DBS Multiplier Account: What Are the Changes in May 2020? Are They Beneficial for Me?
The DBS Multiplier Account has always been one of the most popular savings accounts around.
But with every new change announced, it may (or may not) be as attractive as before…
For those who aren’t kept in the loop, here are the changes to the DBS Multiplier account in 2020 which will take into effect from 1 May 2020 onwards.
Let’s take a look at the pros and cons!
TL;DR: Changes to DBS Multiplier From 1 May 2020
Revision of Interest Rates for DBS Multiplier Account
Effective 1 May 2020, there will be a revision of interest rate for the DBS Multiplier Account.
The reduction in interest will affect the first $25,000 savings for the Income + Transactions in one category.
|Income + transactions in 1 category
(for the first S$25,000)
|Total eligible transactions|
|Before 1 May 2020||From 1 May 2020||Changes In Interest Rate|
|Below $2,000||0.05% per annum||0.05% per annum||No Change|
|$2,000 to <$2,500||1.55% per annum||1.40% per annum||-0.15%|
|$2,500 to <$5,000||1.85% per annum||1.60% per annum||-0.15%|
|$5,000 to <$15,000||1.90% per annum||1.80% per annum||-0.10%|
|$15,000 to <$30,000||2.00% per annum||1.90% per annum||-0.10%|
|$30,000 and above||2.08% per annum||2.00% per annum||-0.08%|
What Does The “Income + Transactions in 1 Category” Mean for DBS Multiplier?
It means, you are salary/dividend crediting and doing one of the following with DBS:
- Spend using your credit card
- Bought an eligible insurance policy
- Invested in an eligible investment
- Got a home loan from DBS
Cons for May 2020 Update: How Does It Affect Current DBS Multiplier Account Holder?
While Singaporeans believe that this change is rather expected due to the falling interest rates all around the world, this change will definitely have an impact on current account holders.
Singaporeans are anticipating changes to the rest of the savings account too.
The latest DBS Multiplier change directly impacts account holders with less than $50,000 in their DBS Multiplier savings.
There is a drop in the interest rate of 0.08% to 0.15%, depending on your usage.
If you satisfy the minimum salary credit and 1 more category of transactions, the amount of interest you can earn is now lesser. (This applies to people with less than $50,000 in their bank.)
Assuming a DBS Multiplier Account holder with
- A total of $30,000 savings parked in his DBS Multiplier Account
- He gets $3,000 worth of salary credited monthly into his Multiplier Account
- His monthly spend on his credit card amount to $300
His overall eligible transaction will be $3,000 and $300, a total of $3,300.
He will be eligible for a 1.85% interest rate per annum on his first $25,000 in savings (the remaining $5,000 in his account will receive base interest rate.
From May 2020 onwards, this interest rate will drop to 1.60% per annum on his first $25,000 worth of savings.
The difference will be 0.25% per annum or $62.50 worth of interest.
This is the second change that was done to the DBS Multiplier Account since the start of 2020.
A Quick Recap: Changes to the DBS Multiplier Account on February 2020
This is the second time DBS Multiplier revised their terms and conditions to their savings account in a span of less than one year.
The previous change occurred with effect from 1 February 2020.
|Before 1 February 2020||From 1 February 2020|
|Salary Credit||Must be credited via GIRO, with transaction reference code |
'SAL or PAY'
|Will be renamed to income category instead, and will be made up of:
1) Salary Credit: Must be credited via GIRO, with transaction reference codes SAL or PAY.
2) Dividends: Must be credited via GIRO, fromCentral Depository Pte Ltd (CDP)
|Dividend Credit||Qualify under Investment Category||Will be qualified under Income Category instead|
|Balance cap for Salary Credit + transactions in 1 category||Higher interest is applied for balances up to S$50,000 only||Higher interest will be applied on balances up to $25,000 only.|
What does this mean to users?
- Dividends from stocks, bonds, SSB, or any other investment products will now be credited under the income category instead of the investment category. Do note that dividends from non-SGX listed counters are not recognised by DBS.
- This means that freelancers without a part-time/full-time job for salary credit can now direct their investments to their income category, potentially earning higher interest rates.
- Investments eligible for Multiplier Account include:
- Purchase of a unit trust via DBS/POSB
- Setting up a Regular Savings Plan via Invest-Saver
- Fully settled online ‘BUY’ equity trades.
- If you fulfil the salary credit + 1 category of transaction, interest is applied on only $25,000 instead of $50,000.
- If you satisfy 2 spending categories: salary credit + transactions in 2 categories, bonus interest is applied to $50,000.
Pros for February 2020 Update: Who Will Benefit From These Changes?
Good For Those Who Don’t Qualify For Salary Credit Previously
As mentioned above, freelancers and self-employed individuals who previously didn’t qualify for salary credit will now be able to earn bonus interest rate from the income category via crediting their dividends from investments into their DBS Multiplier account.
This works best if you have a consistent monthly dividend income.
Do note, however, that to qualify for higher interest rates, these transactions (crediting your dividends, etc. will have to amount to more than $2,000.)
Cons for February 2020 Update: Who Will Be Negatively Affected By These Changes?
Changes Are Bad For Those Who Transact Only In One Category
If you satisfy the minimum salary credit and one more category of transactions, the amount of interest you can earn is halved.
(This applies to people with $50k in their bank.)
This is not good if you have more than $25,000 in your Multiplier account, as the higher interest rate will only apply to the first $25,000.
Lower Interest Rates For Those Using Dividends To Fulfil the Investment Category
The investment category in the DBS Multiplier account used to be recognised for bonus interest in the past.
This is set to a limit- where you can only get bonus interest on your insurance/ investment dividends for 12 months before it is no longer considered a ‘multiplier action’.
Now with the new changes, dividends will not be accounted for in the investment category but are now considered under the ‘income category’.
So for working adults who already have a monthly salary credit, you will no longer be getting bonus interest for your dividend via DBS Multiplier.
For example, if you just satisfy the minimum salary credit, and the one category of transaction you’re banking on is dividends…
Your interest basically falls back to 0.05%.
Is It Still Worth Opening A DBS Multiplier Account?
With the changes in February 2020, the Multiplier account gives self-employed, freelance, and retired individuals a chance to earn a higher interest rate based on their passive income earned through dividends.
If you are in the latter category, then the DBS Multiplier account might be something that you can consider.
The change in May 2020 will reduce the amount of interest earned, but it is still reasonably high compared to someone who has yet to move on to a high interest-earning savings account.
As a fresh graduate who’s just started looking for the best savings account to park what little I have, it’s definitely harder for me to be able to meet the various requirements in order to qualify for the bonus interest rates.
Especially since I don’t have a DBS/POSB credit card to fulfil the one transaction category.
For those who are gunning for higher interest rates and want to find out how to maximise your earnings…
Be sure to check out our Seedly Community’s DBS Multiplier account reviews!