Review: POSB Cashback Bonus Savings Account – Better than DBS Multiplier?

POSB Cashback Bonus is an interesting savings account. Instead of giving you interest on your account balance based on what transactions you perform like DBS Multiplier or OCBC 360, it directly rewards you for the transactions done.

With the major banks nerfing their bank accounts (UOB, DBS, OCBC), could this be a viable alternative?

How does it work?

POSB Cashback Bonus gives you cashback on the following categories, if you can perform at least 3 of them:

• Salary Credit (0.3%) – Capped at $20
• Credit Card Spend (0.3%) – Capped at S$20
• Home Loan Instalments (3%) – Capped at S$30
• Insurance (3%) – Capped at S$30
• Investments (3%) – Capped at S$30

Note that you have to choose between DBS Multiplier and POSB Cashback Bonus. The bank does not allow you to have both accounts at the same time.

For an example of how Cashback Bonus works, if you credit a salary of $4,000, spend $1,000 on DBS cards, and purchase $500 of DBS Invest-Saver, this is what you will get:

• $4,000 salary → $12 cashback (0.3%)
• $1,000 spend → $3 cashback (0.3%)
• $500 investment → $15 (3%)

Now, that’s $30 of cashback, which isn’t too fantastic. Fulfilling these three categories on DBS Multiplier gives you 2.2% pa interest, which is about $45.83 on $25,000 of balance.

When does this make sense then?

People with low account balances

If you hardly have any savings, POSB Cashback Bonus is obviously for you since interest-bearing accounts would just give you practically nothing. For $30 of interest, you will need at least $16,500 in a 2.2% pa account.

People who can satisfy the requirements for a second bank account

The thing is, even if you do have $10,000 to $30,000 of savings, you should still pick POSB Cashback Bonus over DBS Multiplier as you can place your savings in another account.

Even at 1% pa interest (which CIMB FastSaver offers without any conditions like salary crediting), you get $13.75 on $16,500 of savings. Coupled with the $30 from Cashback Bonus, you get $43.75 which is significantly more than $30 DBS Multiplier gives you.

At $25,000 bank balance, the 1% pa bank account gives you $20.83, which gives a total of $50.83 with your POSB Cashback Bonus, still higher than the $45.83 Multiplier offers.

If you use a second account like OCBC 360 and are able to fulfil its high interest criteria together with your POSB Cashback Bonus, the difference is even more staggering – hit 2% pa and you are getting $71.67 on $25,000 of bank balance. (To be fair, you may have to shift some income and card spend to your second account, but it shouldn’t affect your POSB Cashback Bonus too much given that those categories are only 0.3%).

People with a DBS/POSB mortgage

I fall into this category! Previously, I mentioned that it’s easy for DBS mortgagors to make DBS Multiplier work for them since they clear 1 category easily. This is even truer for POSB Cashback Bonus, and you get 3% rebate on your mortgage. Pretty generous, even if it’s capped at $30 which most home loans would run into.

A combination of POSB Cashback Bonus your savings in a second high-interest bank account would likely be far superior to just relying on a single high-interest bank account.

Calculator

To find out whether or not POSB Cashback Bonus works for your specific set of circumstances (versus just using DBS Multiplier or another high-interest account), I have created an online calculator! While I’ve tried to make it as accurate as possible, do let me know if there are any bugs or miscalculation 😅

Converting from a DBS Multiplier

If you have an existing DBS Multiplier account, you can convert it into a POSB Cashback Bonus via your online banking. The process is instant, but you would lose any interest that hasn’t been credited to your account.

Conclusion

The POSB Cashback Bonus isn’t so much a replacement for high-yield savings account as it is a very good supplement to it.

If you are able to split your salary to fulfil $2,500 here and $2,000 somewhere else (OCBC 360 perhaps, which is reducing the salary requirement to $1,800), and clock two more categories for POSB Cashback Bonus, you are going to get quite good returns that no one account can match.

The good:

• Great for those without much savings
• Excellent for people with a mortgage with DBS/POSB
• Superior returns if you are able to qualify for another high-interest account and put your savings there

The bad:

• Requires 3 categories
• Salary credit is $2,500 instead of the usual $2,000

The ugly:

• Investment/insurance categories only last for 12 months… troublesome

★ ★ ★ ★ ★ ★ ★ ★ ★ ☆
9 Stars of Sethisfaction

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