My memory may not be the best, but I vaguely recall OCBC 360 being one of the earliest accounts to offer higher interest rates if people jump through the hoops of crediting their salary, using specific credit cards, paying bills, and buying financial products from the bank. They weren’t the first, but their interest rate was certainly compelling.
Years on, this type of savings account has become the norm, albeit constantly being revised, tweaked, and nerfed. Has OCBC 360 aged well against its peers? Let’s find out.
Categories to be fulfilled
OCBC 360 probably has the most categories for bonus interest – 6 of them to be precise. I praised UOB One account for being simple, but having more categories is also an opportunity for higher interest rates for those who are more willing to do some hoop-jumping.
We can easily eliminate Grow bonus for the simple reason that if I had $200,000 in my 360 account, $130,000 will be earning next to nothing in interest just so that I can get extra 1% on the first $70,000.
Even without actual calculation, we can figure that it’s much better to just find other accounts for amounts in excess of $70,000 which is the maximum capacity for 360’s higher interest rates.
Salary and Spend: Easy, but more on spending later
Salary and card spend categories are pretty standard fare for such accounts, and just qualifying for these two give you a blended interest of 2.10% pa on $70,000 of savings, but only 1.55% pa for balances $35,000 and under.
Unfortunately, OCBC has opted for staggered tiers for interest so you’d have to do a little calculation depending on your bank balance. Balances between $35,000 to $70,000 would receive an effective rate between 1.55% pa to 2.10% pa depending how much there is to fill up the higher interest tier.
Step-up: doable, but requires some attention
Step-up is pretty easy to meet, but does require a little bit of tracking since each month’s average balance needs to be $500 higher than the preceeding month to qualify. What I do is to credit my salary into the account, and transfer all but $500 of it into another bank account which is also used for bill payments to ensure my 360 savings never decrease. Accomplishing this category gives you a blended 0.45% pa on $70,000, bringing it to 2.55% pa for hitting 3 categories.
This is also OCBC trying to lock your savings in somewhat, since you would want your monthly balance to increase each month. If you have $70,000 in January, you would want to have $70,500 in February. Say if you used $1,000 to pay for a holiday and ended up having $69,500 instead you would lose as much as $25 in interest for the month of February.
It also puts people with the maximum of $70,000 in an awkward position as they would have to gradually increase the sum by $500 each month, and amounts above $70,000 don’t enjoy the high interest. Having a few thousand above $70,000 may not matter that much, but if you assume an opportunity cost of 2% pa interest on $6,000 of excess savings, it’s a loss of $10 in interest every month. That adds up, so a reset to $70,000 has to be done at some point, which means missing this bonus for a month.
Wealth: unit trusts is a possible option to qualify for this category, although it’s more to offset the fees for the unit trust
As I’ve mentioned several times before, I think buying insurance/investment products from a bank is generally a bad idea, and this is even truer for OCBC because they even require minimum purchases for this category to be fulfilled.
Looking at the list of eligible products, unit trusts seem the least costly in terms of fees and commitment period and can be considered if you have $20,000 to spare. The expense ratio of the unit trust could be offset by the rather substantial additional interest, especially if your balance is high.
Their online sales charge seems cheap enough at 0.88%, and if you add an annual management fee of 1.5%, you’d have incurred about $476 on fees on a $20,000 investment for a year. If your balance is $70,000, you’d get $630 of interest in a year from this category alone, and so it actually makes sense here. It’d be like getting a unit trust investment for free for a year, and earning a little in the process. That is, of course, you see a fund that you do want to invest in.
Returns & Comparisons
My conclusion is that you’d be able to realistically hit either salary and spend, and even throw in Step-up into the mix and use the OCBC 360 account as a save-only account:
(up to $35,000)
|Salary + Spend||1.55%||2.10%|
|Salary + Spend + Step-up||1.85%||2.55%|
It stacks up favourably to UOB One and DBS Multiplier if you use Step-up:
|UOB One||OCBC 360¹||DBS Multiplier²|
- OCBC 360 assumes the following criteria are met: spend + salary + step up. Do note that you can have $70,000 instead of $75,000 in OCBC 360 to achieve $152 since the max cap is $70,000 for OCBC 360.
- DBS Multiplier assumes: spend + salary + investment/insurance/home loan
The thing about spending $500 monthly with OCBC cards
UOB One Account was recently quite affected by the nerfs done to its companion UOB One Card. Post-nerf, UOB One gives either a mediocre 3.33% cashback for $500 monthly spend or a decent 5% if you can still clock $2,000 every month. How does OCBC hold up in this regard?
I really like OCBC Titanium Rewards and 90°N, but they are unfortunately very situational cards.
90°N is great for travel (until February ends), and Titanium Rewards is good for electronics and clothing, but unless you’re reguarly travelling, buying electronics or shopping for clothes to the tune of $500 neatly per month, none of these are everyday categories. These are cards that shine when you have large, one-off transactions to be made, not regular everyday spending.
The only card that I can think of within OCBC’s repertoire of products that can be used for most everyday expenses would be OCBC 365, which is unfortunately a rather weak cashback card. 3% pales in contrast to the Maybank FnF’s 8% on very similar categories. The minimum spend of $800 means you are giving up an additional 5% of cashback worth $40 for the spend interest. That’s… not worth it.
Even if you’re a miles kind of person, I don’t think you’d settle for 90°N’s 1.2 mpd when 4 mpd cards exist. Your opportunity cost is about 1,400 miles monthly (2.8 mpd x 500) – about $14 to $20 in value depending on how you value miles.
In contrast, DBS has decent miles and cashback cards for its Multiplier account, and you don’t even need to spend beyond a dollar if you’re the frugal sort, or wish to employ cards outside of DBS. This is a major point to consider if you’re deliberating between DBS Multiplier and OCBC 360 since card rewards can be quite substantial.
Nevertheless, do sign up for OCBC cards here; OCBC Titanium Rewards is excellent regardless whether you use the OCBC 360 account.
Boost: the game of alternating bank accounts
Now, Boost is such an interesting category it deserves its own subheading. It even deserves its own article. If you are able to somehow control two OCBC 360 accounts and make sure the salary and spend portions are taken care of on both accounts, you can alternate funds on the monthly basis so that you are always fulfilling Boost for a significant 1% pa extra, and in the process also qualifying for step-up.
For $70,000, the interest rate becomes:
- Base 0.05%
- Salary: 1.6%
- Spend: 0.45%
- Step-up: 0.45%
- Boost: 1%
That’s a really good 3.55% pa each month. Of course, this is really jumping through hoops since you would need to find someone you can trust for the second account. Otherwise, you may just want to settle for almost 3% as stated in the article linked above.
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OCBC 360 isn’t too shabby for someone who just wants a salary-crediting account, although given the card situation you might want to look at DBS Multiplier, unless OCBC’s situational cards inexplicably suits your monthly spending habits. For this fact, I have to say it’s at best worth 7 Stars.
Where it truly starts to shine is for those who are really hands-on and willing to undertake a little bit more inconvenience for optimal interest rates. For such people, OCBC 360 is currently compelling in the market for being having the Boost and Step-up feature that can be gamed by alternating funds.
- Salary, Spend and Step-up categories are easy to fulfil and give decent returns
- Boost category gives opportunity for high returns in exchange for some trouble
- OCBC cards like OCBC Titanium Rewards have good rewards
- OCBC’s good cards are situational and difficult to use on a regular, monthly basis to fulfil Spend category
- OCBC 365 is easy to use regularly but isn’t a very good cashback card
- Being reminded that OCBC 360 used to give 3% just for fulfilling 3 simple requirements