Will you continue to be loyal to the revised OCBC 360 Account?

When I was in the midst of work today, I received an SMS from OCBC informing that there will be changes to the OCBC 360 Account effective on 1 April 2017. I took a quick glance and was kind of disappointed with the so-called 'enhancements'.

In one of my posts, I blogged about the OCBC360 on What’s Next After Savings? This was the account which helped to kickstart my investment journey. With the upcoming revised changes to the interest rates, is it still worthy to put your funds in this account? Let’s delve deeper.

With effect from 1 April 2017, OCBC will be making five changes to the OCBC 360 Account.

Table 1: Comparison on upcoming change to OCBC 360 Account w.e.f. 1 April 2017
	Current	New
Balance cap to earn bonus interest under OCBC 360 Account	$60,000	$70,000
Salary bonus - Credit a minimum monthly salary of S$2,000 through GIRO	1.2%	No change
Payment bonus - Pay at least 3 unique bills with your OCBC 360 Account	0.5%	0.3% (To qualify, pay at least 3 bills totalling at least S$150)
Spend bonus - Spend a minimum of S$500 across your OCBC Credit Card(s)	0.5%	0.3%
Save bonus	Earn 1% per year on your incremental balance	Earn 1% per year on the first S$70,000 if account balance is ≥S$200,000
Wealth bonus	1%	Up to 1.2%
Base interest	0.05%	0.05%

With the above changes, how will it impact my current funds sitting in the account?

In my situation, all the changes will impact me except Weath Bonus as it is not applicable to me because I did not purchase their insurance product.

Let’s do a comparison assuming I have S$70,000 sitting in OCBC 360 Account under the revised scheme and fulfilled the salary, payment, spend and save bonuses.

Table 2: Comparison of Interest Earned
	NEW	CURRENT
	Interest Earned p.a. for $70,000	Interest Earned p.a. for $60,000
1.2% Salary Bonus	$840	$720
0.5% Payment Bonus		$300
0.3% Payment Bonus (revised)	$210
0.5% Spend Bonus		$300
0.3% Spend Bonus (revised)	$210
1% Save Bonus (revised)	N.A.	Assuming there is no increment
0.05% Base Interest	$35	$30
TOTAL (indicative)	$1,295	$1,350

In the table above, it is clear that I will earn $55 less under the revised changes. Moreover, I would have earned more interest under the existing Save Bonus if there are any incremental balances from the previous month’s balance contributed by my monthly salary which I did not reflect in the table.

For the Payment Bonus, you need to ensure your 3 bills total up to at least $150. There is no cap currently. However, I believe this should be easily achieved for most working adults.

If I continue to keep my funds in the revised OCBC 360 Account in Table 2, I will only get to earn 1.85% interest per year, down from 2.25% currently. On the other hand, I am sure there are many other better fixed deposit accounts which you can earn more than 1% with $200,000 rather than park it under OCBC 360 Account for 1% on the first $70,000. That means the balance $130,000 will be idling in the account and only accrue a miserable 0.05% base interest.

While OCBC calls it an ‘enhancement’, I seem to interpret that they telling us that the good O’ days of OCBC 360 Account is going to be over soon :(

Maybe it’s time to search for other better savings account now.

Will you continue to pledge your loyalty to OCBC 360 Account? Feel free to share your views as different people have different savings strategies :)

Cheers, EzHuat

Related posts:

What’s Next After Savings?

Update to OCBC 360 Account

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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]

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