Savings account- Time to change!

savings

Still using POSB savings account?

TIME TO CHANGE!

 

You must have seen recently the number of posts on OCBC 360 account on the internet, about how unfair they were to review the criteria of payout interest shortly after introducing this plan to the public. Well, I felt that way too when I heard the news, one reason being I had just switched my savings account to OCBC 360 3 months ago.

 

Right now I can tell you that I have changed three savings account, and might soon be changing again. Why the hassle?  Well, I can’t use this money for investments; it is saved for a rainy day, so I have to store it aside to collect interest just to make the most out of it.

 

A month ago I was thinking of writing about OCBC 360 account, however, just yesterday, I discovered a new savings account from the BF’s friend! (Thanks Alfred!) 

 

*Jumps for joy*

 

So let me do a comparison of this new account UOB ONE Account and OCBC 360 Account.
Both are similar in some ways, but if you do own a ONE Card, it will be plus plus plus advantage for you. For benefits of ONE Card, please click here, where I did mention how to maximize its usage for both the BF and me.

 

No ONE Card? Not to worry, you can still use the debit card which will be issued to you as an ATM card.  It works fine when combined with ONE Savings Account. Ways to accumulate interest (as extracted from UOB website itself):
UOB SAVINGS

 

As compared to 360 OCBC account (shown below), you only have to meet 2 criteria instead of 4.
ocbc 360 savings

 

However, if you are in a situation like me, currently using 360 account and do not wish to head to the bank to close it, you can choose to leave unchanged the option of crediting your salary to OCBC savings account where you can still earn 1.2% of interest, as well as open a ONE savings account with UOB, meeting the criteria of 1. Min spend of $500 and 2. Make 3 GIRO transactions.

 

calculations_savings

Option 1: If you choose to dump all your savings in one savings account, you can choose this option. The table above shows an estimation of interest earned in a year. If you choose UOB account, assuming you have $40,000 inside, you can earn interest of 3.33% ($883), on top of that, if you use UOB ONE card, you can have an additional of 3.33% ($120) interest in a year. If you prefer to continue using OCBC 360 account, you can earn 3.2%  ($917.76) interest, provided you have an increment of savings every month from $40,000 to $50,000, over a year . Assuming you use 360 credit card, worst case scenario you can only get 0.3% ($18) of $500. So in total, as you can see, UOB will be the preferred bank, although the difference is not much.

 

Option 2: If you decided to split your money between 2 accounts as recommended, (OCBC: min deposit of $3,000 and UOB: all your remaining savings), you can look at this option. If you own UOB account, majority of the savings will be deposited into this account, assuming $40,000. The interest you can get from meeting both criterias, with additional of interest from UOB ONE card, you can get a total of $1003. As you have to have a minimum deposit of $3000 inside your 360 account, you only meet 1 criteria, which is the crediting of salary (1.2%). Therefore, you will earn a total of $1039 of interest if you use 2 savings account.

 

Which one is a better option? Whether the difference in a few dollars is worth so much effort? You decide.

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1 Comment

  1. Desmond

    Max effective interest rate is 2.43%

    Reply

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