Describing the interest you earn from general savings accounts in Singapore as “pitiful” would be perhaps putting it a little mildly. That sad thought coupled with the ever-increasing cost of living that Singaporeans often complain about, naturally explains the flocking to the numerous new offerings from banks. With savings accounts that give you additional bonus interest for fulfilling certain criteria, the new norm is being established.
Having previously covered some of the major bank accounts that you can benefit from depositing your salary in to, or scrutinizing the head to head battle between OCBC and DBS, we left out one very unique account: The UOB ONE Account. Why? Well, it’s not that its uniqueness is a bad thing. What you’re about to find out is that its uniqueness makes gaining bonus interest one of the easiest in Singapore.
How to make your money work for you
At first glance, $50,000 may seem like a lot of money to some Singaporeans. But say you have $50,000 and no idea what to do with it but you do know you want to grow that money. If you’re like me, you don’t want to take major financial risks, so you put it in a good, reliable savings bank in Singapore with the best fixed deposit account.
After a long year, you check your statement and see that your money has earned you… a grand total of $750 or 1.50%. Not bad, you tell yourself. But was a fixed deposit account the best choice?
The UOB One Account could earn you up to $500 more for doing things you would normally do with your bank account anyway. But with the spotlight heavily focused on the OCBC 360 account now, how does this account differ in its mechanics and what makes it so unique?
How does the UOB One Account work, exactly?
There are two main factors determining the interest rate of your UOB One Account, the balance in your account and the actions you take.
The balance in my account determines my interest rate?
That’s right. UOB really loves its tiers – those with the UOB One Credit Card would know what I mean. Here’s how the interest rates in the UOB One Account work:
|Account Balance in your UOB One Account||Spend S$500 on your UOB One Card and/or UOB Direct Visa Debit Card||Spend S$500 on your UOB One Card and/or UOB Direct Visa Debit Card AND Credit your salary (min. S$2,000) OR Pay 3 bills monthly via GIRO|
|First $10,000||1% p.a.||1.5% p.a.|
|Next $20,000||1.5% p.a.||2% p.a.|
|Next $20,000||2% p.a.||3.33% p.a.|
|Above $50,000||0.05% p.a.||0.05% p.a.|
Now, don’t get too excited about the 3.33% p.a. interest rate. It doesn’t mean that if you put in $50,000 you will get 3.33% interest on the entire $50,000. Instead, what it means is the first $10,000 will earn 1.5% (or $150), the next $20,000 will earn 2% (or $400) and the next $20,000 will earn 3.33% (or $666). So, to be more accurate, you should look at the “average interest rate” for the entire amount.
Say you only have $10,000 or less in your UOB One Account, you earn a maximum interest of 1.50% per year.
If you have between $10,001 and $30,000 in your UOB One Account, you earn interest up to a maximum of 1.83% per year.
If you have between $30,001 and $50,000 in your UOB One Account, you earn interest up to a maximum of 2.43% per year.
Okay, so what about the actions I have to take?
There are three actions which help you to earn higher interest rates.
- Credit/Debit Card Expenditure of at least $500 each month
- Credit your monthly salary of at least $2,000 into the UOB One Account
- Pay at least 3 bills each month via GIRO
You must do at least the first action – credit/debit card expenditure – if you want to enjoy interest rates of up to 1.6%. To get even higher interest rates of up to 2.4%, you will need to do either the second or third action. It’s that simple.
Wait a minute, though, that sounds like a lot of work.
Let’s go through each action to see just how straightforward it is:
Credit/Debit Card Expenditure of $500
With the UOB One Card, you actually get cashback rebates. To earn these rebates, you will need to spend a minimum amount of $500 over at least 3 transactions each month for three months. You will then earn at least $50 in cashback rebates or 3.33% cashback. To maximize the cash rebates you earn, you need to spend $2,000 a month to earn the maximum tier of 5%.
Since you should be spending at least $500 to enjoy the higher interest rates of the UOB ONE Account, you will definitely be looking forward to $200 in credit card cashback each year.
If you don’t have the UOB One Card, you can also spend the $500 using your UOB Direct Visa Debit Card. Of course, you won’t be enjoying any cashback returns if you do so.
However, the UOB One card is celebrating its 10-year anniversary, so you save even more now. On top of the 5% rebates you can earn, they are also offering 10% in rebates on mobile payments. This is no small offering, with participating merchants such as FairPrice, SPC, McDonald’s, Uniqlo and Din Tai Fung just to name a few. Here’s what you need to do to qualify:
- Register via SMS (use icon)
- SMS 10<space>NRIC to 77862. Limited to the first 10,000 Principal Cardmemembers.
- Digitise your UOB One Card on your phone (use icon)
- Click here on how to digitalise your card.
- Tap and get rewarded (use icon)
- Tap and pay with your phone on any contactless terminals islandwide from 10 August to 31 October 2017.
On top of this, you will get a $100 cash credit ($80 cash credit for One Card and $20 for One Account) if you apply now.
If you are interested in the UOB One Card, you can apply here.
Credit salary of at least $2,000 each month into the UOB One Account
If you are eligible for a credit card, this requirement should not be a problem for you. Just ensure that your monthly income is going into the UOB One Account and enjoy the higher interest rates if you already met the above card expenditure requirement.
Pay at least 3 bills each month via GIRO
Do you pay for utilities? What about your phone bill? What about insurance premiums, or town council payments, or any other monthly bill? You’re actually making your life easier by automating these bill payments via GIRO. The fact that you get to enjoy the UOB One Account’s higher interest rates as well is icing on the cake. Of course, you must have already met the above card expenditure requirement.
But wait… how does this make the UOB One Account better than the competition?
We know that there are several other banks in the market that have products similar to the UOB One Account. However, here are two ways in which the UOB One Account is better.
1. No credit card? No problem.
You don’t need a credit card to enjoy the higher interest rates! Unlike most of the other banks, the UOB One Account looks at your expenditure on either your UOB One Card or your UOB Direct Visa Debit Card. If you have both cards, you can even combine the expenditure to meet the $500 minimum spending requirement each month.
So if you don’t earn enough in a year to apply for a credit card, the UOB One Account still gives you a chance to enjoy higher interest rates as long as your expenditure is on the UOB Direct Visa Debit Card. But what if you earn less than $2,000 a month?
2. No salary? No problem.
Secondly, you only need to do two actions to enjoy these higher interest rates of up to 2.4% per year. Say you’ve already gone through the trouble of arranging for your salary to be credited into another bank’s account. Keep it there! Or maybe you aren’t even earning more than $2,000 each month. No worries. You can still enjoy the maximum interest rates on the UOB One Account by just setting up 3 GIRO payments.
One thing we have to remind you though…
While the UOB One Account is clearly the most accessible and easiest way to earn high interest rates in Singapore today, it also depends on how much money you’re willing to set aside in the account. To be able earn the maximum of 2.43% per year, you HAVE to put $50,000 in your UOB One Account. No more, no less.
Still, you have to admit, it’s the easiest $1,216 you’ve ever earned. That’s got to make you better at life.
Now, the UOB One Account is also the easiest way to invest in Singapore
Thanks to the UOB Young Professionals Solution, you can now channel your interest earned from the UOB One Account into investing in unit trusts. What’s more, you can also invest the cashback rebates from UOB Credit Cards.
With the optional Sweep feature of the Young Professionals Solution, you can buy unit trusts with your earned interest and cashback rebates and enjoy zero sales charge for your monthly investment. The usual sales charge is 2% per transaction, which can really eat into your earnings over time, so this is a big benefit.
Sweep only allows you to invest in one unit trust fund – the United SGD Fund, a low to medium risk investment product by UOB. And because it’s optional, you can choose to join or leave and stop channelling your accumulated interest to the unit trust fund anytime.
Will you be switching to the UOB One Account? We want to hear from you.
This article was brought to you in collaboration with UOB.