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The highest interest savings account in Singapore today (2020 Edition, post Covid-19)

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Back in March 2020, we did an analysis on the highest interest savings account in 2020.

Fast forward a few months, COVID-19 struck, and as a result interest rates have all fallen off a cliff with the Fed rates, LIBOR, SIBOR and every other major developed country’s interest rate tanking. While this greatly benefits borrowers (e.g. current fixed mortgage rate packages are offering ~1.5%), it hurts savers as retail bank have taken the opportunity to also lower the interest rates offered on their savings accounts - hitting popular ones such as the OCBC 360 and SC Bonu$aver. In fact, OCBC announced huge nerfs to the interest rates on their high interest savings account to take effect on 1st July, so it may be about time for those banking with OCBC to consider diverting funds to another bank.


Thats a very steep drop in a very short period of time… Chart taken from Trading Economics

With such a dramatic event hitting the world, we thought that this was an opportune moment to update our analysis on high interest savings accounts that are popular with Singaporeans today, based on realistic interest rates attainable (i.e. we would not suggest deliberately taking up an insurance policy with a bank just to earn an additional 1% interest for 12 months). And here it is!

TLDR COVID impact summary: OCBC 360 Account used to be good but now sucks, BOC is surprisingly the best one available now


What is a high interest savings account?

If you or your friends are currently using savings accounts such as the DBS Multiplier, OCBC 360, or UOB One you already know what high interest savings accounts are - they typically offer significantly higher interest rates of 1-2% per year as compared to a bank’s typical 0.05% p.a. base interest rate.

However in order to get these higher interest rates, the banks will require you fulfill other conditions such as crediting your monthly salary with the bank, spending on the bank issued credit cards, etc. High interest savings account are getting very popular these days because consumer always love higher interest rates, and banks use these as an opportunity to attract customer deposits and also build customer loyalty (i.e. make it harder for you to leave them) by tying you with multiple services across the bank.

What is the best high interest savings account for me?

At the risk of sounding like a broken record here, the best account depends very much on your personal life circumstances (just like the best combination of credit cards for yourself). However, we have found that the savings account that are popular with Singaporeans are generally tier their higher interest rates around similar categories, therefore we will do a comparison based on these categories:

  • Bank account balance
  • Monthly salary credit
  • Credit card spending
  • Giro/Bill payments

Methodology

We decided to compare the popular bank accounts in terms of effective interest rate (and the absolute dollar value of interest) against bank savings, spaced $5,000 apart from $10,000 to $75,000. This is done using the bank’s own calculators on their websites (in the case of BOC Smart$aver, there is a very helpful Google Sheets calculator). For OCBC, we did not use the interest calculator on the website, but used the interest rates communicated on this Straits Times article as the basis.

While there are many possible permutations available, we focused on the ones that probably apply towards more mainstream savers, and base it off the below monthly assumptions:

  • Salary credit of at least $2,000
  • Credit card spending of at least $500
  • At least 3 GIRO/bill payments

Here are our results based on these assumptions (we have highlighted in yellow the 2 banks in this table that give the highest interest rate):

Effective Interest Rate Received

Summary

As you can see, even if you keep the conditions similar the savings accounts are most competitive at different amounts of savings. Based on the numbers above, we can make a few broad recommendations of what works best:

  1. Go with BOC Smart$aver, period. They offer the highest interest in their savings account!
  2. If you have <$25k and dislike BOC (notorious for bad service), consider banking with DBS for the DBS Multiplier Account
  3. If you have $30-65k in savings, the Standard Chartered Bonu$aver is the next best choice for you, offering a solid 1.6% interest rate regardless of how much you have in the account. Should you decide to get this account, do consider supporting WhatCard by applying for it via our affiliate link here.
  4. If you have $65-75k in savings, consider going with UOB One Account

For reference, we are also including here the absolute dollar value of interest you will be getting with these different savings accounts:

Dollar Value of Interest Received


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