For many young working Singaporeans, starting work and managing their own cash flow can be a daunting task. Add to that the pressure of planning for the future and making sure they grow their money, and it’s not surprising to hear of many people with the perception that investing is a huge hassle and thus not even starting.
You might be accustomed to earning cash rebates from your credit card expenditure, or interest from your savings accounts, but what if you could use that as a springboard to start investing as well?
Last month, UOB launched the UOB Young Professionals Solution, which brings two of their flagship products together while adding an exciting new feature, making it a powerful combination for anyone starting on their investment journey. And yes, while it is called the Young Professionals Solution, it really doesn’t matter how old you are, because there’s never a bad time to start investing, which is precisely what this solution aims to help you do.
Which two flagship products from UOB are involved?
The UOB Young Professionals Solution consists of two complementary banking products – the UOB YOLO credit card and the UOB One Account.
The UOB YOLO credit card earns you cashback on all your dining and entertainment spend, local and overseas. You currently earn 8% rebates on weekends, and 3% on weekdays. You also earn 3% cash rebate on online fashion and travel spend on weekdays. And all you need to do to be eligible for these cash rebates is charge at least $600 to the card each month. The YOLO card also entitles you to several other privileges including exclusive 1-for-1 deals and discounts at dining and entertainment establishments.
The UOB One Account is a chequing account that gives you higher interest rates if you spend $500 on your YOLO credit card every month and either credit your salary to the UOB One Account or pay 3 bills each month via GIRO. Assuming you have $50,000 deposited into your UOB One account and meet these simple requirements, you could earn up to $1,216 a year in interest.
Can you see just how well they work together? But just in case it’s not obvious – the higher interest rates of the UOB One Account are easily achieved because you’ll already be spending at least $600 on your YOLO card each month.
So, what’s this exciting new feature about?
Okay, stop and think for a moment – what do you normally do with your bank account’s interest accumulated every month and every year? And what do you do with the cash rebates you earn on your credit cards? For many people, they might chalk it up to their total savings that they earn, and nothing more, because they might feel it’s not a high enough amount to do anything else with it.
UOB’s Young Professionals Solution literally solves the question of what to do with that higher interest and cash rebatess you’ve been earning with a new feature called Sweep. Sweep accumulates your earned account interests and card rebate to invest in a unit trust fund.
Come on now, just how much can I really earn in interest and rebates each month to invest?
Well, you’d be surprised! Assuming you spend as little as $150 each weekend on dining and entertainment for a total spend of $600 each month. With an 8% cash rebate, that’s $48 you’ve earned just like that. And this doesn’t even include all your weekday dining and entertainment, or online fashion and online travel transactions which earn you 3% cash rebate.
And as we pointed out earlier, holding $50,000 in your UOB One Account can net you about $101 each month in interest, assuming you meet the two simple requirements of credit card spend and either salary credit or pay 3 bills by GIRO.
That’s close to $150 you’re earning already each month and potentially much more based on your spending ability, and thanks to Sweep, it’s all going into a unit trust fund.
Wait, is that it? How is this different from just opening a regular unit trust account?
Firstly, there is no sales charge for your monthly investment. Usually it would cost 2% per transaction, which can really eat into your earnings over time. Secondly, the minimum initial amount of $1,000 for a typical unit trust investment doesn’t apply. Sweep invests your accumulated earnings if they exceed just $10.
That said, there are two other things you should know: Sweep only allows you to invest in one unit trust fund – the United SGD Fund, a low to medium risk investment product by UOB. Also, Sweep is optional – you can choose to join or leave and stop channelling your accumulated interest and rebates to the unit trust fund anytime.
So regardless of how old you are, if you want to start investing but have always thought that it’s a huge hassle, the UOB Young Professionals Solution removes that hassle by doing it automatically for you while you enjoy earning rebates as you go about living the life you want.
Can you think of an easier way to start your investment journey? Share your thoughts with us.