This article was written in collaboration with DBS. All views expressed in this article are the independent opinion of DollarsAndSense.sg based on our research. DollarsAndSense.sg is not liable for any financial losses that may arise from any transactions and readers are encouraged to do their own due diligence. You can view our full editorial policy here. This article was originally published on 6 November 2020 and updated to reflect the interest rate changes.
One of the first things we should do after we start working is to get a high-interest savings account. A high-interest savings account not only allows us to start building up our savings, but also gives us the incentive to do so.
Unfortunately, many high-interest savings accounts require us to fulfill specific conditions – such as needing to credit your monthly salary of at least $2,000 (via GIRO) or having to hit a minimum credit card spend each month.
While that should be simple for most working adults, it also means that there are groups of people – such as tertiary students, NSFs and retirees – who are not able to earn bonus interests from these high-interest savings accounts even if they have significant savings.
One example is the popular DBS Multiplier Account, which enables you to earn attractive bonus interests on your savings if you are able to hit a total transaction value of $2,000, based on at least two of the categories below (for which Income needs to be one of the categories).
This is easy if you are already earning a take-home salary of more than $2,000 each month. But even if your take-home salary is below $2,000 each month, you still earn the bonus interests by accumulating sufficient transaction volume in the other categories, since the Multiplier account considers your total transaction volume across all categories, not just Income.
If you are earning a take-home salary of $1,900, you can invest $100 via DBS each month to unlock bonus interest.
While this is good for lower-wage workers who are earning a take-home salary of slightly below $2,000, it’s not feasible for the likes of National Serviceman (NSF), tertiary students and retirees because these individuals earn a much lower income each month, if any at all.
For example, an NSF holding the rank of a Recruit/Private will only earn $580 each month. This means he still needs to hit an additional transaction value of $1,420 from the other categories to achieve the minimum $2,000 required to earn bonus interest. This won’t be realistic for most NSFs as they will not have a home instalment, do not qualify for a credit card, and are unlikely to be able to invest or pay for insurance policies to the tune of $1,420 a month.
To address the issue for these groups of people, DBS has introduced two new options for account holders to earn bonus interests from its Multiplier account.
#1 Income and PayLah! Retail Spend
The first way is through crediting our income (salary credit and/or dividends) and transacting with PayLah! for retail spend. If we are able to achieve a minimum total transaction volume of $500, we can earn a bonus interest of 0.4% p.a. This is applicable on the first $10,000.
For example, an NSF with the rank of Recruit/Private will earn $580 each month. If he credits the salary to his Multiplier account, this is already higher than the $500 total transaction volume required each month. This means the NSF account holder only needs to make one PayLah! Retail Spend (any amount) each month to qualify for the 0.4% p.a. interest.
Tertiary students who have part-time jobs can also easily benefit from this alternate method of earning bonus interest. For example, if their part-time salary is $450 a month, they only need to make PayLah! Retail Spend of $50 each month to hit the $500 total transaction volume to be eligible for the 0.4% p.a. bonus interest.
Let’s be clear, we know that 0.4% p.a. isn’t a lot, especially compared to what most working adults will be enjoying on their Multiplier account if they earn bonus interest in the usual way.
At the same time, we need to remember that earning this interest is entirely fuss-free. NSFs already have to credit their monthly salary into a savings account anyway – so it’s just a matter of choosing which bank account to use. And making one PayLah! Retail Spend payment each month is easily doable – unless you are somehow opposed to using your smartphone to make cashless payments conveniently.
Besides NSFs and tertiary students who work part-time, retirees will also appreciate this alternate way of earning bonus interests.
Even if they are not currently working, dividends from their investments (credited via GIRO from CDP and/or from DBS Multi-Currency Settlement Account) will also be considered as a form of income. This means that retirees who get consistent dividends can also enjoy this form of bonus interest as long as the total transaction volume from their income and PayLah! retail spend is more than $500 for the month.
#2 PayLah Retail Spend (29 years old and below only)
The second way is for those who do not have any form of income – such as tertiary students who are not working.
For these individuals, they can continue to earn bonus interests of 0.3% p.a. on your Multiplier account just by making one PayLah! Retail Spend each month (any amount).
Yes, that’s all.
The DBS Multiplier 4.0 Works Hard For You, Even Before You Start Working
Previously, the DBS Multiplier Account was already one of the most popular high-interest savings accounts in Singapore. Back then, however, it only makes sense to open a DBS Multiplier Account after you start working.
Now that you can earn bonus interest of 0.4% p.a. even with a low income or bonus interest of 0.3% p.a. with no income, you no longer need to be working before you apply for the DBS Multiplier account.
The bonus interest is payable for the first $10,000. At an interest rate of 0.4% p.a., this means you can earn $40 a year in interest. While it’s nothing to shout about, it’s still much higher compared to the $5 (0.05% p.a.) you will earn if you leave it in a regular account.
Best of all, when you finally get a full-time job, you can continue to use your DBS Multiplier Account to enjoy even higher interests without the hassle of having to transfer the money to another savings account.
The current version of the DBS Multiplier Account can also work hard for you during retirement. As long as you are able to credit a dividend income (via GIRO from CDP and/or from DBS Multi-Currency Settlement Account) and make a retail spend through PayLah! with a total transaction volume of $500 or more, you will enjoy the bonus interest of 0.4% on the first $10,000 on your savings.
With these two new ways of earning bonus interests, NSFs, tertiary students and retirees no longer have an excuse that they are unable earn bonus interests on their savings. If you are part of these groups and still earning a paltry 0.05% p.a. on your savings, you should consider signing up for a DBS Multiplier Account today.
Furthermore, as a Multiplier Account user, you can enjoy the range of lifestyle services and rewards provided by DBS, as well as unlock detailed insights into your spending and saving habits courtesy of DBS NAV Planner.
Here’s an infographic summarising all the benefits of the DBS Multiplier for you: