This Versus That

DBS vs OCBC: Which Bank Deserves Your Loyalty?

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Mark Cheng

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Complaining about the interest you get on your savings account is slightly akin to whining about COE prices – they’re not really going to get that much better. But now, two local banks have come up with schemes that aim to change your mind, and pledge allegiance to them as well. We take a look at these two multiplier schemes here:

With most people clearly aware now that savings accounts are going to do next to nothing to grow their money, it’s no wonder porcelain piggy banks are starting to get popular again on e-commerce sites. DBS and OCBC hope to change that impression of just how useless effective savings accounts are with their new schemes.

We take a head-to-head approach and compare the two accounts to see who comes out on top in this simple infographic:

dbs multiplier ocbc 360

 

 

Why Is The OCBC 360 Account Better?

We looked at 3 main factors when considering which account was better. These factors were:

  • Accessibility: How easy it is to hit the bonus interest rate
  • Interest Rate: In absolute terms, which bank offers a better interest rate
  • Peripheral Products: What financial products do these banks offer that encompass the savings program

One point to note is that the DBS Multiplier only pays the maximum interest rate for an account balance of up to $50,000. Anything above that earns the basic interest rate. The OCBC 360 Account pays the maximum interest rate for an account balance of up to $60,000.

 

Accesibility – Winner: OCBC

In terms of how easy it is to hit the bonus rate, OCBC just requires at least a monthly balance of $3,000, together with any of the following 4 activities to qualify for the bonus interest rate. Put your salary in, make some investments, GIRO your insurance and pay your phone and other credit card bills, and spend $500 on your credit card, and you’re good to go. DBS on the other hand, requires a monthly cash flow of $20,000.

It’s important to note also that since the DBS scheme encompasses your home loan, this is where your Total Debt Servicing Ratio (TDSR) kicks in. What this means is that your total debt (credit card debt, home loan and other loans) can only add up to 60% of your salary. Mathematically, to hit a $20,000 cash flow, you’d have to be earning about $12,500 a month (Salary: $12,500 / Credit Card and Home Loan spend: $7,500)

While one of the latest introductions to the OCBC 360 Account, the “Wealth” segment, requires a relatively high amount to be invested or put into insurance, even without hitting that bonus interest rate, you still enjoy a total bonus interest rate of 2.25%.

Interest Rate – Winner: OCBC

For absolute bonus interest rate, OCBC definitely wins here. However, it’s important to note that DBS’s basic interest rate is better. So, if you are someone who is earning a lot more (and plan to exceed the $50,000 in account balance), then it definitely makes more sense to go with DBS. That being said, if you’re not planning to dump everything into one account and are going to keep around the cap of $50,000, then it’s a no-brainer.

Peripheral Products – Winner: Tie

Given that the DBS scheme encompasses your home loan payments, this is a strong swing in favour of DBS as they have one of the best fixed-rate home loans on the market. However, the simplicity of the OCBC scheme and some of their strong credit cards makes for a compelling case for OCBC as well. While it the different accounts encompass varying types of expenditure and usage, our point on Accessibility (above) still holds true.

 

Which scheme do you think is better suited for you? Share your thoughts with us here.

 

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Mark Cheng

I rant and rave a lot, but when I'm not busy doing that, I'm managing the content for MoneySmart. I love Singapore, but I also believe in helping it to improve bit by bit, and that's where MoneySmart comes in. Have some thoughts? Drop me an email at mark@moneysmart.sg.