Review: HL Bank iSavings Account – 1.98% pa On Up to $200,000

HL Bank – that’s Hong Leong Bank, which should be a more familiar name – is offering a promotional rate of 1.98% pa interest on balances up to $200,000. The interest rate will be applicable from 1st February to 30th April. A three-month “fixed deposit” with high-ish interest rates and 100% liquidity? Not too shabby.

Features and fees

A minimum of $1,000 is required for the 1.98% pa to apply, and the rate applies for balances up to $200,000. The next $800,000 in excess of $200,000 still gets 1.48% pa, but I’m guessing you’d want to put those funds somewhere else.

For their savings accounts, a minimum balance of $1,000 has to be maintained or there would be a fall below fee of $10. Closing the account within the 6 months of its lifespan would also incur $30 in fees.

Update 13 Feb 2020
HL Bank has reached out to me to clarify that there will be no fall-below fee for the months of February, March, and April 2020.

A triplet to i-Savvy and e$aver?

1.98% is quite high for savings accounts that don’t require you to jump through hoops like salary crediting and credit card spending, and this is what would attract many cash-rich people looking for short-term, liquid instruments to park excess funds.

Given that it gives higher rates than StanChart e$aver and even Maybank i-Savvy, it is a good alternative to e$aver to complement your i-Savvy account. StanChart and Maybank has been renewing their promotion for years now, and I’m not sure if HL Bank would do so. iSavings is a relatively new offering; from what I can gather it started in October 2019 with rather average rates:

No biggie though, I suppose you can just switch should HL Bank not renew this promotion. You might, however, be forced to maintain $1,000 with the bank to avoid a fall-below fee while you wait for 6 months to be up before terminating the account without early closure fees.

On fall-below fees

Now, an aside on fall-below fees: several people have asked about the topic of fall-below fees when I previously mentioned that e$aver does not charge fall-below fees if your account is at $0. My experience thus far with bank accounts (specifically, OCBC and StanChart) is that the banks do not deduct a fall-below fee if there is simply no money in the account to be deducted.

Unfortunately, I also recently had a dormant UOB account with zero balance that has recently gotten a $5 fee deducted as an overdraft. Bummer. Not sure how HL Bank handles, but given that the minimum balance is $1,000, I probably wouldn’t risk it. If you calculate an opportunity cost of 1.98% pa, the loss in interest monthly is only about $1.65.

Conclusion

You can sign up here.

The good:

  • High 1.98% pa interest for three months without doing anything
  • Good account for alternating bank accounts for bonus interest

The bad:

  • Not sure if it will be renewed like i-Savvy/e$aver

The ugly

  • Dealing with the hassle of winding up a bank account if promotion is not renewed

★ ★ ★ ★ ★ ★ ★ ☆ ☆ ☆
7 Stars of Sethisfaction

Same score as Maybank i-Savvy. Plus: higher interest rate. Minus: uncertain viability in future

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