Nerfed: DBS Multiplier Dropping Rates… Again! Here is a Better Strategy

Thanks to Darrell who first surfaced this in the Telegram group!

DBS Multiplier has remained pretty much the last bastion of high-yield savings accounts, but 2020 claims another victim with yet another round of revision. According to my weak memory, this is perhaps the fourth time this year DBS has revised its Multiplier account, and this time it’s a big nerf – rates are more than halved across almost all the tiers:

The new rates come into effect on 1st January 2021, and the realistic returns you might find yourself getting from this would be around 1% to 1.3% p.a, and that’s while still having to fulfil its usual requirements across the different categories. Unless you’re managing ≥ $30,000 of eligible transactions per month, which would still net you a respectable 2.5% p.a. rate.

Alternative strategy

What’s a good alternative to consider?

Obviously, you can look at the various insurance savings accounts that have popped up over the past year to get a more decent 1.80% to 2% p.a. interest. But if you’re already fulfilling multiple categories for DBS Multiplier, don’t let it go to waste, and switch to POSB Cashback Bonus instead. It hasn’t been revised downwards the whole of this year like Multiplier has, and fingers crossed this continues.

Cashback Bonus isn’t technically an account, and I had some confusion at the start when I switched. It’s a programme that you enrol in, and once that is confirmed, your DBS Multiplier account becomes a multi-currency account. I closed this account because there is a fall-below fee and I have no need for its fancy multi-currency features, and used my good old POSB account – the very same kids account I grew up with.

The strategy is to put the bulk of your savings into a higher yielding insurance savings account, and then meet the requirements of Cashback Bonus which would reward you with a monthly cashback.

Example

If you had $50,000 and doing 1.8% p.a. with Multiplier previously, you would be receiving about $75 in interest per month. After new year, this would be $33.33 (ouch).

If you placed the same $50,000 optimally into a cocktail of Singlife Account, Gigantiq and DashEasy Earn for a blended 1.68% p.a. rate, you would be getting $70 per month.

That’s not too shabby by itself. Now consider Cashback Bonus: spend $1,000, credit salary of $4,000, and invest $100 per month into DBS Invest-Saver and that’s another $18 on top of the $70.

At $88, that’s even better than pre-nerf Multiplier.

Look beyond just savings accounts

If your cash hoard is sizeable, you may also wish to deploy it in other areas aside from low-risk bank and/or insurance savings accounts. I intend to write about more about seeking returns, and that is more pertinent given the environment of constant rate drops we now find ourselves in. Subscribe to the Telegram channel to stay notified.

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