UOB Earmark Promo: Prepping For a Possible Q2 Promo

Update: the new UOB earmark promo takes average balance of March 2024 which means that zeroing out the account in March 2024 does not work. Subscribe for updates on a new strategy and promo analysis soon.

It’s the last month of the first quarter of 2024 and that means we can start prepping for a potential earmark promo from UOB for the second quarter of the year. If you are not sure what UOB earmark promos are all about, refer to the article here.

Possible promo mechanics

In the past year, UOB has been using the final day of each quarter as the reference date for each earmark promo it has rolled out so far. This means that the reference date is likely to be on 31st March 2024. There is some speculation that the date may be 28th March 2024 because 29th and 31st are a public holiday and Sunday respectively. Given how 31st December 2023 was both a Sunday and New Year’s Eve yet still the reference date for last month’s promo, 31st March is still the likeliest date.

To qualify for the next earmark promo, we would hence want to have a S$0 balance on 31st March 2024 or whichever date you believe to be the reference date.

Details of the new promo should be out around 1st April 2024, so stay subscribed for updates.

Timing the withdrawal is important

Going S$0 on 31st March 2024 is actually a little more tricky than it seems. One would think that it is as simple as withdrawing out the entire balance on the day itself, but owing to a bank mechanic called “value dates”, the situation might a bit more troublesome.

On non-working days, withdrawals (or deposits) are counted as being done on the next working day. Withdrawals done on 31st March 2024 which is a Sunday is going to be valued as a 1st April 2024 transaction, which means you would not have successfully zeroed your account on the possible reference date.

You should thus do it on 30th March 2024 early in the day. The timing matters because if you cross a cut-off time, your transaction is once again valued on the next working day which would be Monday, 1st April 2024.

Again, because 29th March 2024 is a public holiday, some are intending to withdraw as early as 28th March 2024 to prevent any complication from cropping up.

There is some loss of interest

Because UOB One’s 5% p.a. interest is one of the highest around, there is some opportunity cost in the form of lost interest when you zero out your account for a few days. This is especially so for those with balances between S$75,000 to S$100,000 because of UOB One’s tiered interest with the final S$25,000 of a S$100,000 balance attracting 7.8% p.a. interest.

The following is the loss of interest when you zero out your account (assuming a S$100,000 balance):

DaysAverage Daily Balance in UOB OneApproximate Lost Interest
(A)
Alternate Account Interest
(B)
Loss
(A) – (B)
1S$96,774.19S$21.37S$9.59S$11.78
2S$93,548.39S$42.74S$19.18S$23.56
3S$90,322.58S$64.11S$28.77S$35.34
4S$87,096.77S$85.48S$38.36S$47.12

When you zero your account, you should place the balance elsewhere – possibly in something that gives a fuss-free 3.5% p.a. That reduces your overall loss to around S$12 or so per day.

Further mitigating the lost interest

To further reduce the interest loss, you can also consider topping up your UOB One preemptively to raise the average daily balance to S$100,000 as far as possible. Again, this is particularly relevant for higher amounts in your UOB One account. Balances between S$60,000 to S$75,000 has a high 4.85% p.a. rate and amounts between S$75,000 to S$100,000 get as much as 7.8% p.a. interest.

Assuming your balance so far from 1st to 3rd March is S$100,000, you can further top up another S$16,666.67 today (4th March 2024). This should work out to a S$100,000 average daily balance for March 2024 if you zero out your account on 28th March. Done correctly, this reduces the interest loss on your UOB One account to S$0.

You can use Excel to calculate the amount needed to achieve the desired average daily balance. I might be releasing a calculator so stay subscribed to get updates on this.

Here is what I’m doing

Note that this entire article and the steps below are merely based on my speculation and calculation. Follow at your own risk:

  1. Top up UOB One Account to S$116,666.67* on 4th March 2024 (use Excel to calculate exact amount required to get a S$100,000 average daily balance)
  2. Empty out account on 28th March 2024 before 10.30PM
  3. Wait for details of possible new promo on 1st April 2024 (stay subscribed for updates)

Alternate method for those who want to empty it out nearer to 31st March 2024:

  1. Top up UOB One Account to S$ 103703.71* on 4th March 2024 (use Excel to calculate exact amount required to get a S$100,000 average daily balance)
  2. Empty out account on 30th March 2024 early in the day
  3. Wait for details of possible new promo on 1st April 2024 (stay subscribed for updates)

*assumes S$100,000 balance from 1st to 3rd March and top up is done on 4th March 2024

Is this worth doing?

Over the past year, the rewards for a S$100,000 deposit locked up for 3.5 months has been around S$500 and this is of course on top of the usual 5% p.a. interest. You can tap here to see the cash rewards given for past promos. I would personally take the trouble to empty my account because any interest loss is more than offset by the promo rewards.

There is always the possibility of the promo being lousier than expected, working differently from what we think it would, or even not happening at all. You should hence do this at your own risk.

Conclusion

While there is no guarantee of the promo happening again, I think it is worthwhile to do some prep work in anticipation of the Q2 promo. Stay subscribed for more updates and great deals.

Thanks to: Trazora, Mouse Hunter, DT for contributing info

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1 thought on “UOB Earmark Promo: Prepping For a Possible Q2 Promo

  1. The terms for “UOB Big Savings Payout Promotion” now indicates:
    You are required to maintain the applicable minimum Incremental Fresh Fund (i.e. the aggregate of your
    Account’s Monthly Average Balance for March 2024 and the Participating Deposit amount) for the full
    Earmark Period

    So this approach is no longer practical?

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