a DBS Multiplier Account.
Step 1: Both Open Individual DBS Multiplier Accounts
The DBS Multiplier as an individual savings account that offers attractive interest rates with requirements that are reasonable to achieve. However, DBS Multiplier accounts are only available as a personal account. This means that DBS Multiplier accounts cannot be joint accounts. If there is more than one account holder to the DBS Multiplier account, you will not enjoy the higher interest rates accorded.
DBS Multiplier Accounts can be easily opened online at your own convenience. Your aim when creating personal DBS Multiplier accounts is to individually maximise the money earned in your individual accounts (up to $100,000) while earning higher interest rates with the help of a joint account.
Step 2: Open Joint Account
Opening a joint account means having both your names as the account holder. For DBS Multiplier account users, this joint account must also be a DBS/POSB account.
There are two different types of joint accounts: Joint-All or Joint-Alternate.
Joint-All: Any transaction in the account must be acknowledged by both account holders.
Joint Alternate: Both you and your partner can make transactions such as withdrawals individually. Unlike a Joint-All account, one party can make a transaction independently without requiring the permission or acknowledgement of the other party. For example, You can both use different ATM cards to withdraw from the joint account.
Step 3: Credit Salary Into Joint Account
The DBS Multiplier recognizes salary credited in any DBS/POSB account, hence it is not necessary to have your salary credited into the DBS Multiplier Account to enjoy higher interest rates. Rather, with a joint account in place, you should both credit your salary into the joint account instead.
Crediting your salary into this new joint account will still ensure that both you and your partner satisfy the salary crediting component of the DBS Multiplier.
When you credit both salaries into the account, both your salaries are totalled and recognised as salary credited, allowing both of you to hit the next tier of the DBS Multiplier.
Combined Salary Credited = Salary of Person A + Salary of Person B
For illustration, Jane earns $3,000 and Peter earns $3,000. Individually, it is likely that even with their credit card spending and investments, they would still fall within the >$2,500 to <$5,000 tier. However, by crediting both salaries into the joint account, the salary credit amount in each of Jane and Peter’s DBS Multiplier account is recognized as $6,000. This bumps both Jane and Peter’s DBS Multiplier accounts into the next tier (>$5,000 to <$15,000).
Step 4: Credit Your Dividends Into Joint Account
Similar to the change in salary crediting, both account holders should also change the direct crediting bank account in CDP from your individual account to the joint account.
Here’s an example of how this would work.
Jane holds stocks that give dividends in January and February. Peter holds stocks that give dividends in May and November. If the dividends are credited into their own individual accounts, Jane only has investment transactions in January and February while Peter only has investment transactions in May and November.
By crediting the dividends from their CDP into the joint account, both Jane and Peter will now satisfy the investments criteria for the months of January, February, May and November. Furthermore, if the dividends credited are a significant sum, it can also help to bump both account holders into the next tier (similar to the salary crediting situation).
There are two ways to do this.
Option 1: Login to CDP, change it under Direct Crediting Service
Option 2: Use the Direct Crediting Service (DCS) offered by DBS
Step 5: Transfer Money To Your DBS Multiplier Account
Your salary is now credited into the joint account. This means that your partner has access to your salary and you have access to his/hers as well.
Remember to transfer your money from your joint account into your own DBS Multiplier to 1) have your own salary to use and 2) enjoy more returns. Keep in mind that the interest is calculated based on the average daily balance in your DBS Multiplier account. Hence, to earn more interest, you should transfer your money as early as possible to your DBS Multiplier account.
Lastly, don’t forget to spend on your credit card to ensure you meet the credit card spending criteria.
While it could be a hassle to have to always transfer your salary and dividends out of the joint account into your DBS multiplier for your own use, you enjoy the benefit of combining both you and your partners’ salaries and dividends for maximum interest.
Creating a joint account requires a lot of trust. If you are ready to take this step to create a joint account with your partner, this is the best way to maximize the interest you both can earn.
(additional reporting done by Sim Kang Heong)