Accounts that give higher interest upon fulfilling certain criteria such as salary crediting, credit card spending, investing etc. have been around for some time, and most of them hover around 2 to 2.5% pa.
To get closer to 3%, one typically needs to do atypical activities such as buying insurance or investment products, many of which come with hefty commissions and fees which isn’t a worthwhile exchange for higher interest on your savings. I would say that you should never buy any financial product from a bank unless you know what you’re doing.
Here’s a strategy to get close to 3% pa interest without having to buy any products from a bank.
What you’ll need:
- OCBC 360 account
- UOB One account (or any other high interest account like DBS Multiplier, Maybank iSavvy etc.)
Park $75,000 in an UOB One account, with 3 GIRO arrangements set up. Quite easily achievable as each credit card you link to it counts as one, so all you need is a few cards, insurance premiums, bills etc. Clocking $500 on UOB cards isn’t difficult too considering how it has one of the better cashback cards right now in the market. This gives you 2.44% pa interest.
At the end of each calendar month, transfer $70,000 to the OCBC 360 account. This fulfils both the Boost and Step-up bonuses. All you have to do next is to credit your salary of at least $2,000 to this account, and then spend $500 on an OCBC card if you can. Not too difficult as they have pretty decent miles cards. This gives you:
- Base rate (0.05% pa)
- Boost bonus (1% pa)
- Step-up bonus (0.45% pa)
- Salary bonus (1.6% pa)
- Spend (0.45% pa)
A handsome 3.55% pa interest rate on every alternate month, which, coupled with the 2.44% pa from UOB One, gives you a blended 2.99% pa interest on $70,000 of savings ($5,000 would be left in your UOB One, which works to pay off the GIRO).
Is the 0.45% pa on top of the 2.44% given by UOB One worth the trouble? Going by my calculations, it’s an additional $30 per month you can get by performing a FAST transfer once a month. I’m sure some high SESers would disagree, but that’s very little work for $30.
In fact, what if one has two OCBC 360 accounts you can alternate between? That’s a solid 3.55% pa interest every month! However, each person can only have one 360 account… a limitation I’m sure more intrepid individuals would be able to creatively find their way around 😉