This article is written in collaboration with Standard Chartered Bank (Singapore) Limited. All views expressed in the article are the independent opinions of DollarsAndSense.sg
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 3.88% per annum (p.a.) on the first S$100,000 kept in the account.
To earn this, account holders need to meet a few simple criteria.
* The 1.88% interest rate shown on card spend from the screenshot above includes the prevailing interest rate. The prevailing interest rate for your entire deposit balances less than S$200,000 is 0.1% p.a. and 0.2% p.a. for entire deposit balances more than S$200,000.
# 1 Card Spend (up to 1.88% – inclusive of prevailing interest)
You will earn bonus interest on the first S$100,000 of your deposit balance if you meet the minimum card spend.
If you have S$100,000 and charge a minimum of S$500 each month on your Bonus$saver card on qualifying retail transactions, you can earn a bonus interest of up to 0.78% p.a. This increases up to 1.78% p.a. if you charge a minimum spend of S$2,000 each month.
# 2 Salary Credit (1%)
By crediting a monthly take home salary of S$3,000 into your Bonus$aver account, you will earn a bonus interest rate of 1% p.a.
# 3 Invest Or Insure (0.75%)
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 0.75% p.a.
# 4 Bill Payment (0.25%)
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 0.25% p.a.
Total Interest Rate
In total, you can earn Card Spend inclusive of prevailing interest rate (up to 1.88%) + Salary Credit (1.00%) + Invest Or Insure (0.75%) + Bill Payment (0.25%) = 3.88% from the Bonus$aver account.
Do note that the bonus interest above applies to your first S$100,000 deposit balances. For any deposit amount above $200,000, you will earn an interest rate of 0.2% p.a. for your entire deposit balance.
How Much Does This Equate to Each Month?
How much you can earn from the Bonus$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.
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$36.18 each month (effective interest rate, 2.13%, based on a 31-day 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.
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. Earning more and taking 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 currently has S$100,000 in savings.
In this second scenario, Ben is able to earn an interest of approximately S$329.53 per month (based on a 31-day month). This equates to S$3,888 in a year. The interest rate of 3.88% p.a. 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$50 respectively each year. That’s a big difference.
|Savings Balance||* Annual Interest, Regular Savings Accounts||Annual Interest, Bonus$aver Account||Difference|
*Based on interest rate of 0.05% per annum
Maximise The Interest Earned On Your Savings
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 3.88%, the Standard Chartered Bonus$aver Account helps you do just that, ensuring that you have access to liquid cash on demand, while still enabling you to earn a good interest rate each month if you meet the relevant criteria.
If you wish to find out how much interest you can earn from the Standard Chartered Bonus$aver Account, you can try out the widget calculator that is on their site.
Deposit Insurance Scheme: Singapore dollar deposits of non-bank depositors are insured by the Singapore Deposit Insurance Corporation, for up to S$50,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.