OCBC is drastically reducing the interest rates of its OCBC 360 savings account, more than halving the interest rates. This follows the really recent revision done previously.
What has changed?
They have halved the interest rates for Salary and removed the Spend category altogether.
First $35,000 / Next $35,000
|From 1st July|
First $35,000 / Next $35,000
|Salary||1.2% / 2.4%||0.6% / 1.2% (halved!)|
|Spend||0.2% / 0.4%||0% (removed)|
|Save||0.2% / 0.4%||0.2% / 0.4%|
|Wealth||0.6% / 1.2%||0.6% / 1.2%|
This is a really drastic drop, even outdoing UOB One’s cuts. At balances under $35,000, you are realistically going to get 0.8% pa by crediting your salary and increasing your balance from the previous month by $500 to qualify for the Salary and Save categories.
At a full account of $70,000, the realistic interest rate is a miserly 1.2% pa.
Wealth category requires you to buy a financial product – usually a bad idea – and Grow category is just silly even for people with $200,000 to place in savings, so these two categories are untouched by OCBC, just as they are untouched by most people looking for savings yield.
It also shows the folly of buying a financial product from a bank just to have a little extra interest because you might find your interest rates slashed any time.
Revising it so shortly after the last revision also leaves a bitter taste since I’m sure there are many people who shifted to OCBC 360 because it has the slightest nerf previously.
However, I will choose to take OCBC at face value that they have tried to maintain good value for their customers until it was impossible to do so:
Unfortunately, the macro interest rate environment has been deteriorating since last year and has declined steeply since March 2020.
While we hoped to continue offering our customers the best proposition possible, the current macro-economic environment has made it impossible to do. We will continue to monitor the macro-economic environment and improve our product offering(s) once it becomes viable to do so.
Unfortunately, the big cuts just make it untenable for me to stay with OCBC after the nerfs hit.
SingLife Account looks increasingly good considering this nerf, despite its low $10,000 cap for 2.5% pa. Even the 1% pa it gives beyond the $10,000 cap no longer seems very unattractive. (I might even get trusted family members to set up accounts for more 2.5% pa.)
Alternatively, UOB One becomes viable again, so I may take a look at that. I would look at DBS Multiplier, but I doubt that would make more sense for me having changed to POSB Cashback Bonus.
I have a few other alternatives I will look into and review, and I have also heard that there’s a new product (or two) that might satiate interest-hungry savers. Subscribe to my Telegram channel if you want to stay updated.
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