It’s pretty complicated to be a young person today. You’re told to do what you love and love what you do. But you’re also told that if you don’t earn big bucks, Singapore’s high cost of living will tear you down. Nothing drives this home more than savings accounts in Singapore. Most accounts require you to have a high account balance before you can earn any significant interest.
But accumulating balances of S$30,000 or more is just not possible when you’re fresh out of school, starting your career. That’s probably not even what you can earn in a year! Well, take heart. The new DBS Multiplier account is all that you need once you get your first paycheck.
What’s new about the DBS Multiplier Account?
In 2017, the enhanced DBS Multiplier Account allows you to earn up to 3.50% interest, up from 2.68% previously. But that’s not even the best part – with the DBS Multiplier Account you can earn at least 1.55%, just by transacting as little as S$2,000 a month. This is a huge leap compared to the previous 1.08% interest rate that you had to transact as much as S$7,500 a month just to earn.
Here are the new DBS Multiplier Account tiers, still based on transaction amounts:
|Total Eligible Transactions per month||Salary Credit + Transactions in 1 category||Salary Credit + Transactions in 2 or more categories|
|<S$2,000||0.05% p.a.||0.05% p.a.|
|S$2,000 to <S$2,500||1.55% p.a.||1.80% p.a.|
|S$2,500 to <S$5,000||1.85% p.a.||2.00% p.a.|
|S$5,000 to <S$15,000||1.90% p.a.||2.20% p.a.|
|S$15,000 to <S$30,000||2.00% p.a.||2.30% p.a.|
|S$30,000 and above||2.08% p.a.||3.50% p.a.|
When it was first introduced in 2014, the DBS Multiplier Account was one of the first savings accounts to reward you with higher interest rates the more transactions you made. In addition to salary crediting, the other transaction categories were credit card spend, home loan repayment, insurance and investments.
All that hasn’t changed. What’s been enhanced is how the DBS Multiplier Account is now much more suitable for young adults as well.
Let’s just put it in perspective – say you earn S$2,700 a month as a fresh grad. That means, regardless of how much you spend on your DBS credit cards, you could already stand to earn 1.85% p.a. in interest. Say you have at least S$3,000 in your DBS Multiplier Account – that’s at least S$54.74 you can earn in interest a year. If you had S$5,000 in your account? Your interest for that year jumps up to almost S$100!
But you’re not going to be earning only S$2,700 a month all your life…
The other good thing about the DBS Multiplier Account is that it now “grows” with you, instead of being something that you should only apply for later in life.
Earned enough to start investing? Make a monthly contribution for your Unit Trust Regular Savings Plan and/or POSB Invest-Saver and earn at least 0.15% more interest on your account balance!
Ready to start that next chapter of life with a home loan? Pick one of DBS’ very competitive home loan rates and possibly reach the next tier of transaction amounts.
Here’s a simple illustration of what I mean:
Sabrina earns S$3,500 a month as an executive. She spends S$1,200 a month on her credit cards. Currently, she only qualifies for an interest rate of 1.85% in her DBS Multiplier Account. That’s not bad, honestly.
But say she takes up a DBS home loan, and pays another S$1,000 in monthly repayments. She now earns interest at a rate of 2.20% per year!
But what about those who don’t earn that much?
This is where the DBS Multiplier Account truly shines. There’s no minimum salary amount to credit, no minimum credit card spend. In fact, there’s no minimum amount for any category.
As long as your employer credits your salary by GIRO, you’re on the way to earn the bonus interest.
Say you’re an undergraduate earning S$1,800 a month from your part-time job. In the past, this meant you wouldn’t qualify for the bonus interest not just for the DBS Multiplier Account, but for any of the other similar savings accounts offered by other banks.
With the new, enhanced DBS Multiplier Account, all you need to do is spend S$200 on your DBS or POSB student credit card, and you’ll qualify for 1.55% per year in interest.
Just like that. It’s easy to remember – your transactions just need to add up to at least S$2,000 each month.
Wait, so what’s the catch?
The main catch, if you can even call it that, is that the bonus interest only applies to the first S$50,000 in your account balance. This is relatively low compared to similar savings accounts offered by other banks. But let’s be honest here – most young working adults barely have more than S$20,000 in their savings account. A lower account balance cap really isn’t relevant to this group of people.
On the other end of the spectrum, the other catch may be the relatively high minimum balance of S$3,000, and the monthly fall-below fee of S$5 if you don’t meet that requirement. This might be a turn off to those who live paycheck to paycheck, but let’s put it in perspective – if you can barely manage to save S$3,000 in your savings account, then getting a high interest rate is the least of your priorities.
Is the enhanced DBS Multiplier Account the best savings account in Singapore?
Honestly, if you go by interest rate alone, the answer is no. You can probably get a higher interest rate elsewhere if you’re willing to jump through enough hoops.
But there’s more to choosing a savings account than just interest rate. You need to consider just how many ATMs the bank has in its network. You need to consider how convenient their bank branches are. And in this increasingly mobile age, you need to consider how user-friendly the bank’s app is.
When you take all these factors into consideration, it’s hard to deny that the DBS Multiplier Account is definitely an option, especially for young adults. Our life is complicated enough. There’s no reason our savings account needs to be as well.
Interested in the new DBS Multiplier Account? Apply here.
This article is brought to you in collaboration with DBS.