This article was originally written on 26 March 2020 in collaboration with Standard Chartered Bank (Singapore) Limited. All views expressed in the article are the independent opinions of DollarsAndSense.sg. We have updated the article on 1 October 2020 to take into account the revised interest rates.
Building up savings is an important financial objective for many working adults.
Whether we are saving for an end-of-year holiday, our wedding, home renovation or simply setting aside money for rainy days, most would agree that having sufficient savings is important for us to live more confidently.
At the same time, most of us have a number of banking needs that we have to perform. These include the use of a credit card for cashless transactions, crediting our salary and paying our bills online. To simultaneously enjoy convenience and maximise our returns, it makes sense to have one deposit account where we can consolidate all our banking needs.
The question then arises: how do we make the best use of our deposits?
Standard Chartered Bonus$aver: A Deposit Account That Gives You Good Interest Rates
One of the easiest things you can do is to simply use a deposit account that earns you a good interest rate.
In Singapore, one such account that you can take advantage of is the Standard Chartered Bonus$aver Account. The Bonus$aver account allows you to earn an interest rate of up to 2.88% per annum (p.a.) on the first S$80,000 kept in the account.
To earn this, account holders need to meet a few simple criteria.
Source: Bonus$aver Account, Standard Chartered
# 1 Card Spend (up to 0.78% including prevailing interest rate of 0.03%)
You will earn bonus interest on the first S$80,000 of your deposit balance if you meet the minimum card spend.
If you have S$80,000 and charge a minimum of S$500 in any calendar month on qualifying retail transactions to your Bonus$saver card linked to a Bonus$aver account, you can earn a bonus interest of 0.25% p.a. This increases up to 0.75% p.a. if you charge a minimum spend of S$2,000 each month.
# 2 Salary Credit (0.2%)
By crediting a monthly take home salary of S$3,000 into your Bonus$aver account, you will earn a bonus interest rate of 0.2% p.a.
# 3 Invest & Insure (0.9% each, total of 1.8%)
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 0.9% p.a. each. This means you can potentially earn up to 1.8% if you invest and insure with Standard Chartered.
# 4 Bill Payment (0.1%)
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 0.1% p.a.
In total, you can earn Card Spend (up to 0.75%) + Salary Credit (0.2%) + Invest (0.9%) + Insure (0.9%) + Bill Payment (0.1%) + Prevailing Interest Rate (2.88%) = 2.88% p.a. from the Bonus$aver account.
Do note that the bonus interest above applies to your first S$80,000 deposit balances.
How Much Does This Equate to Each Month?
How much you can earn from the Bonus$aver account each month will primarily depend on two factors – 1) the savings that you currently have in the Bonus$aver account and 2) the number and type of criteria you meet each month.
To give a better sense of how much you stand to earn each month, here are two scenarios.
Basic Scenario:
In the first scenario, we assume Adam, our friend who just started working, receives a take home salary of S$3,000. He spends S$500 on his Bonus$saver Card monthly, and also completes three bill payments each month. He currently has S$20,000 in savings.
Based on the widget calculator found on the Standard Chartered website, we can see that Adam will earn an interest of approximately S$116 per annum or about $9.67 per month. This is a decent return, especially when you consider that all Adam does is essentially what most working adults would already be doing anyway.
Advanced Scenario:
In the second scenario, we assume Ben, a friend who’s older and has been working longer, receives a take home salary of S$5,000. As he earns more and also has to spend more to take care of his family, Ben also spends more on his credit card which comes up to about S$2,000 each month. He also has many financial commitments, and easily completes three bill payments each month. He recently invested S$30,000 into unit trusts through the Standard Chartered online platform. He also buys insurance policies worth up to $12,000 p.a. through Standard Chartered. He currently has S$80,000 in savings.
In this second scenario, Ben is able to earn an interest of approximately S$2,304 per annum or about $192 per month. The effective interest rate of 2.88% p.a. that he enjoys may even be higher than the returns given by some bonds and even stocks!
In contrast, if Adam and Ben were to leave their savings in a regular savings account that pays them 0.05%, they will only earn an interest of S$10 and S$40 respectively each year. That’s a big difference.
| Savings Balance | * Annual Interest From Regular Savings Account | Annual Interest From Bonus$aver | Difference | |
| Adam | S$20,000 | S$10 | S$116 | S$106 |
| Ben | S$80,000 | S$40 | S$2,304 | S$2,264 |
*Based on an interest rate of 0.05% per annum
Maximise The Interest Earned On Your Savings Through The Bonus$aver Account
We are not saying that you should stop investing and turn your focus purely to keeping your money in a high-interest rate deposit account.
Rather, what we are saying is that while you’re investing part of your money, you should not neglect your liquid savings. You should also try to maximise the interest rates earned for this money to limit its erosion from inflation.
By giving an interest rate of up to 2.88%, the Standard Chartered Bonus$aver Account helps you do just that, ensuring that you have access to liquid cash on demand, while still enabling you to earn a good interest rate each month if you meet the relevant criteria.
You can apply for the account here and get some attractive perks.
Deposit Insurance Scheme: Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.
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