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Having sufficient savings is the cornerstone of a secure financial future. Without savings, you will not have enough money to tide you over unexpected events like job loss or health emergencies. It will also be difficult to invest and grow your wealth to achieve your different life goals, whether they are as small as buying a luxury handbag or as large as placing a down payment on a new house.
While it’s simple to say you need to save more regularly, it is also hard to execute, especially as other life plans could get in the way. For example, you may intend to set aside a fixed 20% to 30% of your monthly salary as savings each month. But due to either exigencies or giving in to unplanned luxury spending like a BTS concert ticket or fan merchandise, you may fall short of your savings target.
That’s where having a forced savings plan could be beneficial to instill discipline in saving a fixed amount of money periodically. It forces you to create a budget and ensures that you pay yourself first by prioritising savings over spending on other debts. Doing so would also make you more conscious of the expenses that you can eventually cut back on.
Whether you have trouble saving for the short-term or want to have greater flexibility over your funds in the long-term, you can use the OCBC 360 Account as your forced savings plan. You do not need to pay any charges or fees like on a typical endowment policy, and you retain full flexibility over the use of the funds whenever you need them. This makes it a savings account that can benefit all people, for all needs.
How The OCBC 360 Account Works
Anyone above 18 years old can apply for the OCBC 360 Account, which is a high-yield savings account that allows you to earn bonus interest of up to 7.65% per annum (p.a.) on the first $100,000 account balance if you meet the requirements in each of the different pillars.
You can stack your bonus interest independently of the five pillars—Salary, Save, Spend, Insure, and Invest – with more interest earned as you fulfill more pillars. This means you do not need to take additional effort to fulfil any one category if that isn’t part of your usual spending habits just to beat the base interest rate of 0.05% p.a. on your entire account balance.
This benefits non-salaried employees like freelancers or gig platform workers, whose income may not be recognised as a salary credit through GIRO to earn the qualifying interest under the Salary pillar. But it is still possible to earn a high interest rate of at least 1.85% p.a. by simply saving $500 and spending another $500 using the selected OCBC credit cards each month under the Save and Spend pillars, respectively.
Based on the above scenario, a non-salaried person using the 360 Account with $50,000 in savings would earn $942.48 in interest a year compared to a standard savings account, which would earn only $25.44.
This makes it possible for anyone to benefit from the 360 Account simply by taking advantage of what they are already doing.
Here’s a breakdown of the effective interest rates (EIR) that you can achieve on your first $100,000 based on the 5 different pillars.
Source: OCBC Bank
Create Your Own Forced Savings Plan With OCBC 360 Account And Earn An Effective Interest Rate Of Up To 4.05% Per Annum
The recent OCBC Financial Wellness Index 2022 report found that Singaporeans aged between 21 and 65 save 30% of their monthly income on average. This shows that many in Singapore already prioritise savings. The next step would then be to have a good mechanism to put your savings into – one that incentivizes you to continue saving and also generates a decent return to grow your savings for you to reach your savings milestones quickly.
With the 360 Account, you have both aspects covered.
First, the 360 Account allows anyone who credits a minimum salary of $1,800 to easily fulfil the Salary category and earn more than the base interest rate, or up to 2.55% p.a. on a $100,000 savings, which would amount to $2,598.72.
Second, saving at least $500 every month would qualify you for additional interest under the Save category. If you meet these two criteria (Salary + Save), you will earn an effective interest rate (EIR) of 3.25% p.a. on the first $75,000 of your account balance or 4.05% p.a. on the first $100,000, for a total of $4,127.40.
Taking the example of a fresh graduate who draws a monthly salary of $3,650 and has $10,000 in a regular savings account, she would normally receive an annual interest rate of 0.05%, or $5.04. By switching to the OCBC 360 Account, the interest return rises to $208.80 a year, or 2.05% bonus interest.
Here’s a quick glance at the difference in interest returns that the graduate could get by switching to a 360 Account and fulfilling the different categories versus sticking to a standard savings account.
Assuming the same graduate now also saves $500 a month, or around 20% of the take-home pay, her interest rate will stack up to 3.25% p.a. or $331.08 a year. By only fulfilling these two criteria, she would earn $326.04 more in interest a year by switching to the 360 Account. The extra savings, which she earned without additional effort or spending, will compound her savings and help her reach her life goals faster.
On the other hand, if she is not disciplined enough to save at least $500 a month, she will lose about $10 in interest a month, which easily covers a hawker meal with the $10,000 savings.
For someone who is working towards achieving a life goal, this is money that can be earned “risk-free,” while the returns can be comparatively as high, if not higher, than on other investment types.
Grow Your Savings With OCBC 360 Account
In today’s high-inflation world, putting your money in a low-interest savings account would not only erode the value of your savings sooner, but it would also be insufficient to grow your wealth in a meaningful way.
You need a supercharged savings account like the OCBC 360 Account that rewards you for saving regularly, gives attractive interest rates of up to 7.65% p.a. on the first $100,000, and keeps it simple for anyone to beat the base interest rate.
Check out the interest calculator on the 360 Account to find out how much interest you can earn on your savings today.
CNY Exclusive Interest Rate
Enjoy more prosperity with OCBC! From now till 28 February 2023, get an extra 2.00% p.a. on your first S$100,000 when you open a new 360 Account and sign up for an OCBC 365 Credit Card.
Promotion Terms & Conditions apply. Fees and charges apply.
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