OCBC 360 Account with up to 3.05% pa interest versus Standard Chartered Bonus$aver 1.88% pa

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OCBC 360 Account with up to 3.05% pa interest versus Standard Chartered Bonus$aver 1.88% pa


Last week, OCBC launched a flexible savings account known as OCBC 360. Basically this new savings account is a pretty decent one which will probably generate lots of funds and it is probably a cheaper alternative to launching a Bond for investors to fund their expansion in Hong Kong.

Anyway, back to the product itself. Currently, DBS and Citibank have similar plans where they pay you a higher interest rate on your funds. For Citibank you invest into regular savings plan or buy an insurance with them and earn up to 2.5% pa for the first 50,000. As for DBS multiplier 2.08%,you will have to consolidate Salary, Credit card spend, Home Loan instalment and Investment dividends and they will give you up to 2.08% pa for the first 50,000.

Standard Chartered's Bonus$aver 1.88% is another plan that pays well but it is only for the first 25,000. The condition to satisfy it simply spend (point of sales) or pay online to your debit or credit card of > $500 per month and your first 25,000 will earn 1.88% pa. There are no other conditions attached.

OCBC 360 is a bit similar to the Citibank and DBS plans. It also pays an interest for the first 50,000 of that account.

The three criterias each adds 1% to the base interest rate of 0.05% for first S$200,000. Earn interest of 0.15% per year on balance above S$200,000.

1. You earn 1% pa for GIRO your salary into the account
2. You earn another 1% pa if you spend more than $400 on OCBC credit cards. I have called and checked and it is confirmed that Plus! Card, Robinson Card does count towards the S$400 so long the OCBC cards tag to the same account. Spending using the principal account is counted towards the S$400. Sumplimentary card doesn't.
3. The last condition is that if you make 3 unique bill payments from this account with OCBC Online Banking using Pay Any Bill and Pay Any Card services or use GIRO, you earn another 1 more %.

I think that the OCBC 360 will definitely suck in lots of funds from other banks. With FAST transfer in place, more funds will just be transferred into the OCBC vault to take advantage of this unusually high 3.05% pa.

Most people feel that they can't spend S$400 a month. In fact, it is quite easy to acheive that. Telco bills usually adds up to almost S$70 to S$80. Groceries probably S$200 a mth. The rest can be made up of other purchases etc. If i use Plus card, I also earn points at participating stores like NTUC Fairprice.

I have been using BonuSaver for a year earning that extra interest fulfilling the > S$500. I intend to switch over to OCBC and give it a try. The only trouble is to rearrange some GIRO arrangements or to manually pay some of the bills online, including the credit card bill or pay another banks credit card bill via ocbc.com online portal. That should make it count to 3 times a month.

I am sure banks like CIMB or Maybank will come out with more creative plans to grab the outgoing funds. Stay tuned. The war for SGD is beginning and will be fiercer in time to come when US raise interest rates and our mortgage rates will also rise.

OCBC 360 is definitely the winner right now if the conditions can be loosen. e.g. enable sub card holders to add up to the maincard monthly spending. Those without credit cards (debit card users) cannot take advantage of this savings which is really a shame (SCB can). Thirdly, unemployed can't take advantage of the additional 1% as they have no salary to transfer in from.

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The OCBC 360 account was a great promotional drive by OCBC to get folks to switch to bank with them by offering 3 optional clauses to get a total of 3.05% interest (read here). My friend prompted me last 2 weeks when he tried to open the account and was told the bonus interest will be reduced. Looks like they decide to provide the announcement on April Fools Day, which, if my friend didn’t tell me previously I would have thought its a joke.
Notice here

The hurdle rate for credit card qualification have increased, but the bonus for payment bonus and credit card have been reduced.
OCBC will introduce 2 more clauses so that we can eventually hit 3% again.
But after this move I think much folks are still sore over it. The reason of the soreness is that in their minds, they expect these kind of great deals to go on forever. And many have shifted a large part of their money over.
Still, it still looks good in my opinion and I think the costs of the pay out for these loans from depositors are getting a bit expensive for them.
My advice is that, if your world only revolves around fixed deposits and savings account as such, you will tend to find all these deals to be fleeting. Build up the wealth building knowledge to understand that your money have different time horizons and part of the money can be channel to higher yielding, but higher volatile instruments.