For many Singaporean men, their National Service (NS) salary (well, allowance) is the first “real” paycheque they’ll ever receive. If you’re a current or soon-to-be NSF looking to start managing your finances, here’s a guide on what credit and debit cards you can apply for, as well as some of the best savings accounts to get you started.
- Debit vs credit cards — which should you get?
- Best debit and credit cards for NSFs
- Current vs savings accounts — which is more suitable?
- Best savings accounts for NSFs
Debit vs credit cards for NSFs
In terms of how you swipe and make transactions, there is no difference. As long as the retailer accepts Visa / Mastercard cards, it doesn’t matter if you use a debit or credit card. Instead, the main difference is this:
For credit cards, you borrow money from the bank to make purchases and are billed one lump sum at the end of the month. You’re spending the bank’s money, and paying them back later.
For debit cards, the money is deducted directly from your bank account, so you’re spending your own money. There are no bills to be paid, and it’s literally impossible to spend money you don’t have.
Should NSFs get a credit or debit card?
If you’re confident you can keep track of your expenses and pay your bills on time, then you can get either. If not, a debit card might be better.
Even with financially independent adults (who are “supposed” to know better), common credit card pitfalls include overspending and late bill payment, resulting in debt and expensive interest charges and fees.
Credit cards typically have more attractive benefits, but as you will see in the next section comparing all the cards NSFs are eligible for (under 21 years old, no income), the debit cards have better perks in this case.
Most entry-level credit cards require you to have at least $30,000 annual income; immediately striking NSFs off the list. The NSF “pay” is actually an allowance, so you can’t declare it as your salary. (It won’t meet the requirement anyway.)
In contrast, getting a debit card is much more straightforward: you just need to meet the age requirement (usually 16) and have an account with the bank (where the money will be debited from).
One thing to note though: because the funds are debited directly, if you get scammed with a fraudulent transaction on your debit card, it’s probably gone forever. For credit cards, you can still dispute with the bank and they can reverse the charge.
Best debit and credit cards for NSFs
Here’s a list of the best debit and credit cards for NSFs:
|Debit or credit card||Benefits||Things to note|
|SAFRA DBS debit card||2% cashback on contactless payment and 1% cashback on online shopping||No minimum spend for NSFs (for everyone else, it’s $400)|
|HomeTeamNS-PAssion-POSB debit card||Free PAssion membership, 2% cashback on contactless payment and 1% cashback on online shopping||No minimum spend for NSFs, must be from SPF or SCDF|
|DBS Visa debit card||3% cashback on contactless payment||Minimum spend $400; maximum cash withdrawal $400|
|POSB PAssion debit card||Free PAssion membership, 4% cashback at Cold Storage, Giant and Guardian||Minimum spend $400|
|Maybank eVibes credit card||1% cash back on everything||$500 credit limit|
|CIMB AWSM card||1% cashback on dining, entertainment, online shopping and telco bills||$500 credit limit|
If you read our review on debit cards in Singapore, you’d know that it’s kind of the industry standard for debit cards to have few or no perks. For most banks, the debit cards are pretty much just ATM cards for you to withdraw cash and NETS your purchases.
DBS/POSB is the exception — they have quite a few debit cards, and most of them are not bad.
SAFRA DBS debit card
In my opinion, the SAFRA DBS debit card is the best one. NSF cardholders can get 2% cashback on all contactless payments and 1% on online shopping with no minimum spend. For everyone else (non-NSFs), the minimum spend to enjoy these bonus cashback rates is actually $400.
HomeTeamNS-PAssion-POSB debit card
This multi-hyphenate card offers 2% cashback on all contactless payments and 1% on online shopping with no minimum spend too. You also get a free PAssion membership, which is neat. Not all NSFs are eligible though — you must have an existing HomeTeamNS membership (for those serving SPF or SCDF only).
DBS Visa debit card
The DBS Visa debit card is my next choice. Even though it offers a higher cash rebate of 3% on all contactless payment, there is a $400 minimum spend requirement and a maximum $400 cash withdrawal condition for you to enjoy those perks. I feel that as an NSF, you shouldn’t be encouraged to spend, which is why I prefer the SAFRA DBS debit card.
POSB PAssion debit card
POSB’s PAssion debit card is good for those who are interested in PAssion card membership. This card is basically a free 5-year membership – they used to charge cardholders for it (it’s $12), but it’s now “waived perpetually”. If you manage to spend $400, you will also get a 4% cashback at Giant, Cold Storage and Guardian. Most NSFs don’t do the groceries though, so this is really just a bonus.
Maybank eVibes credit card & CIMB AWSM credit card
For no-minimum-income credit cards, consider the Maybank eVibes credit card. There’s not much to it — you just get 1% cashback on all your purchases. It’s relatively “safe” as your credit spending is capped at $500.
The CIMB AWSM card (pronounced “awesome”) is similar to Maybank’s eVibes card in that you also get 1% cashback and the credit limit is $500.
However, the bonus rebate is limited to dining, entertainment, online shopping and telco bills, so if it’s between these two, you might as well go with Maybank.
Read also: 6 Best Student Credit Cards in Singapore
Current vs savings accounts for NSFs
Most people lump savings and current accounts together without actually knowing the difference. Don’t worry — it’s not complicated:
Savings accounts are for you to keep your savings and make day-to-day transactions. They offer a bit of interest for you to slowly grow your savings.
Current accounts are more for businesses. They don’t earn any interest, and are typically used for transactional purposes.
Should NSFs get a current or savings account?
For NSFs hoping to save their allowance (and well, most people in general), a savings account is more appropriate. If you sniff around, you’ll find many savings accounts boasting high interest rates of around 2%.
However, most of these require you meet several conditions to “unlock” the bonus interest. For example, the UOB One account offers 1.85% p.a., but you need to 1) spend $500 on a UOB credit card and 2) pay 3 bills via GIRO or credit at least $2,000 salary monthly.
Best savings accounts for NSFs
Naturally, NSFs can’t fulfil the above-mentioned criteria. With the limitations, there are 2 decent savings accounts NSFs can consider — the POSB Save As You Earn account and CIMB FastSaver account.
POSB Save As You Serve (and PAYE) account — 2% p.a.
Designed specifically for NSFs, this is the best savings account scheme for NSFs. Heck, if I qualified for it, I’d want to apply too. The POSB Save As You Serve (PAYS) is a programme that bundles the Pay As You Earn (PAYE) account to offer NSFs 2% p.a. interest.
How the POSB Save As You Serve programme works:
1. Link your DBS/POSB savings account to the POSB SAYE account (you can just sign up if you don’t already have one)
2. Choose a fixed amount to be transferred to the POSB SAYE account every month
3. Do not withdraw money from your POSB SAYE account (if you do, you will only earn 0.05% p.a.)
4. Enjoy 2% interest on the savings in your POSB SAYE account.
For the automated transfer of savings, you can start small and revise it as your NS allowance increases.
After you end your NS, you can continue enjoying the 2% p.a. interest for up to 24 months as long as you fulfil the savings criteria (i.e. you continue saving the fixed amount monthly).
CIMB FastSaver account — 1% p.a.
If you don’t like the idea of “locking up” your savings, you can consider the CIMB FastSaver account.
Aside from a $1,000 initial deposit requirement, you can do just about whatever you like with this account: There is no penalty for withdrawals and no monthly “forced savings”.
1% p.a. interest is nothing to shout about, but it’s a very no-frills account to have and sign up for. If you’re interested in this card, you can read our full review here: CIMB FastSaver Account – MoneySmart Review
Do you have any other debit cards, credit cards and savings accounts to recommend for our army boys? Tell us in the comments!