Edit: Following CIMB’s announcement in revising its rates for FastSaver Account w.e.f 15 Jul 2020, the numbers in this post has also been updated
Singaporeans rejoiced on 02 June 2020 when they were released from their homes like the hungry ghosts of the 7th lunar month. OCBC decided to join in the celebration by announcing that they would be lowering the interest rates for their well loved OCBC 360 Savings Account.
OCBC 360 Savings Account was the first of its kind when it launched in July 2013. In fact, it was so popular that the bank launched an enhanced version within a year! Like a computer game, the savings user gains extra interest when he fulfils certain criteria.
Have your salary deposited directly into the savings account? Plus 1% for you! Paid 3 bills from the account this month? Plus 1%! Spent $400 on your OCBC card? Another 1%! Imagine paying your bills totalling $200 using the credit card, and you just need to spend another $200 more to earn an extra 2% interest!
Many working slaves people like Mr Salty would be familiar with the OCBC 360 Savings Account. When you are too busy with balancing work-life to follow up on stock movements or manage a Shoppee sideline, parking your savings in OCBC 360 was the best way to make sure your money doesn’t depreciate over time.
Although Mr Salty took the news very badly when he received the shocking email on the morning of 02 June 2020, he immediately considered other options to park what little savings he have.
Other than putting his money into the stock market, he also looked at savings plans from competitors like CIMB FastSaver and Maybank Save Up Account. Read on to find out about the pros and cons of each alternative.
What Changes Were There For OCBC 360 Savings Account?
In a nicely worded email that talked about how OCBC was reluctant to make the changes because of the consistently low interest rates, the following changes will take effect from 1 Jul 2020:
In gist, they halved the interest rate for the Salary component and removed the Spend category “bonus”.
The Impact of Changes to OCBC 360 Savings Account Come 1 July 2020
Assuming you meet all the criteria stated for saving $70,000 in OCBC 360 Savings Account, you will only be able to earn 2.1% a year, down from the previous 3.3%.
| Before | After | |||
| First $35,000 | Next $35,000 | First $35,000 | Next $35,000 | |
| Salary | $420 | $840 | $210 | $420 |
| Spend | $70 | $140 | – | – |
| Save | $70 | $140 | $70 | $140 |
| Wealth | $210 | $420 | $210 | $420 |
| Total Interest Earned | $2,310 | $1,470 | ||
| Effective Interest Rate | 3.30% | 2.10% |
Mr Salty is particularly devastated, because after buying his HDB resale flat and spending on the renovation, his savings had gone down A LOT. If you are like Mr Salty and have less than S$35,000, you will only earn a maximum of 1.4%. And because Mr Salty doesn’t invest or buy insurance with OCBC, the interest he earns goes down to $0.8%.
| First $35,000 | Next $35,000 | |
| Salary | $210 | /\ |
| Spend | – | /\ |
| Save | $70 | /\ |
| Wealth | Ain’t nobody got money for this | No such thing |
| Total Interest Earned | $280 | \/ |
| Effective Interest Rate | 0.80% | \/ |
Before 1 July 2020, people with savings of $70,000 could still beat inflation by saving with OCBC 360. After that, you are better off putting in your money elsewhere. For poor blokes like Mr Salty… It’s a total disaster!
Where Is Elsewhere?
If you are adventurous, you can transfer your money into stocks. With the impact of Covid-19, many stocks in Singapore are at a discount from pre-pandemic levels.
Elsewhere in Stocks
For example, the STI went from about $3.30 in Feb 2020 down to about $2.70 in the first week of June. OCBC’s stock also went down from $10 to $9.35. If you have a riskier appetite, you can buy into SIA, which is now at $4.30 (down from $9) – the aviation industry may take some time to recover, but SIA will recover. The question is, when and how much?
CIMB FastSaver Account
CIMB’s FastSaver Account offers 1% interest for the first S$50,000, with no additional requirements. For the next S$25,000, the interest rate is 1.5%.
| CIMB FastSaver Account | Interest Rate |
| First S$50,000 | 0.5% |
| Next S$25,000 | 0.8% |
| Effective Interest Rate for S$75,000 | 0.59% |
At first glance, the effective interest rate of 1.17% for a savings of S$70,000 seems less attractive when compared to OCBC 360 Savings Account. However, when we break the numbers down, we will realise that CIMB FastSaver account is ideal for people with savings of less than S$35,000.
Who Benefits From CIMB FastSaver Account?
The CIMB FastSaver Account is a good alternative for those who have savings below $35,000. At any amount below S$35,000, CIMB FastSaver gives 1% interest rate, compared to that of 0.6% from OCBC 360.
Similarly, anyone who could meet only one of the criteria set by OCBC 360 will also find CIMB FastSaver to be a better savings tool.
Since savers can earn 1% interest in CIMB FastSaver Account without additional requirements, those who just lost their jobs, earns salary less than S$1,800, and/or are unable to save S$500 a month (times are tough, we must admit), are still eligible for the 1% interest!
Considering that if you can’t meet OCBC 360’s Salary and Savings category, your interest rate falls back to the bank’s default of 0.1%, it makes sense to move your savings to CIMB FastSaver Account, where you can still earn 1% interest for savings up to S$50,000.
| Effective Interest Rate | OCBC 360 Savings (With No Bonus Interest) | OCBC 360 Savings (Only Salary) | OCBC 360 Savings (Only Savings) | OCBC 360 Savings (Salary and Savings) | CIMB FastSaver |
| Savings up to $35,000 | 0.10% | 0.60% | 0.20% | 0.80% | 0.5% |
| Savings up to $50,000 | 0.10% | 0.78% | 0.26% | 1.04% | 0.5% |
| Savings up to $70,000 | 0.10% | 0.90% | 0.30% | 1.20% | 0.59% |
| Savings up to $75,000 | 0.10% | 0.90% | 0.30% | 1.20% | 0.65% |
Last, but not least, CIMB’s FastSaver Account does not have a “fall below” fee – so you won’t be charged an admin fee when your savings fall below $1,000 like OCBC does.
CIMB’s FastSaver Account is by far the most attractive alternative to OCBC 360 Savings Account, especially if you have low savings and could not meet either or all of OCBC 360’s criteria for bonus interest; follow the link below to find out more about the product.
Maybank Save Up Account
Maybank’s Save Up Account is somewhat similar to OCBC 360 Savings Account. For savings up to S$50,000, one can earn up to 2.75% interest when they meet all the criteria, which is more than OCBC 360 Savings Account’s maximum of 2.1%.
How Maybank Save Up Account Works
Maybank broke the requirements down to more components compared to OCBC (they call it products or services) and all a Save Up Account holder needs to do is to use up to any of the 3 components to earn the full effective interest rate of 2.75%.
The catch is that 2 of the components, (i)) crediting of salary or paying bill through GIRO; and (ii) spend S$500/month on Maybank Platinum Visa Card and/or Horizon Visa Signature Card are easy to fulfill and will help users earn 0.8% for every month these 2 components are fulfilled.
The remaining components, which enables one to jump from 0.8% to 2.75% interest, will require some heavy spending, like buying an insurance with at least S$5,000 annual premium or getting a renovation or education loan of at least $10,000.
Why Maybank Save Up Account Don’t Work
In a sense, this is very similar to OCBC 360, in which the Wealth category gives a significant boost in the interest rate, but will require savers to spend a hefty amount in OCBC’s insurance/investment instruments first.
When we remove the Wealth category from OCBC 360 and the 3rd component for Maybank Save Up, the latter is equivalent, or worse off (when you have more than S$35,000 in savings). This makes moving your savings to Maybank Save Up Account useless, if you do not intend to invest or buy insurance with Maybank.
| Effective Interest Rate | OCBC 360 Savings (With No Bonus Interest) | OCBC 360 Savings (Only Salary) | OCBC 360 Savings (Only Savings) | OCBC 360 Savings (Salary and Savings) | MayBank Save Up (Salary and Spending) |
| Savings up to $35,000 | 0.10% | 0.60% | 0.20% | 0.80% | 0.80% |
| Savings up to $50,000 | 0.10% | 0.78% | 0.26% | 1.04% | 0.80% |
| Savings up to $70,000 | 0.10% | 0.90% | 0.30% | 1.20% | 0.80% |
| Savings up to $70,000 | 0.10% | 0.90% | 0.30% | 1.20% | 0.80% |
That being said, if you are interested in finding out more about Maybank Save Up Account, the link is attached below for you to explore.
https://www.maybank2u.com.sg/en/personal/saveup/save-up-programme.page
In fact, since CIMB’s FastSaver account does not have fanciful “requirements” like OCBC 360 in order for one to earn the interest rates, you can just park your savings there to earn the 1.2% for $75,000, and you are free to take your spending on other credit cards to earn, for example, miles1.
Parting Words
OCBC has been changing the requirements for earning bonus interest in OCBC 360 Savings Account every now and then since its launch. The changes on 1 July 2020 is by far the most drastic and negative one. Those with savings of less than S$35,000 and those who could only meet 1 of the criteria for earning bonus interest will see their effective interest rate drop to as low as 0.2%.
While Maybank’s Save Up Account is a similar product that offers 0.8% of interest for savings up to S$50,000 (making it almost identical to OCBC 360), CIMB’s FastSaver Account beats the rest with its simple product.
CIMB FastSaver Account is ideal if you have less than S$35,000 in savings, and you can’t meet any of OCBC 360 Savings Account’s criteria for bonus interest. You can still earn 0.59% interest in CIMB FastSaver Account, while OCBC 360 Savings Account gives you only up to 0.1%.
However, when you start depositing salary into OCBC 360, you will most likely meet 2 of the bonus interest criteria (credit salary + monthly increase in balance). That will give you up to 1.2% of interest, with the lowest being 0.6% (for only crediting salary, can’t meet monthly increase in balance, and total savings less than S$35,000). That will still make you better off than putting your money in CIMB FastSaver Account.
Additionally, since OCBC 360 has removed the Spending category, one is now free to focus their spending on other credit cards that gives more rewards in terms of flyer miles than any of OCBC’s credit/debit card1.
Mr Salty will be transferring his savings come 1 July 2020. Will you?
Do let Mr Salty know what you think of his suggestions. Drop him a note if you know of a better alternative to OCBC 360 Savings Account.
Remember, salty is life!
Exclusive Offer For Readers of Hello Mr Salty!
1 Use Mr Salty’s referral links below to apply for a credit card and earn extra miles for your next holiday!
Citi PremierMiles Visa Card
Enjoy welcome offers of up to 37,300 Miles when you apply for Citi PremierMiles Visa Card by clicking HERE.
American Express Singapore Airlines KrisFlyer Card
Earn 7,500 KrisFlyer miles when you sign up for the American Express Singapore Airlines KrisFlyer Card by clicking HERE.