Here in Singapore, we take pride in being a country built on meritocracy. Now, whether you actually agree that we are a meritocratic society or not, the fact is that, in an ideal situation, you should be rewarded based on nothing but the amount of effort you put in. This analogy might seem like a bit of stretch when it comes to banking products, but the POSB Cashback Bonus is here to do just that.
Currently, if you wanted to earn money from your banking transactions, “multiplier” savings accounts in Singapore, such as the aptly named DBS Multiplier Programme, earn you interest when you fulfil certain transactional criteria. You do get rewarded for banking transactions you might be already doing but ultimately, how much you earn is based on your account balance. POSB is hoping to change all that, with the POSB Cashback Bonus.
Cashback Bonus? As in… not interest based?
That’s right, instead of earning interest from your savings account based on how much money you’ve accumulated, POSB wants you to earn cashback from your banking transactions. We’ll talk more about this later, but the most obvious benefit of this is that it doesn’t matter how much you have in your bank account.
But what’s even better? You earn cashback on the banking transactions that you are already doing. Yes, you heard us correctly.
What banking transactions are eligible for POSB’s Cashback Bonus?
There are a total of 5 banking transactions that can earn Cashback Bonus. Salary Crediting, Credit Card Spend, Home Loan Instalments, Insurance Premiums and Investments. Let’s look at each of them in a bit of detail:
1. Salary Crediting
This works pretty much like the DBS Multiplier Account and other similar bank accounts. The difference is that with the Cashback Bonus Programme, you earn 0.3% cashback of your salary credited to any POSB or DBS savings or current account. Even salary credited into joint accounts are eligible. That means, if you earn $3,000, you stand to gain $9 a month in cashback.
To qualify, your credited salary needs to be at least $2,500 and the total cashback you can earn from your salary is $20 a month.
2. Credit Card Spend
One thing I’ve always loved about the POSB Everyday Card is that I earn cashback on every transaction I do. The one thing I’ve never liked? That it was only 0.3%. With the Cashback Bonus Programme, I not only effectively double that cashback rate, I also earn cashback on every transaction I make on every DBS and POSB credit card. The Cashback Bonus Programme gives you 0.3% cashback on your credit card spend on eligible transactions, with no minimum spend required.
That means if you spend about $2,000 on your DBS and POSB credit cards, you stand to earn $6 a month in cashback. The maximum cashback you can earn from credit cards is $20 a month.
3. Home Loan Repayment
This is where it gets interesting. To date, the DBS Multiplier Account has been the only savings account to reward you for taking a home loan with DBS and POSB. Now, with the Cashback Bonus Programme, there’s another reason. And a pretty good one at that.
You can earn 3% of your monthly repayment as cashback each month, up to a maximum of $30 cashback. That means as long as your home loan monthly instalment is at least $1,000, you can expect to see $30 more in your savings account each month.
4. Insurance Premiums
Who wouldn’t want a discount on their insurance premiums?
With the Cashback Bonus Programme, you get 3% of your premium as cashback, up to a maximum of $30 each month. The only catch is that you will have to purchase the insurance product through DBS/POSB after signing up for the Programme. Products purchased before signing up will not be eligible.
If there’s one thing that holds your investments back from growing faster than they are now, it’s because you have to pay an admin fee every time you make an investment transaction. Eligible investments include lump sum unit trust investments or unit trust regular savings plans, and the POSB Invest-Saver programme.
Well, now with the Cashback Bonus Programme, you can earn 3% of your investment transaction amount as cashback each month, up to a maximum of $30. At 3%, that means you’ll not only get back your fee (For POSB Invest-Saver, for example, it’s from 0.5% to 1%), but more on top of that.
So if you invest $500 each month, you can expect to see $15 in cashback each month.
This all sounds really good! So… what’s the catch?
I’m not sure if you’re going to consider this a catch but, you have to make at least 3 of the 5 transactions each month to be eligible.
But here’s why it doesn’t seem like a catch to me. If you’re like majority of the population, you already have a DBS/POSB account that your company is already crediting your salary into. Sure, some of you may have switched your salary crediting to another bank to take advantage of the interest rates there, but I suspect most of us haven’t done so. That’s one transaction taken care of.
When it comes to credit card spend, the POSB Everyday Card is one of the most versatile cards out there for earning cashback. You may not have considered it before, but with the opportunity to earn another 0.3% in cashback, it could give you reason to use your credit cards more often. That’s the second transaction taken care of.
As for the third, it could either be your home loan repayment, since DBS has some of the most competitive home loan interest rates at the moment. It could also be your investment transactions, since the POSB Invest-Saver has one of the most competitive fees if you’re investing $500 or less each month.
The total monthly cashback you can earn each month for all 5 categories is $130 a month. That’s $1,560 a year.
Hmmm… come to think of it, these 5 categories are the same as the DBS Multiplier Account!
Good observation! And as you’ve probably guessed, you can’t earn from both. You can only have either the POSB Cashback Bonus Programme or the DBS Multiplier account. How you should be deciding is based on which earns you more.
Since the DBS Multiplier Account gives you a maximum annual interest rate of 2.68%, you would need to have an account balance of $50,000 and total monthly transactions amounting to $7,500 or more before the Multiplier Account can earn more than the POSB Cashback Bonus Programme. So if you don’t have that much permanently set aside in your account, then you should definitely consider applying for the POSB Cashback Bonus Programme.
Are you interested in the POSB Cashback Bonus Programme? You can sign up here.
This article is brought to you in collaboration with DBS Bank.