People have been talking about the UOB One Account and some readers asked me what I think of it. I said that I would like to see what the revamped OCBC 360 Account is going to look like and make a comparison.

Now, first, we look at the UOB One Account. At its simplest:

1. Start an account.

2. Get a UOB ONE VISA card.

3. Charge $500 a month to this card.

4. Maintain $50,000 in the account.

5. Get an effective interest rate of 1.6% per annum.

Now, if we were to credit our salary monthly or make 3 GIRO debit transactions per month, all else remaining equal, we will get an effective interest rate of 2.43%.

What I don't like about the UOB One Account is that the interest rates are tiered in the first $50,000. So, we really have to maintain $50,000 in the account to get the highest effective interest rate possible. If someone should maintain $30,000 and charge $500 to the UOB ONE VISA card, then, the applicable interest rate on his deposit would be 1.33%, not 1.6%, for example.

If we were to compare this with the old OCBC 360, this isn't really attractive because it was really quite easy to get 3.05% interest from OCBC 360 with their old requirements of:

1. Monthly crediting of salary.

2. Charge $400 to any OCBC Credit Card per month.

3. 3 online payments per month with the 360 account.

What about the revamped OCBC 360 account?

People who credit their salaries on a monthly basis will now be rewarded with an additional 1.2% interest for up to the first $60,000 in the account! Bonus interest is up from 1% to 1.2%. Total balance which will receive bonus interest is up from $50,000 to $60,000. Good stuff!

So, without having to do anything else, the interest rate on the first $60,000 is now 1.25%.

Then, just pay 3 bills online (yes, it doesn't have to be GIRO like UOB's requirement) and a bonus interest of 0.5% will apply. If we charge $500 (up from $400) to an OCBC credit card monthly, get another 0.5%. So, effectively, get an interest rate of 2.25% on the first $60,000.

What about the 1% bonus interest for 12 months if we were to buy an insurance or investment product from OCBC? Er, regular readers would have the answer to this one. I won't bother with this "bonus".

For disciplined savers, OCBC 360 is going to be more rewarding too because they will pay 1% per annum bonus interest on monthly incremental balances (not the entire balance in the savings account).

Since both UOB One Account and the new OCBC 360 Account will pay us bonus interest for crediting our salary monthly, unless we have 2 salaries (each exceeding $2,000) every month, we will be wondering which product is better for us.

So, how?

Ask the following questions:

1. How much do I charge to my credit cards monthly?

2. How much do I have in my savings account?

If we hardly spend any money using credit cards, the OCBC 360 Account will pay 1.25% for the first $60,000 if we simply credit our salaries monthly to the account. Paying 3 bills online is a really easy requirement to meet too. So, we will get 1.75%. With the UOB One Account, we will get nothing unless you consider 0.05% to be something.

If we charge at least $500 a month to a credit card, then, with the OCBC 360 Account, on top of what have been considered in the previous paragraph, we will get 2.25% for the first $60,000 deposited. With the UOB One Account, we will get 2.43% for the first $50,000 deposited.

In terms of interest rate, therefore, UOB trumps OCBC by 0.18%. However, remember that OCBC will pay bonus interest on the first $60,000 (i.e. 2.25% = $1,350 a year) while UOB will pay bonus interest only on the first $50,000 (i.e. 2.43% = $1,215 a year). Anything more will get an interest rate of only 0.05%.

So, if we have $50,000 in savings, go with UOB. If we have $60,000, go with OCBC.

What if we have less than $50,000? If we have less than $50,000, then, UOB's effective interest rate starts falling. Remember, UOB's bonus interest rates are tiered.

So, if we have $40,000, for example, and if we meet all the requirements discussed in the prior paragraphs, then, the effective interest rate from UOB is not going to be 2.43%. It is going to be 2.2%.

So, if we have $40,000 or less in savings, then, the OCBC 360 Account is a more rewarding choice than the UOB One Account, all else remaining equal.

I did this blog post because the question of how to choose one product or the other is a pertinent one as most of us have only one salary to credit monthly.

For those who do not have a salary to credit monthly and do not spend at least $500 a month (which could be charged to a credit card), then, the best choice could be CIMB's 0.8% interest rate for a regular savings account.

*UPDATE (9 NOVEMBER 2016):*

*I have been too lazy to blog about the*

**Bank of China SmartSaver**which I also have. This is another product which makes people jump through hoops to get more interest income on the first $60,000 of savings.

*Those hoops have just become a little harder to jump through:*

Click to enlarge. |

*The changes to*

To find out more aboutwebsite.

**Bank of China SmartSaver**will benefit higher income customers and bigger spenders. So, it might be good news for some people.To find out more about

**Bank of China SmartSaver**, go to their-----------------------------

**OCBC 360 UPDATED AGAIN:**

See: OCBC 360 updated (and downgraded) again.

(1 March 2017)

Related posts:

Getting paid more while waiting for opportunities.

## 19 comments:

Or if you have more than $60k, can consider moving the credit card spending to UOB one where minimum interest is 1% vs 0.5% in OCBC. Moving bill payment across to UOB may further enrich the interest.

Not forgetting UOB One CC will get $120 a year on rebate based on $500 spend each month, no categories.

Bit of effort, but no free lunch yah.

Hi Wei Jian,

Thanks for fleshing out the blog post. Much appreciated. :)

More loops and hoops to go through to get a bit more from the banks. -.-"

Any idea if we charge $500 to ocbc card and pay the bill with uob card? Would that fulfill on both side?

I think the best choice is Standard Chartered. Less than $50K is 1.25% better than CIMB.

Hi AK,

I'm new to the workforce and just wanted to thank you for all the insightful posts and comments you share on your blog.

Just wanted to point out that the insurance/investment requirement is also applicable to their Term Insurance. But the minimum premium amount for qualifying is $2K annual.

I'm actually looking for a term insurance after reading your views on the matter. But I do not think I need such a high policy at this time.

Hi Zax,

I think your strategy isn't allowed in Singapore. We cannot use a credit card to pay another credit card's bill here. ;p

Hi Ruby,

You are referring to SCB E-savers? I think that is a short term (2 months?) bonus rate for incremental balances only, if I am not mistaken. It is similar to the bonus 1% per annum that the new OCBC 360 will pay on incremental balances for a month.

It would be nice if we could have 1% or 1.25% as the regular rate now. :)

Hi Adrian,

First time commenting? Welcome to my blog. :)

Wow! A $2K premium on a term policy? You will be insured for millions! -.-"

It is obvious that they need to make enough money on a product in order to give you that 1% bonus interest. ;p

I'm sticking to OCBC 360 for the moment. Do note that OCBC 365 credit card gives additional rebates for groceries, teleco bill and dining. These can form the $500 minimum spend requirement.

Yes, I am referring to E$saver. Although it is a 2 mth term based on incremental increase, you can still benefit from it if you know how.;) So far, the bank has been promoting these for quite some times.

To me, this is rather useful parking facility, if you have in mind to buy shares later using their on-line trading account.

Thanks for cutting through all the details like knife through butter. I was halfway analysing the merits of both accounts when I was hit with analysis paralysis. Then I also recalled the hoops I had to jump through with my company's HR last year (to credit my salary to OCBC 360 from my UOB Current Account) and that was when I decided I would just stick with OCBC 360.

I will be sticking with OCBC360 because I am an OCBC shareholder =) If I can, I use the products/services of the companies that I am vested in.

The starting point of an investing journey is when we list where our money is going to. After that, we ask the few questions on that business.

Hello,

I tried mocking up the interest rate calculation on excel. The difference is not very significant, and the obvious choice would be OCBC for simplicity for amounts below $40,000. At $40,000, both UOB (2.21%) and OCBC (2.20%) are roughly equal.

Ideally, one should credit salary to OCBC, pay 3 bills through OCBC, spend $500 through UOB one card, and giro 3 transactions through UOB. This gives 2.43% at UOB and 1.7% at OCBC.

Assuming the above, with savings above >$40,000, it is worthwhile allocating more to UOB.

Sticking with OCBC... If the credit card linked with the account is a frank card, you can get 6% rebate for online purchases (up to S$1000). That's is another free $60 per month which adds up to $720 per year. Not everyone do so much online purchase though but just something to take note in case you can achieved that. I myself buy over S$1000 every month(due to work requirement) on air tickets online so to me, it is good money.

Not to mentioned I own OCBC shares too... So huat ah :)

P.S. remember to opt for scrip dividend. Its too good up pass up for the discount they are offering ;p

Hi AK,

Sorry for disturbing you at this hour. So your reviews on OCBC 360 vs UOB One and I thought it was really in depth. But what about OCBC Frank account? Seems quite good with an interest rate of 0.2% below $10,000. Thanks.

Look forward to hearing from you soon!

Best Regards,

J

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Hi J,

0.2% is really low. You might want to consider the SCB Dash account for less than $10,000 in savings deposit. 0.5%.

;)

Best wishes,

AK

Hi AK. I am new to your blog.

I came across one post that say DBS or SCB provides the best rates for syockmarket trading, but now cannot find it. Can you irect me to it.

Thanks

Napster

Hi Napster,

I don't think I ever had such a blog post. I don't have a trading account with either DBS or SCB.

Hi AK,

I think this is one of the ways how the rich is getting richer and the poor is getting poorer. I've even heard of wealthy retirees ability to get 2% FD because of their super high networth. Banks are customer-service based businesses like telcos, once they hook you in for that short period of 1-2 yrs, they start to make it less attractive to the consumers.

Hi Scopion,

Banks are only friends to those with money. Poor people will have a hard time trying to get a loan from the banks because banks will only lend money to people with money. ;p

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