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Singaporeans are big savers. According to the Department of Statistics, Singaporeans registered a 31.4% personal savings rate in the third quarter of 2022. However, in today’s high inflationary environment, where core inflation averaged 4.1% in 2022, it emphasises the importance of going beyond saving.
You need to continually optimise the returns on your savings based on financial planning to achieve your life goals and needs. One way you can make your idle cash work harder is with an account that rewards you for more than just saving but also for meeting your financial needs. If this sounds relevant to you, the DBS Multiplier Account might be what you’ve been looking for.
Read Also: How Much Money You Should Have In Savings (And/Or Investments) According To Your Age In Singapore
How Does The DBS Multiplier Account Work?
The DBS Multiplier Account is a personal deposit account that rewards you with bonus interest as you spend on the different DBS/POSB product categories, such as Credit Card, Home Loan Instalment, Insurance, and Investments. As there is no minimum amount required to spend across these categories to unlock the bonus interest rates, it is easier and more accessible for anyone to gain returns and start growing their savings.
To earn the higher interest on your DBS Multiplier Account, you simply need to credit your salary to any DBS/POSB Deposit Account via GIRO with the transaction code ‘SAL’ or ‘PAY’. For groups of individuals who are not yet working or not drawing a salary, such as students or retirees, you can credit your dividends from your investments to your DBS/POSB account or simply connect SGFinDex to DBS NAV Planner as an alternative.
Latest Changes From 1 November 2022: Higher Interest Rates On A Larger Savings Amount In Your DBS Multiplier Account
From 1 November 2022, you can earn up to 4.10% p.a. on up to S$100,000 of your total monthly balance in your DBS Multiplier Account.
We crunch the numbers on three common Singapore saver profiles to see how this translates into higher returns on meeting your financial needs.
DBS Multiplier Allows You To Earn Higher Interest On Up To S$100,000 Without Requiring A Minimum Spend
Profile A: Young Working Adult Who Recently Entered The Workforce
Whether you’ve just started your career or already have a few years of working experience, the DBS Multiplier Account can increase the returns on your savings up to S$100,000.
For example, assuming you’re a young working adult aged between 25 and 29 in Singapore earning the median gross monthly salary of S$3,500 (or S$2,800 take-home pay) based on the 2021 Labour Force Report and you’re able to save about 30% of your salary for around three years, it could easily add up to about S$30,000.
Based on this savings pot of S$30,000, you will typically earn 0.05% p.a., or S$14.60 per year. However, if you just fulfil one category spend (of any amount), you could easily achieve 1.50% p.a., or S$448.95, on your savings. This is not difficult to achieve, as you will probably need to spend on transportation, food, clothing, and entertainment each month. This could easily amount to at least S$200 or more each month. By charging your expenses to any DBS/POSB credit card, you can easily qualify for the Credit Card category and beat the interest on a standard savings account.
|Savings Amount of S$30,000|
|Type of Savings Account||Interest Rate||Interest Returns|
|Standard Savings Account||0.05% p.a.||S$14.60|
|Multiplier Account (Salary+ One Category Spend)||1.50% p.a||S$448.95|
Unlock Higher Interests Of Up To 4.10% P.A. By Qualifying For More Categories Or Combine With Your Spouse
Profile B: Affluent Singles Or Married Couples
The DBS Multiplier Account is also beneficial for affluent singles or married couples. For simplicity sake, let’s assume a couple earns 2x that of a young working adult, i.e., S$7,000 (S$3,500 x 2), or a combined take-home pay of S$5,600 (after deducting employee CPF contributions) and have a combined savings of S$100,000 each in their own multiplier accounts.
Based on this scenario, if the couple sticks to a standard savings account, they would only earn a measly 0.05% p.a. on their S$100,000 of savings, which will give them just S$51.10 per year. This amount is hardly enough to beat inflation, let alone grow one’s savings over time. One way this couple could beat the savings rate on a standard account is to combine a joint DBS/POSB savings account with an individual DBS Multiplier Account.
By combining their salaries and dividends into the joint savings account, the couple will benefit by hitting a higher transaction tier. This will be recognised under the respective individual DBS Multiplier Accounts – which could earn the higher bonus interest rate on up to S$100,000 of savings each. By simply crediting both their salaries into the joint account, their total eligible transactions per month would be raised to S$5,600 instead of S$2,800. This qualifies them to earn between 1.80% and 2.40% p.a. depending on the number of categories that they spend on. In dollar terms, this sums up to S$2,401.70 per year on each of their Multiplier Account.
As a married couple, there would be more expenses and needs that could tie in with the different DBS product categories. These could be any of DBS’s attractive home loan packages, DBS/POSB credit cards, investment plans, or insurance policies. By consolidating their various spending needs around the DBS/POSB products, it would not only be easier to hit a higher total monthly eligible spend but also qualify for more category spends, which would earn them a higher bonus interest rate.
Here’s an infographic showing a short summary of the benefits of the DBS Multiplier for you:
Benefit With DBS Multiplier, Even If You Do Not Have Regular Salary Payments
Profile C: Part-time Students or Freelancers Who Do Not Have Regular Salary Payments
You can benefit from the DBS Multiplier Account even if you do not credit any salary. This is why everyone can use the DBS Multiplier Account to earn more interest and grow their savings.
In place of a monthly salary, you could also credit your dividends or connect to the SGFinDex and spend at least S$500 using DBS PayLah! on retail expenditures. Just by doing this, you could earn up to 0.55% p.a., or S$54.75 per year, on your first S$10,000 of savings. Again, this is significantly better than the S$3.65 you would get if you continued earning 0.05% p.a. on a standard savings account.
For those under 29 years old without a monthly salary/dividend or unable to connect to the SGFinDex, you can still earn up to 0.40% p.a. on your first S$10,000 by spending any amount using PayLah! on retail spend. In dollar terms, assuming you spend S$100 each month, would earn up to S$40.15.
Earn More By Doing The Same With DBS Multiplier Account
The DBS Multiplier Account differentiates itself by lowering the barriers to earning the bonus interest rates. This is a big plus, as it means you don’t have to spend more on any one category than you need to.
You also have different options in terms of the product categories that allows you to meet your financial needs to unlock bonus interest. Simply, choose those that are applicable to your needs and lifestyle, and do not be forced to spend just to achieve higher returns. For example, someone who has just joined the workforce may find it useful to have a credit card to make their daily essential purchases. Whereas, a married couple may use more DBS products and services, like their home loans, insurance, and investment products, which would naturally unlock even higher bonus interest rates for them.
Moreover, not having a regular income also shouldn’t stop you from cultivating a good habit of planning your finances to grow your savings. The DBS Multiplier Account is suitable even for tertiary students working part-time, NSFs, or freelancers who want to optimise returns on their savings. By making your purchases through PayLah!, you can easily beat the low 0.05% p.a. interest rate, like everybody else should!
Readers who are keen to learn more about the DBS Multiplier can also join The Burrow by DBS Facebook group to discuss and engage with the community for more insights and money management tips.