DBS, OCBC, UOB raise interest rates twice in four months

In order to stay competitive in the wake of rising rates, DBS, OCBC and UOB have raised interest rates on their flagship savings accounts twice in the past four months.

UOB announced last week it would increase the maximum bonus interest rate on its One account to 7.8 per cent a year, more than double from the previous 3.6 per cent.

This follows similar hikes by the other local banks in early-November.

OCBC now pays a maximum of 7.65 per cent a year for its 360 savings account, up from 4.05 per cent, while the highest rate on DBS Multiplier account went up from 3.5 per cent to 4.1 per cent per annum.

After two years of low interest rates, the rate increases are welcomed news for savers. Two of the savings accounts OCBC's 360 account and UOB s One account now serve the highest rates since they were launched.

While contemplating the best option for one's savings, it is important to note that there are conditions to meet in order to achieve the highest advertised rates.

These flagship savings accounts offer tiered interest rates that go up as customers grow their account balance, spend more on eligible cards and conduct other transactions with the bank, such as taking up a mortgage or insurance plan.

For example, the maximum interest rate of DBS is 4.1 per cent for the first S $100,000 in a Multiplier account and when the account holder credits an income stream, such as salary or stock dividend, while chalking up at least SS $30,000 in eligible transactions a month across all three categories. Credit card spending, home loan installments, insurance and investments are some of the categories that are included in these categories.

The bank pays 4.65 per cent a year for balances up to S $100,000 and if they credit at least S $1,800 of salary through GIRO, increase their account balance by at least S $500 a month and spend minimum of S $500 on certain credit cards.

The interest rate goes up to 7.65 per cent when customers invest and buy insurance through the bank, although these investment products and insurance policies would only qualify for 12 months of bonus interest.

To qualify for the maximum bonus interest rate of 7.8 per cent of the UOB, account holders need to have an account balance of no more than S $100,000, have a salary above S $1,600 and spend at least S $500 a month on eligible cards.

It is important to note that this is a tiered interest rate, meaning that it applies only to a fraction of one's savings, deposits between S $75,000 and S $100,000.

According to the bank's website, the effective interest rate on the One account for deposits of $100,000 is 5 per cent per annum.