This article was written in collaboration with OCBC. All views expressed in the article are the independent opinion of DollarsAndSense.sg
After entering the working world, one of the first financial decisions you should make is to choose and open a high-interest savings account, and start using it regularly to maximise the interest you can earn from using your savings account.
High-interest savings accounts are particularly relevant for working adults because they pay account holders bonus interest for fulfilling a simple set of criteria each month. These criteria include crediting your monthly salary to the account, achieving a minimum monthly spend on your credit card, and saving more each month.
One of the most popular savings account in Singapore is the OCBC 360 Account. This account is popular not only because it has been around for a while, but also because it’s convenient to use.
How Does The OCBC 360 Account Work?
Let’s start off by understanding how the OCBC 360 Account works.
The OCBC 360 Account allows account holders to earn bonus interest in six areas: Salary, Spend, Step-Up, Wealth, Grow and Boost.
Source: OCBC 360
One thing that we like about the OCBC 360 Account is that bonus interest in each area can be earned independently. This means you do not need to complete any particular area in order to be eligible for the bonus interests in other areas. You can just complete any of the six areas, depending on your preference.
Salary: Credit your monthly salary of at least $2,000. For this, you earn bonus interest of 1.2% p.a. on the first $35,000 of your account balance. You’ll earn 1.5% p.a. on your next $35,000 (i.e. between $35,000 and $70,000). If you have $70,000 in your account, your effective interest rate earned from this criteria will be 1.35% p.a.
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: Spend at least $500 each month in total across your personal OCBC Credit Card(s). For this, you earn additional interest of 0.3% p.a. on your first $35,000 and 0.6% p.a. on your next $35,000. If you have $70,000 in your account, your effective interest rate earned from this criteria will be 0.45% p.a.
Step-Up: Increase your account’s average daily balance in the current month by at least $500 compared to the previous month’s average. For this, you earn an interest of 0.3% p.a. on your first $35,000 and 0.6% p.a. on your next $35,000.
Wealth: Purchase any new eligible financial product from OCBC. For this, you earn an interest of 0.6% p.a. on your first $35,000 and 1.2% p.a. on your next $35,000 for a period of 12 months.
Grow: Maintain at least $200,000 of average daily balance in your account and earn 1.0% p.a. on your first $70,000.
Boost: You will earn an extra 1.0% p.a. on the increase in your account’s average daily balance from the previous month’s balance, capped at $1,000,000.
As you can see above, the OCBC 360 Account gives different amounts of bonus interest on your first $35,000 as compared to your next $35,000. The next $35,000 in your account (i.e. $35,001 to $70,000) earns a higher interest rate compared to your first $35,000.
We have included both the interest rate for your first $35,000 and the next $35,000, as well as the highest possible effective interest rate (EIR) that you can earn, which applies if you have $70,000 in your account.
|First $35,000 (p.a.)||Next $35,000 (p.a.)|
Promotional rate of 2.0% from December 2018 to March 2019 (EIR: 1.60%)
|Spend||0.3%||0.6% (EIR: 0.45%)|
|Step-Up||0.3%||0.6% (EIR: 0.45%)|
|Wealth||0.6%||1.2% (EIR: 0.90%)|
(inclusive of 0.05% base interest)
3.45% (with Promotional rate)
Additionally, you can earn 1.0% p.a. (through the Boost Criteria) on the increase in your account’s average daily balance from the previous month. You can also earn an additional 1.0% (through the Grow criteria) on the first $70,000 if your account balance is at least $200,000.
How Much (More) Can You Earn Compared To A Basic Savings Account?
If you have $35,000 in your OCBC 360 Account and fulfil the Salary, Spend, Step-Up and Boost criteria, you will earn an interest of $55.39 each month.
Source: OCBC 360
You can use this nifty calculator on OCBC’s website to calculate how much interest you can earn each month.
In comparison, if you leave your money in a regular savings account (at 0.05% p.a.), you will only receive $1.46 of interest each month – a difference of about $54 each month! This difference becomes even higher once your savings grow.
Editor’s Note: We did not include the bonus interest you can earn from Wealth. This is because the decision to buy an eligible financial product (like insurance or unit trusts) should not be based solely on your desire to earn higher interest, but on whether these products meet your needs.
Who Would Find The OCBC 360 Account Useful?
In the competitive banking world that we live in today, there are also other high-interest savings account that you can also consider. So what gives the OCBC 360 Account its advantages?
# 1 Convenience
With a large network of ATMs and typically shorter queues(remember, you can use UOB ATMs as well!), the OCBC 360 Account is an ideal choice for many working adults in Singapore to credit their monthly salary to. The bonus interest that it gives (a minimum of 1.2%) is one of the highest that you can earn, just by crediting your salary.
We also like the fact that account holders can decide which of the bonus interest criteria they wish to fulfil. Each criteria can be fulfilled independently.
For example, even if you don’t credit your monthly salary via GIRO to your OCBC 360 Account but can easily attain the minimum credit card spend, increase your account balance each month, and have bought an eligible OCBC wealth product, you can still earn bonus interests in these other areas.
# 2 Choice Of Credit Cards You Can Use
One of the things we love about the OCBC 360 Account is that bonus interest for your credit card spend can be accumulated using any OCBC credit cards.
This is great because each of us have our own spending habits, and may prefer to receive different perks from our credit cards. The OCBC 360 Account allows you to use any OCBC credit cards to accumulate the minimum credit card spend of $500 to earn the bonus interest.
So if you are a miles lover, you can use a miles card. If you prefer cashback, you can use a cashback card to accumulate your minimum spend.
# 3 Rewards You For Building Up Your Savings
The OCBC 360 Account allows you to earn bonus interest if you increase the monthly average daily balance of your account by $500, compared to the previous month.
If you are looking to build up your savings (which is what you should be doing when you first start working), the OCBC 360 Account rewards you for doing so.
According to OCBC, about 70% of their existing OCBC 360 Account users are saving and increasing their account balance by $500 or more each month. So it seems like the majority of account holders would benefit from this new Step-Up bonus.
# 4 Those Who Have Bought Wealth Products From OCBC
If you have bought a wealth product from OCBC, there will be a natural advantage to use the OCBC 360 Account, since you will automatically earn bonus interest from Wealth.
The OCBC 360 Account: A Useful Tool For Young Working Adults
To sum it up, receiving your monthly salary through GIRO, paying for daily expenses and monthly bills through your credit cards and saving more each month are things that most working adults will already be doing each month once they start work.
The idea here is that by consolidating all these activities on a OCBC 360 Account, you can earn higher interest on your savings.
Limited Time Offer:
This promotion is valid from now till 31 December 2018. More details of this promotion can be found here.
From 1 December 2018 to 31 March 2019, earn a promotional rate of up to 2.0% per year when you credit your salary of at least S$2,000. Only salary credit through GIRO with the transaction description “GIRO – SALARY” in your statements will qualify for this bonus. To set up your OCBC 360 Account as your salary crediting account, please inform your HR department of your new account number. You will only need to do it once.