With the rising interest rates, I realized that topping up my CPF SA account might no longer be competitive. Mainly because savings accounts are giving about 4% with no lock-in period. Also, this applies to savings of up to 100k.
**This is not a sponsored post.**
So who gives the best interest rate?
My top pick would be UOB,
even though some current promotions that UOB is offering
might have expired.
Basic requirements
- Spend $500 on eligible spend – usually credit/debit card expenditure on UOB ONE card
- Credit salary of a minimum $1,600
|
Monthly Average Balance |
Total interest |
|
S$30,000 |
3.85% |
|
+S$30,000 |
3.90% |
|
+S$15,000 |
4.85% |
|
+S$25,000 |
7.80% |
By doing the above, this translates into:
- At 60K balance, the effective interest rate is 3.87%
- At 75K balance, the effective interest rate is 4.07%
- At 100K balance, the effective interest rate is 5.0025%
**The interest and spending criteria are computed on a calendar month
basis. To help reconcile your credit card spending, you'll need to sync up your Credit Card billing cycle.
What I also really like about UOB’s App is that I can
track my eligibility within the account details.
Gone are the days when I have to call in to ask if I’ve spent $500 of eligible
spending and reconcile the transactions over the phone.
What’s more, this doesn’t include the quarterly cash
cashback of $50.
Well... the iffy part of this is... If you miss one month, you miss
the entire quarter.
So to be safe open the UOB one Account and Credit Card at the start of the
month, else disregard the 1st quarter’s cashback.
Bonus
Other promotions that might come your way if you sign up with UOB:
- Sign-up bonus of $30 / $60– For the first 200
customers, and you need to make an initial deposit. The good thing is that it applies
to existing UOB customers too but it must be “fresh funds”.
- Salary Credit of $50 – register your interest and
get rewarded, we need to do this to qualify anyway.
- Savings promotion – register your interest and do the transfer within the same month. This might be seasonal, I heard they did one during Christmas and the CNY one is just over.
With all these incentives, the effective interest rate would be higher.
One caveat though, you can apply for the sign-up bonus and savings promotion
bonus concurrently. However, the amount deposited cannot overlap.
i.e. if the sign-up bonus deposit is $5,000 and you have pledged $50,000 for savings
promotion. You need to deposit $55,000 to qualify for both. I’ve clarified with UOB 😊
Unity is strength
So a few years ago, my mum wanted to renew her endowment
plans which gave her about 1-2% for a lock-in of 1-2 years. I felt that was a very low bar and offered her alternatives.
Ever since then, I’ve been managing it for her.
With rising interest rates, it dawned on me that consolidating our savings is a win-win situation as we both get more interest.
The downside risk is:
1) UOB can change the rates anytime
2) The additional 1% is only $1,000.
What if I have more than 100K to deploy? See you in Part 2
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