What’s Next after Saving?

It is widely known that banks in Singapore give very meagre interest rates for fixed deposit and savings accounts. Especially for fixed deposit accounts, most of them require a minimum placement with considerable tenures ranging from 12 months to 36 months or more. That means that if you ever withdraw any amount before the maturity period in the event of emergency, you will lose the privilege to accrue the bonus interest. 

Instead of dumping my spare cash in fixed deposits (I used to put my money in POSB savings account), there are many other better savings accounts available in the market to help increase your savings.

In my second post, I will share what I’ve done to accrue more interest without being tied down by the fixed deposit tenures. 

Pardon if my post might be a bit outdated since many financial bloggers would have already shared about the various savings accounts. For the benefit of my readers who are not aware of OCBC 360 account, this post is for you J

I applied for the OCBC 360 account to take advantage of the higher interest rates. If you’re keen to find out more, do check out this website: https://www.ocbc.com/personal-banking/accounts/360-account.html.

OVERVIEW OF OCBC 360 ACCOUNT

When I signed up in May 2014, the package was more attractive as I managed to accrue at least 3.05% interest per year. It lasted for about a year before it was revamped. My hunch is probably due to the overwhelming popularity so there wasn’t much impetus for them to offer such good benefits. Nonetheless, the make-over still rank them as one of the best in the market presently with a couple of enhanced features.

Based on the table above, I stand to gain 1.2% as along as my employer diligently credits the monthly salary into the account. With a base interest of 0.05% per year on my entire account balance, I would have pocketed at least 1.25%. This interest rate already triumphs many other fixed deposits.

It was easy for me to fulfil the second criteria to pay any 3 bills with the account. That’s another 0.5%. Together with the first criteria, I have earned at least 1.75% interest per year.

The credit card which I signed up was OCBC Frank Card together with the opening of OCBC 360. Most of the time, I managed to clock just above $500.

As I am already sufficiently insured, I did not purchase any OCBC financial products.

The last criterion is based on any incremental account balances from the previous month’s balance. Since I am gainfully employed, I’d received monthly salary which progressively increases my account balance. In addition, this bonus interest will be paid on incremental account balance of up to S$1,000,000!

With the first three and last criteria met, I would have reaped more than 2.25% interest per year effectively!

You can use the interest calculator available on the website to calculate the potential interest you can get. If you have a balance of $60,000 for a period of 12 months (less the purchase of financial products), you can potentially earn an indicative amount of $1,375.56 for a year! This is as good as investing in the stock market so long as you satisfy the criterions adequately.

And if you purchase any eligible OCBC financial product, you can earn an indicative amount of $1,986.96 a year!

If you are building up/already have up to $60,000, you can consider applying for OCBC 360. It surely beats any fixed deposits out in the market!

UPSIDE

1. As cashflow is important to me, I like the fact that I can move my money as and when I want without fretting that I might lose out on the bonus interest of a fixed deposit as long as I don’t withdraw a huge sum.
2. Good for those earning more than $2,000 per month and need to pay off at least 3 bills. I presume most of the working adults can easily satisfy these two.
3. The Frank credit card served me well as they offer an attractive rebate of up to 6% for online purchases. This largely benefitted me for my travel expenses, movie tickets, and occasional purchases via online platforms such as Groupon. If you are keen to find out more about Frank credit card, you may visit the website at http://www.frankbyocbc.com/products/cards/credit-card/ (do take note of the fine prints!)
4. My account balance grows faster based on an effective interest rate of 2.25%.
5. I can withdraw money freely without worrying that I might lose out on the bonus interest, albeit I will accrue lesser interest if the account balance is lower at the end of the month.
6. The interest is paid on a monthly basis. Better than the typical quarterly or half-yearly dividends you receive in stock market!

DOWNSIDE

1. The bonus interest is only valid for the first $60,000 of the account balance.
2. I need to spend at least $500 monthly to be eligible for the 0.5% bonus interest. There are instances where I did not meet this criterion simply because it is not practical to spend money intentionally just to accrue the 0.5% interest. On the months which I do less of the transactions, I just earn less bonus interest. 

To me, it is pretty clear that the upside outweighs the downside. Due to the popularity of OCBC 360, I reckon it caught the attention of other banks that subsequently rolled out relatively similar products such as the following:

• UOB One Account (get up to 3.33% interest per year - http://www.uob.com.sg/personal/deposits/chequeing/one_account.html)
• Standard Chartered Bonus $aver Account (get up to 3.38% interest per year - https://www.sc.com/sg/save/current-bonussaver.html)
• DBS Multiplier Programme (get up to 2.68% interest per year - http://www.dbs.com.sg/personal/landing/dbs-multiplier/index.html)

If you’re a disciplined saver and your stash of cash is still roosting in a fixed deposit nest hoping it can lay more ‘golden eggs’, think again. 

It’s time for you to take advantage by leveraging on any of the above savings accounts.

With all being said, it is pertinent that you always do your own due diligence to assess your own financial needs. Once you make the first move, you will surely be rewarded at the end of the day! Feel free to share if you have other recommendations.

As always, it can be easy to huat!

Good luck! :D

Cheers,

EzHuat

[UPDATE: Please refer to blog post http://triplehuat.blogspot.sg/2017/03/will-you-continue-to-be-loyal-to.html for revision to OCBC 360 Account w.e.f. 1 April 2017]