Interest Rate Shuffle: Choosing the Best Savings Account
As inflation dips, so too do savings account interest rates. Many benefitted from a solid 5% annual return on S$100,000 deposits in the UOB One Account which was the highest interest savings account. However, the landscape is shifting.
Effective May 1st, 2024, UOB One Account‘s interest rate will drop to 4% p.a., alongside a higher minimum deposit requirement of S$150,000. Standard Chartered quickly followed suit, lowering their BonusSaver account rates from 4.88% to 3.68% p.a. Will other banks follow suit?
More importantly, which account now reigns supreme?
I did an analysis based on three deposit amounts: S$100K, S$150K and S$200K with credit card pairing and here are my findings.
At S$100K deposit:
Top two pairing with the highest ROI (interest earned + cashback) will be:
- OCBC 360 Account + OCBC 365 Credit Card @ 4.94% (min spend: S$800)
- OCBC 360 Account + OCBC Infinity Credit Card @ 4.75% (min spend: S$500)
Interest Earned Yearly | Cashback Earned on Credit Card | Min. Card Spend Required | Total Interest + Cashback Aarned | Annualized ROI | ||
OCBC 360 + OCBC 365 card (assume fufill salary + save + spend criteria) | 4,650 | 288.00 | 800.00 | 4,938.00 | 4.94% (Highest!) | assume 3% cashback earned |
OCBC 360 + infinity card (assume fufill salary + save + spend criteria) | 4,650 | 96.00 | 500.00 | 4,746.00 | 4.75% | assume 1.6% cashback earned |
UOB One + UOB Evol (assume fufill salary + spend criteria) | 3,375 | 483.60 | 600.00 | 3,858.60 | 3.59% | assume 6.72% earned on S$600 |
UOB One + UOB One (assume fufill salary + spend criteria) | 3,375 | 199.80 | 500.00 | 3,574.80 | 3.57% | assume 3.33% cashback earned |
OCBC 360 Account + Credit Cards:
This pairing offers the highest ROI (up to 4.94%) by combining the OCBC 360 Account with either the OCBC 365 Credit Card (minimum spend S$800) or the OCBC Infinity Credit Card (minimum spend S$500).
However, the OCBC 360 Account comes with three requirements:
- Salary crediting: Your salary must be deposited from a corporate account with the purpose of payment being “SALARY” to qualify for the full interest rate.
- Savings increase: You need to increase your balance by S$500 monthly for bonus interest, with potential “resets” impacting your ROI. Check the OCBC app under “Money Insights” > “Total Balance” to see if you meet this criteria.
- Spend S$500 a month on one of these OCBC Credit Cards: OCBC 365, OCBC Infinity Cashback, OCBC NXT, OCBC 90N or OCBC Rewards.
Who is the OCBC 360 Account a good fit for?
- Salary earners with corporate accounts: If your salary of at least S$1.8K is deposited from a corporate bank account each month, you’ll qualify for the best interest rate.
- Regular savers: To maximize your returns, aim to increase your account balance by S$500 every month. However, the account still offers a competitive interest rate even if you can’t meet this increase.
- Flexible spenders: The minimum spend requirement is S$500 per month, but it’s not mandatory to earn a decent interest rate.
Which OCBC Card should I go for?
- High spenders (S$800+ monthly): Opt for the OCBC 365 Credit Card. While my calculations assumed a conservative 3% cashback, some categories like petrol or dining offer much higher rewards.
- Lower spenders or those with better cards: Choose the OCBC Infinity Card. It has no minimum spend and lets you earn unlimited cashback (though at a lower rate of 1.6% on qualifying purchases). However, to meet the OCBC 360 Account’s S$500 minimum spend (separate from the credit card spend), you’ll still need to try and reach that amount with your Infinity Card purchases.
Good news: Meeting the OCBC 360 Account’s requirements is flexible. Unlike UOB One, where the S$500 minimum spend is crucial for decent interest, you can still earn interest on the OCBC 360 Account even if you don’t hit the credit card spend requirement. You just won’t qualify for the full potential ROI.
Why not Miles Card for this pairing?
You can. But this comparison focuses on one catch-all card that reward everyday spending (groceries, dining) because miles cards often target specific categories and require tracking various programs. Cashback offers a simpler approach for most consumers.
At S$150K deposit:
Top pairing with the highest ROI (interest earned + cashback) will be:
- UOB One Account + UOB One Credit Card @ 4.13% (min spend: S$500)
The UOB One Account shines at this deposit amount:
Interest Earned Yearly | Cashback Earned on Credit Card | Min. Card Spend Required | Total Interest (S$150K) + Cashback Earned | Annualized ROI | |
UOB One + UOB One (assume fufill salary + spend criteria) | 6,000.00 | 199.80 | 500.00 | 6,199.80 | 4.13% |
Who is the UOB One Account a good fit for?
- High savers with S$150,000: This account shines for those with a larger deposit (S$150,000 minimum) they’re comfortable keeping on hand.
- Salary earners (flexible): you can do the salary hack by making a min. S$1,600 of non-FAST Transfer from another bank account (DBS, Standard Chartered, UOB, CIMB, but not OCBC) into your UOB One Account and choose the purpose of payment as “SALARY” and your UOB One Salary requirement on your UOB One interest tracker will be fulfilled in two days.
- Minimum spenders (S$500 monthly): You’ll need to consistently spend at least S$500 per month to qualify for the advertised interest rate.
Which UOB Card should I go for?
- The UOB One Card is a good fit. It fulfills the minimum spend requirement for the UOB One Account without needing to maximize your credit card spending.
Remember: The S$500 minimum spend is essential to earn the best interest rate with the UOB One Account.
At S$200K deposit:
Top two pairing with the highest ROI (interest earned + cashback) will be:
- OCBC 360 Account + OCBC 365 Credit Card @ 3.69% (min spend: S$800)
- OCBC 360 Account + OCBC Infinity Credit Card @ 3.60% (min spend: S$500)
Interest Earned Yearly | Cashback Earned on Credit Card | Min. Card Spend Required | Total Interest (S$150K) + Cashback Earned | Annualized ROI | ||
OCBC 360 + OCBC 365 card (assume fufill salary + save + spend + grow criteria) | 7,100.00 | 288.00 | 800.00 | 7,388.00 | 3.69% | assume 3% cashback earned |
OCBC 360 + infinity card (assume fufill salary + save + spend + grow criteria) | 7,100.00 | 96.00 | 500.00 | 7,196.00 | 3.60% | assume 1.6% cashback earned |
As the OCBC 360 Account has an additional “Grow” criteria that gives you an effective interest rate of 2.4% p.a, it gives a higher ROI than UOB One at S$200K deposit. However, I would probably stick to S$150K deposit with UOB One or S$100K deposit with OCBC 360 and park my excess cash elsewhere at this point.
Free SG Bank Interest Rate Comparison Tool:
A helpful calculator made by a kind follower, ky_99249, lets you compare potential returns based on your salary, spending, and savings habits. While it doesn’t factor in credit card rewards, it’s a great tool for a quick comparison.
The Bottom Line:
Banks may adjust rates. Currently, OCBC seems to be capitalizing on UOB One’s rate drop by offering a signup bonus.
Remember, the best account prioritizes your needs. So, choose wisely!
UOB One Sign Up Promotion:
- Receive S$60 Cash via PayNow with no minimum spend required
- Valid until 20 December 2024
- Read Terms and Conditions here
- Must fulfill spending requirement to receive gift confirmation
- Remember to check for SingSaver email to secure your rewards after you have applied!
OCBC 365 Sign Up Promotion:
OCBC Infinity Sign Up Promotion:
Credit cards change their T&Cs every so often and it is difficult to stay updated. That’s why I created a Telegram Broadcast where you can receive timely bite-sized updates to get the most out of your spending.
