Review: OCBC 360 More Than Doubles Rates – Realistically Around 4% P.a. Interest Now

OCBC has increased its rates yet again just two months after its last revision. This time, the rate increase is substantial, and OCBC 360 is finally great again starting from 1st November 2022.

New Rates

SalarySaveSpendInsureInvestGrow
First S$75,0002.00%1.20%0.60%1.20%1.20%2.40%
Next S$25,0004.00%2.40%0.60%2.40%2.40%2.40%
EIR*2.50%1.50%0.60%1.50%1.50%N/A
*EIR assumes S$100,000 of balance

You can tap here to compare against the rates since the last revision, but the gist is this: every rate you see in this table has been at least doubled, with a few numbers more than tripling. This results in effective interest rates (EIR) more than doubling since the last revision:

Categories FulfilledEffective Interest Rate for $100,000
Salary + Save4.05% p.a. (was 1.50% p.a.)
Salary + Save + Spend4.65% p.a. (was 1.85% p.a.)

OCBC has even made the account more palatable for those with smaller balances. The first $75,000 now receives the same (and may I add: respectable) interest rate where it was previously split into the first $50,000 receiving the lowest interest rates, followed by the next $25,000 getting a higher rate. Any balance of $75,000 and below now gets a realistic EIR of 3.25% or 3.85% p.a.

Categories FulfilledEffective Interest Rate for Balances ≤ $75,000
Salary + Save3.25% p.a.
Salary + Save + Spend3.85% p.a.

Kudos to OCBC; a bank is finally keeping pace with the rising rates and providing competitive rates for deposits.

Salary and Save

The categories remain the same, but for those who need some analysis:

Salary – easy
S$1,800 of salary credit should be very easy for most to fulfil, and those with higher salaries and good relations with their HR department can consider splitting their incomes to satisfy multiple bank accounts that reward income crediting.

Save – easy
Increasing the average balance of the account by $500 from the previous month is relatively simple, but it also means that the funds in your account become more sticky. You are essentially discouraged from withdrawing funds from your account, since you lose a fair bit of interest if you are not able to increase your monthly average balance.

Balance AmountApproximate Monthly Interest from Save
$100,000$125 (1.5% p.a.)
$75,000$75 (1.2% p.a.)
$50,000$50 (1.2% p.a.)

Spend – relatively easy, and actually compelling now

The Spend category this time has caught my attention. While I previously saw this category as something to be skipped because you can get better returns elsewhere with a superior cashback card, having additional 0.6% p.a. interest makes this a compelling category to fulfil for those with larger balances.

With a balance of $100,000, 0.6% p.a. is about $50 a month. Since the Spend requirement is $500 a month, you could see this as an additional “10% cashback” of sorts on your spending if you put just enough spend on an eligible OCBC credit card… and have $100,000 sitting in your OCBC 360 Account, of course.

Balance AmountApproximate Monthly Interest at 0.6% p.a.“Cashback” Rate on $500 of spend
$100,000$5010%
$75,000$37.507.5%
$50,000$255%

OCBC has even included OCBC 90°N and OCBC Titanium Rewards instead of just OCBC 365. And before you ask – nope, no love for the freshly nerfed OCBC FRANK here.

If I had $100,000 in my OCBC 360 Account – and OCBC has given me very good reasons for this to be true – $500 of spend each month will now go to one of the three eligible credit cards.

This changes the value proposition for these OCBC credit cards, and even my card strategy. If I’m already putting $500 a month on the OCBC 365 card, I should just direct another $300 spend onto it to meet the minimum spend to qualify for its other cashback, right? Alternatively, I could just use the OCBC 90°N as an everyday card to hit $500 of spending, earning some miles along with the “10% cashback”.

Insure and Invest – most probably avoiding

You can get as much as 3% p.a. in EIR by qualifying for the Insure and Invest categories, but I would advise against it. It’s almost always a bad idea to buy financial products from banks, and nothing I see here tells me otherwise.

For the Insure category, you need to buy a policy of at least $2,000 annual premium, and you have to choose from a list of products that includes the usual suspects of endowment and investment-linked policies. Term policies apply too, but you have to ask whether the term product offered is price-competitive. Note that the bonus interest rate is only offered for twelve months, so you may want to think twice about locking yourself into a potentially long-term obligation just for a year’s extra interest.

The Invest category is a bit more interesting since unit trusts qualify, and they tend to contain a lot less fees than insurance products and can be liquidated anytime. I’ll need some time to study this, so for now I’m going to label this category with a “maybe”. Stay subscribed to the Telegram group for updates. 

Grow – for those with more funds

If you have filled up the OCBC 360 Account with $100,000 and have another $100,000 lying around, you may consider maintaining an average balance of $200,000 so qualify for this bonus.

Your first $100,000 gets a whopping 2.40% p.a. boost, but amounts beyond the first $100,000 get only 0.05% p.a. base interest. Qualifying Salary + Save + Spend + Grow categories nets you 7.05% p.a. on your first $100,000, with your remaining $100,000 gets 0.05% p.a. rate.

The effective interest rate is 3.55% p.a. for the entire $200,000, which is a pretty decent rate, although I think putting the second $100,000 into things like t-bills may prove more attractive for many people.

Conclusion

In this climate of rising interest rates, banks have largely responded weakly with meek increases in rates. OCBC, to their credit, has been a lot fairer to deposit holders. OCCB 360 now offers attractive rates, and the requirements are not excessively cumbersome to satisfy. This relatively bold hike in deposit rates will no doubt wake other banks up, and I, for one, have shifted my funds over.

The good:

  • Attractive rates
  • Lower balances still get decent rates
  • Requirements are easy

The bad:

  • Save category makes your funds a bit stickier for at least a month or so

The ugly:

  • Buying an insurance/investment product for extra interest but the product loses you more money

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