Best Savings Account For The Pandemic Recession

Early last June, OCBC announced changes to its OCBC 360 Savings Account. Mr Salty compared alternative savings account for those considering switching from OCBC. However, a lot has changed since then. CIMB revised its rates for its FastSaver Account and the ongoing pandemic has caused havoc in the world. The focus is now not on OCBC, but to ask: “What is the best savings during this pandemic recession?”

Singapore lost so many jobs that the unemployment rate for Singaporeans (excluding PRs and foreign workers) shot up to 4%, which was the highest in 10 years, according to CNA. Stocks has been so volatile in the past few months and many people are shunning complex financial products. Most importantly, many people feel safer keeping cash in banks. The liquidity will be good for when the going gets tough. In the event when one loses his job, it’s more important to make sure one has sufficient cash to pay existing bills and avoid extra expenses.

CIMB’s FastSaver Account emerges as the best account for one to have in this recession caused by the pandemic.

This is where Mr Salty’s review comes in. He looked at the 3 savings account he compared in the previous post to determine which one makes the most sense for the current situation. This is especially so for someone who has lost his job – the salary bonus will not be relevant! Spending has to be cut back so much so that one might not even meet the “Spending bonus”! In this case, CIMB’s FastSaver Account emerges as the best account for one to have in this current climate of recession. Here’s why.

Overview of OCBC 360, CIMB FastSaver and Maybank Save Up Savings Accounts

First, a recap on what the 3 savings accounts are about and what “perks” they offer. We’ll be looking at the interest rates for the lowest savings amount available, since, well… it’s unlikely we’ll be having much savings in a recession.

OCBC 360

OCBC 360, which was the pioneer of tiered bonus interest for savings account in Singapore. There are 3 bonus interests one can qualify for:

Bonus Interest	How to Earn Them
0.6% p.a. for first $35,000	Salary – Deposit one’s salary (more than $1,800)
0.2% p.a. for first $35,000	Save – Increase savings balance by at least $500 every month
0.6% p.a. for 12 months for first $35,000	Wealth – Invest in eligible OCBC wealth products

Additionally, one will incur a $2 monthly fee if the average daily balance for the month falls below $3,000.

More details of this savings account can be found on the official website.

Maybank Save Up

Maybank’s Save Up attempts to up OCBC 360 by offering a whole variety of qualifying activities to earn bonus interests. A summary of the bonus activities are:

• Giro payment – at least $300 a month
• Salary – at least $2,000 a month
• Spend – at least $500 a month, on 2 selected Maybank credit cards
• Structured Deposits – $30,000 (interest earned will be for 3 months)
• Unit Trusts – $25,000 each (interest earned will be for 12 months)
• Regular Premium Insurance – at least $5,000 annually (interest earned will be for 12 months)
• Loans – Home / Car / Renovation / Education, minimum $10,000 (interest earned will be for 12 months)

The bonus interest earned will be based on the number of products and services utilised from the above:

Bonus Interest	How to Earn Them
0.3% p.a.	Use of 1 eligible Maybank products and services
0.8% p.a.	Use of 2 eligible Maybank products and services
2.75% p.a.	Use of 3 eligible Maybank products and services

Additionally, one will incur a $2 per month fee if the average daily balance for the month falls below $1,000.

Maybank’s option is more flexible, and the bonus interests earned varies month by month, depending on which activities one qualifies for.

More information can be found on Maybank’s official website for its Save Up programme.

CIMB FastSaver Savings

CIMB FastSaver Savings Account is the simplest among the 3 savings account compared. One simply earns more interest with higher savings. The tier goes as:

Bonus Interest	How to Earn Them
0.5% p.a.	First $50,000 in savings
0.8% p.a.	Next $25,000 in savings
1.5% p.a.	Next $25,000 in savings
0.4% p.a.	Above $100,000 in savings

More information about CIMB FastSaver Savings Account can be found on its official website.

Most of us won’t qualify for any of the bonus interest for OCBC 360 and Maybank Save Up. Consequently, we will end up with the default interest for both savings account.

Harsh Reality Of A Person Who Loses His/Her Job

As we can see from the summary above, the bonus interests for OCBC 360 and Maybank Save Up can only be earned if you are in a healthy financial situation. When we lose our jobs, we automatically lose the bonus interest for “Salary” component. It is also unlikely that we can increase our savings by at least $500 every month; we would be happy if the balance remains the same at the end of every month!

For those of us with families, it may be hard to keep our expenses below $500. This sounds like a happy problem, but when one does not have a steady monthly income, perhaps we would rather keep our expenses as low as possible, rather than to earn 0.3% interest. Even then, that expense has to be clocked by using a Maybank credit card – at the end of the year, we will still be slapped with an annual fee, which may not be waived if our expenses fall below a certain amount (which is undisclosed).

Last, but not least, while “savvy” financial advisors insist that we should consistently divert our money into investments, the last thing we want, after losing our monthly income, is to convert our high liquidity cash into low liquidity investment products like stocks and trusts.

All of these harsh reality trickles down to one fact: most of us won’t qualify for any of the bonus interest for OCBC 360 and Maybank Save Up. Consequently, we will end up with the default interest for both savings account.

Default Interest Rates For OCBC 360, CIMB FastSaver and Maybank Save Up Savings Accounts

Here are the default interest rates for OCBC 360, CIMB FastSaver and Maybank Save Up Savings Accounts:

Amount	OCBC 360	Maybank Save Up	CIMB FastSaver
First $1,000	0.1%	0.187%	0.5%
Next $2,000	0.1%	0.187%	0.5%
Next $47,000	0.1%	0.187%	0.5%
Next $25,000	0.1%	0.187%	0.6%
Next $25,000	0.1%	0.187%	0.83%

As we can see, because CIMB FastSaver’s “bonus interest” is based on the balance, and not additional financial activity we carry out with the bank. Its “default interest” is its “bonus interest”. In this case, CIMB FastSaver Savings Account has the most attractive interest rate among the 3 savings accounts reviewed. It is agnostic to whether we have a job, whether we buy an insurance with them, or do our shopping with their credit cards.

No.

They just offer a base interest rate starting from 0.5% as long as you have some money in the account.

Eagle-eyed readers may wonder why the table was broken down into so many rows. This was done in consideration of the fall-below fee charged by OCBC and Maybank.

Monthly Fall Below Fee Charged By OCBC 360, CIMB FastSaver and Maybank Save Up Savings Accounts

OCBC and Maybank charges a monthly fee when our average daily balances for the month falls below a certain amount. For OCBC 360, the fall-below amount is $3,000, while Maybank’s fall-below balance is $1,000. The fee rate is as below:

Savings Balance	OCBC 360	Maybank Save Up	CIMB FastSaver
Below $1,000	$2	$2	NA
Below $2,000	$2	NA	NA

This is where CIMB’s FastSaver Savings Account outshines its competitors. Not only do we earn a base interest rate of 0.5%, we are spared from monthly fees regardless of our savings balances!

One thing Mr Salty never understands is why banks charge fall below fees. They are like telling poor peeps that, “Hey, it’s a burden to maintain your meagre savings for you. Why don’t you pack up and leave?”

Impact of OCBC 360 and Maybank Save Up Fall Below Fee

There is a lot of situation when one’s balances can run low. We may be waiting to sell our stocks at the right price. The insurance may be taking a longer time to cash out due to WFH. Either way, every cent is important, especially when our cash is running low.

When our savings balances fall below the minimum savings requirement, even the interest earned cannot recover the monthly fee. Here is the impact of the monthly fall below fees charged by OCBC and Maybank:

Amount	OCBC 360	Maybank Save Up	CIMB FastSaver
Below $1,000	-$1.92	-$1.84	$0.42
Below $3,000	-$1.75	$0.48	$1.25

Yes, on top of earning less interest, we are actually losing money when our savings are falls below the minimum savings amount of OCBC 360 and Maybank SAve Up!

One thing Mr Salty never understands is why banks charge fall below fees. It is obvious that when one’s balances are running low, every cent lost due to “administration fee” is a blow! They are like telling poor peeps that, “Hey, it’s a burden to maintain your meagre savings for you. Why don’t you pack up and leave?”

Leave indeed. Mr Salty has already closed his OCBC 360 account and transferred all his savings to CIMB FastSaver Savings Account to earn that $1.25 a month.

Wait, But What If…?

Nothing in this world is clear cut. You may have an existing OCBC 360 or Maybank Save Up account, and wondering if you should do the transfer. What if you still have an eligible investment product with the bank? What if you really have to spend more than $500 a month because you have many mouths to feed?

Here’s a breakdown on all the other possible scenarios to determine if you should still stay with OCBC or Maybank.

Should I Continue With OCBC 360?

As mentioned, it is unlikely that someone who have fallen on hard times can qualify for the criteria of “Salary” and “Savings” for OCBC 360 to earn the bonus interest. But if you happen to have purchased an eligible investment product with OCBC in the last 12 months, that will still earn you 0.6% interest, which is valid for 12 months from purchase.

That 0.6% interest will earn you up to $1.50 per month if you have less than the fall-below amount of $3,000. That is still below the $2 they charge you for “inconveniencing” them to maintain you pathetic savings account.

In this case, just withdraw your money and deposit them into CIMB’s FastSaver Savings Account.

Should I Continue With Maybank Save Up?

Maybank’s Save Up is somewhere between CIMB FastSaver and OCBC 360, as it has a flexible criterion for earning bonus interests.

A person who lost his job may still conduct $300 worth of Giro payments to pay bills (even though, technically, one may benefit more by paying through credit card and earning miles/cashback, if the Giro payment is the only criteria he meets).

It is even more possible that a person may have bought 3 eligible investment products with Maybank just before hard times hit him. This would earn him a very attractive interest rate for his savings, up until the “expiry” of the products (which, if you recall, ranges from 3 to 12 months). Therefore, depending on the scenario, it may actually make sense to stay with Maybank Save Up programme.

Bonus Interest	How to Earn Them	Nett Interest Earned For Balance Under $1,000
0.3% p.a.	Use of 1 eligible Maybank products and services	-$1.75
0.8% p.a.	Use of 2 eligible Maybank products and services	-$1.34
2.75% p.a.	Use of 3 eligible Maybank products and services	$0.29

Unfortunately, as the numbers showed, even if you hit the maximum criteria to earn 2.75% interest with Maybank Save Up, you will earn a nett interest of $0.29 a month. This is lower than the $0.42 interest you would have earned if you put your last $1,000 in CIMB FastSaver.

But of course, if you have more than $1,000 and you still meet the criteria for earning 2.75%, you would be far better off with Maybank.

The only time you should bail out of Maybank Save Up is either when your investment products’ eligibility expire and you only qualify for the lowest tier of 0.3%, or when your savings fall below $,1000.

For the question of whether you should stay with Maybank Save Up, it is indeed a long reply of “it depends”.

Your savings in CIMB FastSaver will earn a base interest of 0.5% , which is higher than OCBC 360’s 0.1% and Maybank Save Up’s 0.187% .

Parting Words

We are living in the most unusual times of our generation. Even Mr Salty is reeling from the negative impacts from the pandemic. OCBC 360’s changes to its bonus interest criteria are only a symptom of the turbulent times.

The more important question we should ask is, “When I lose my job, which savings account will preserve the value of my savings the most?”

As we had seen above, CIMB FastSaver Savings Account is the most practical savings account for those who lost the financial capabilities to jump through the hoops set up by OCBC 360 and Maybank Save Up in order to earn the bonus interest. As long as you have savings in CIMB FastSaver, you are earning a base interest of 0.5% (and more, if your savings is more than $50,000), which is higher than OCBC 360’s 0.1% and Maybank Save Up’s 0.187%.

Even worse, if your savings are running low, you will lose money to OCBC and Maybank, as they charge a monthly fee when your average daily balances for the month falls below $3,000 and $1,000 respectively.

Maybank Save Up is the next best alternative to CIMB FastSaver, due to its flexible criteria to earn the bonus interest. It makes sense to stay with it when you qualify for its highest and second highest tier of bonus interest. However, when you hit the lowest tier or when your balances run below $1,000, you will also start losing money. That is the time for you to transfer your savings to CIMB FastSaver!

As for OCBC… let’s just say people falling on hard times are just not their target audience.

Do let Mr Salty know what you think of his analysis. Drop him a note if you know of a better alternative to CIMB FastSaver Savings Account.

Remember, salty is life!

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