“My savings account suck, What are the better options”
This article was written for the typical working adult with a few years in the workforce and now looking to re-consider if he/she is on the correct savings accounts.
A Typical Working Adult Scenario
- Earn more than $2k, credited salary to account
- Spend a min. $600 a month on a credit card (for paying bills and daily expenses e.g F&B, Online)
- Account balance varies accordingly from 10k to 80k (we will elaborate more in the chart below)
- Not paying for home via bank loan (relying on CPF payments)
For completeness sake, we are going to compare the 4 main popular savings accounts in Singapore which are commonly applied based on the salary and spending above. We are NOT comparing the promotional deals for accounts that are usually for a shorter term.
Editor’s note: We do not get any commissions from any of these recommendations.You will start to realize also that very often, the best products do not give any perks (thus consumers discover them via blog posts like this rather than comparison sites) Updated to September 2017
The 4 Combinations: OCBC vs UOB vs BOC vs DBS
We compare across all these players and find that there is a consistent trend to them – They usually come with added interest % if you spend using their cards, hence we detail the following 4 combinations:
|1||OCBC360 Account||OCBC365 Card|
|2||UOBONE Account||UOBONE Card|
|3||BOC Smart Saver||BOC Family Card|
|4||DBS Multiplier Account||DBS VISA Debit Card|
For DBS, they do not have an account that is targeted towards existing working adults with savings already but is more focused on first-time working adults below age 30 (BYOB account). Therefore, for the sake of this comparison, we decided to omit it, also due to the nature of complicated interest % crediting to only certain accounts and for them to further complicate it with PayLah! as well. You can refer to InvestmentMoats for a more detailed breakdown where he runs you through the numbers.
Also, we compared the DBS Multiplier here to show how it really pales in comparison to the other saving accounts when you do not have more than $7500 transactions in a month (debit and credit). Most often, it is best to get the DBS Multiplier if you have a DBS Home loan to pay down.
Potential Yearly Interest + Card Rebate
Recommended Strategy – Consider BOC (Smart Saver + Family Card)
- Most likely you would have graduated or started working with a DBS or POSB savings account from when you were a child
- We feel that it is not wise to keep your savings in that account as you would not be spending over $7.5k a month for home loans, card spending etc.
- Thus, the best option would be BOC Smart Saver and Family Card where you get the most effective yearly interest in a short amount of time
Limitations of the BOC Combination
- Not a very modern online and mobile banking interface
- Few other value-added services (e.g investment brokerages, insurance)
- Fewer retail outlets and cash withdrawal point etc.
Hence, some users may still choose to start and stick with the OCBC360 or UOBONE accounts as the difference in interest amounts do not differ significantly for the lower balance amounts. (from $10k to $30k)
TL;DR: Presenting The Winners
|Category||Winner||Realistic Interest (p.a)||Reason|
|Best for Below $10k||OCBC360/DBS||1.5%||Stick to Debit cards and Rebates and save more money|
|Best for $10k to $30k||BOC Smart Saver||1.9%||Clean and easy to understand|
|Best for $40k to $60k||BOC Smart Saver||~2.5%||The interest are layered into tiers hence the more savings you have, the more interest you get|
|Best for beyond $70k||BOC Smart Saver||~3%||There is additional bonus interest that kicks in which brings the interest % higher|
|Best for fresh graduates (starting with zero)||DBS BYOB||~3%||Do note that there are many other conditions associated with this and you are not able to withdraw from the SAYE account for 2 years (which gets the higher interest tier)|
Important things to note:
- Take note that the above chart heavily depends on the monthly spending on the relevant card (Rebates) We detail more for cashback cards here.
- If you are spending with different cards for miles etc, numbers will definitely be affected.
- Regarding Salary GIRO credit, do check with your HR manager in your company whether it is under the transaction code: SALARY
- Fun fact: There is no free lunch in the world, the banks are competing for our business to get more data on your salary and spending numbers to potentially up-sell you and hope you buy other banking products in the future (eg. loans, mortgages etc.)
In addition, if you are keen to ask questions or discuss more on savings accounts and card deals, please do join our open Facebook Group where you can learn from fellow folks residing in Singapore who are all learning together.
An Example: Calculation of Interest at $20K balance
You can see below in this screenshot where I have calculated all the respective interest rates with an example of a $20k bank balance. The important numbers are highlighted in Yellow.
Further reading – Detailed Information
1) Bank Of China
4) DBS/POSB Multiplier
5) DBS BYOB (Be-Your-Own-Boss)