Since the last article on the best savings accounts in August 2018, much has changed with 1-month SIBOR rates having climbed from c. 1.50% to a peak of c. 1.90% for much of 2019 before coming down to below 0.25% in recent weeks. With the US-China trade war impacting interest rates in late 2019, the ongoing Covid-19 outbreak brought the interest rates in Singapore down to similar record lows last seen back in 2011.

With this, it will be inevitable for banks in Singapore to start visiting the aggressive interest paid on savings account since. OCBC has announced that their revision earlier this month, with the revised rates effective from July 2020 onwards. Following which, SCB has also announced changes on its Bonus$aver product. We have yet to hear from the rest of the banks, although I do be surprised if the other banks will be able to hold the rates at current levels considering the low interest rate environment.

Comparing the Top Savings Product (Updated as of 13th Jun 2020)

Similar to the previous analysis, have excluded DBS‘ Multiplier Account and Citi‘s MaxiGain and Interest Plus Accounts as I feel that the products are not as competitive. Have included CIMB‘s FastSaver-i Account in the analyst this year as their rates now seems rather aggressive and will be outperforming both OCBC’s 360 Account and SCB’s Bonus$aver once the revised rates are effective.

Note the above calculations takes into account an average person’s credit card spending and salary, i.e. > S$500 monthly spent and above S$3,000 take-home salary. And have excluded all the bank’s additional interest payout if you should have any investment or insurance with each of the banks, as personally I usually make my investment and insurance decisions independent of such short term savings interest considerations.

The clear winner remains as BOC’s SmartSaver based on an actual % returns of 2.35% p.a., which is down from 2.85% back in 2018. Note, this is capped at the first S$60,000 of your savings with BOC, with any amounts above S$60,000 earning only a 1.00% interest. Having said, you should only consider BOC if you are able to manage their inferior online banking platform.

Pros and Cons of each Savings Product

 

 

OCBC 360 Account (Find out more here…)

Pros
– Just continue to maintain your salary crediting and ensure your average monthly balances climb by a minimum of S$500 a month to enjoy 1.20% p.a. interest rates. Simple.
– Salary Credit has been lowered to start from S$1,800, from S$2,000 previously.
– If this matters to you, OCBC is amongst the world’s best credit rated banks. Although your first S$75k with each bank in Singapore is guaranteed under Deposit Insurance Scheme anyway.
– Still arguable one of the best online banking platforms for users, in my humble opinion.
Cons
– It really is just a savings account now, having removed all additional interest features on credit card and payment flows.
– Being the first bank to revise its rates, the OCBC 360 Account now ranks poorly against the other banks’s product offering.

 

 

 

CIMB FastSaver-i Account (Find out more here…)

Pros
– Fuss-free, no conditions setup. CIMB’s product is basically a savings account with step-up interest rates as you place more savings with the bank.
Cons
– You only get to enjoy the average interest of 1.325% if you place a S$100,000 with the bank, and this drops to 1.167% if you balances is at S$75,000 and even lower to just 1% for your first S$50,000.

 

 

 

SCB BonusSaver Account (Find out more here…)

Pros
– If your card spending exceeds S$2,000, the interest on credit card spends increases from 0.30% to an impressive 0.80%, including the base interest rate of 0.05%. That said, if you are spending so much on your credit cards, you should focus more on reducing your expenses than increasing your savings interest. Just saying.
– The 3 Bill Payments can be online payments via SCB’s online banking as well. GIRO payments are such a hassle to set up at times.
– If you maintain a savings level above the average cap of S$60,000 to S$75,000 as seen in other accounts, SCB’s BonusSaver cap is at S$80,000. This will save you some hassle of having to maintain additional savings account, although this is down from the earlier cap of S$100,000.
Cons
– The revised payout of just 0.80% is rather pathetic. Much ado about nothing.
– The BonusSaver Credit Card does not give you any other benefits.
– Salary Credit is only valid for salaries of above S$3,000.

 

 

 

UOB One Account (Find out more here…)

Pros
– The flexibility of either salary crediting or 3 Giro Payments makes earning the higher interest much easier.
– You can enjoy the credit card benefits on your expenses as well, earning rebates while maximising your savings.
– Similar to OCBC, UOB is rate AA- and is amongst the world’s best credit rated bank.
– A recent update to their online banking platform makes its very customer-friendly.
Cons
– Active monitoring of your expenses on the UOB One credit card to ensure you meet expense levels for 3 consecutive months and minimum of 5 separate purchases monthly. Skip this card and go for either YOLO or the Lady’s card, depending on which fits your spending pattern best.
– Not all credit cards are included for this, so do check which selected credit cards are included.

 

 

 

BOC SmartSaver Account (Find out more here…)

Pros
– Despite already being the program with the best returns, if your salary is above S$6,000 and you typically spend more than S$1,500 a month on your credit card, the interest rate improves from 2.35% to a whopping 3.55%.
– You can enjoy the credit card benefits on your expenses as well, earning rebates while maximising your savings.
Cons
– Unlike in 2018, I have had first hand experience dealing with BOC and admittedly it has not been the most pleasant relationship. From a substandard online banking platform, to a rather onerous phone banking experience, you can get a snapshot of how far behind BOC is on being a customer-centric bank just by taking a look on its bank’s website. Even the 3.55% will be a tough push for me to head back. You have been warned.

Conclusion

Post my article in 2018, I have personally used both OCBC 360 Account (Salary Crediting Account, enjoying up to 2.4% p.a.) and UOB One Account (with 3 Giro payments, enjoying up to 1.796% p.a.) to maximise my savings interest, and earn cash rebates through my daily expenses on OCBC’s 365 and UOB’s YOLO credit cards. This primarily stems from my preference for cash rebates. For episodic expenses, these are done through other miles-accretive credit cards, since the occasional Business Class flights during personal travels is always an enticing proposition.

With the low interest rate environment now, and the revised OCBC’s 360 account being such a disappointment, my personal take will be to stick with just UOB One account and swinging my monies out from OCBC 360 Account to other higher risk products. These includes placing monies with robo-advisor platforms such as StashAway which is paying 1.90% on its Simple product. You can also consider placing your a maximum of S$10,000 into Singlife account which pays up to 2.5% on your first S$10,000; and up to 1% for your next S$90,000. Do note that those products are of a different risk profile, and may not be principal protected (i.e. StashAway) nor guaranteed under Deposit Insurance Scheme. Do your own research before investing. Having said, with interest rates going down, incremental risks is definitely required if you are looking to enjoy comparable rates on your savings. Otherwise, do expect lower interest rates on your savings going forth.

And despite BOC’s high interest on its SmartSaver account, I am steering clear of the bank for now.

If you are looking to invest in StashAway, do click on the referral link here to enjoy fee waiver for 6 months for your first S$10,000 investment on the platform.

P.S. Let me know your thoughts by commenting below or dropping a note.

Ranted by The Rantee