SINGAPORE - The battle of the interest rates is back. Banks across the island have been dangling higher rates on savings and current accounts to attract new customers.
The catch: Most of the promotions are available only if customers carry out a range of other transactions with the bank as well.
For example, some bonus deposit rates apply only if you use the bank's credit cards, or take out a mortgage with the bank, in addition to storing your savings with it. The aim is to entrench each customer's loyalty to a single bank and reduce the likelihood that he will switch to another bank.
Some of the new promotions even exceed the rates offered by fixed deposits, which have traditionally brandished better interest rates because they require the cash to be locked up for a certain period.
But customers should take note of the fine print. For many accounts, the bonus interest rates are usually applied only up to a certain amount, say on the first $50,000 of your savings. Any deposits beyond that usually accrue just the basic interest rate.
The bonus interest rate could also be available for a limited period only, or apply only to fresh deposits after a certain timeframe.
The Straits Times Money Desk shopped around to find out which bank gives you the best bang for your buck:
| Bank | Account | Highest interest rate (%) | Conditions |
|---|---|---|---|
| Citibank | InterestPlus savings account | 3.5 |
Earn 1.2% bonus interest when you invest $250 monthly for 12 months in a regular savings plan, or a lump sum of $25,000 in unit trusts Earn 1.2% bonus interest when you take up an insurance plan with a monthly premium of $250 for 12 months, or $25,000 in a single premium Earn 0.1% bonus interest when you spend $25 monthly on your Citibank credit card Earn 1% bonus interest when you take up a home loan of $250,000 in the first year Bonus interest is paid on the first $50,000 of your account balance Fresh funds for investment or insurance are needed to earn bonus interest after the first year |
| OCBC | 360 account | 3.05 |
Earn 0.05% interest for balances of up to $200,000 Earn 1% bonus interest when you credit your salary of at least $2,000 monthly to this account through GIRO Earn 1% bonus interest when you pay three bills with this account every month Earn 1% bonus interest when you spend at least $400 on your OCBC credit cards Bonus interest is paid on the first $50,000 of your account balance |
| DBS | Multiplier account | 2.08 |
Earn bonus interest when you use this account for any of four transactions: crediting your salary, spending on your credit card, paying your home loan installments or crediting your dividends Bonus interest of between 0.98% and 2.08% will be paid depending on the total monthly cash flow A minimum monthly cash flow of $7,500 is needed to be eligible for bonus interest and a monthly cash flow of $20,000 is needed to hit the top 2.08% rate Bonus interest is paid on the first $50,000 of your account balance |
| Standard Chartered | Bonus$aver account | 1.88 |
Earn bonus interest when you spend at least $500 on your credit or debit card Bonus interest is paid on the first $25,000 of your account balance |
| UOB | Passbook savings account and Uniplus account | 1.1 |
Earn bonus rates of between 0.6% and 1% when you deposit fresh funds of at least $15,000; get the top bonus rate of 1% for fresh deposits of above $100,000 The highest bonus rate of 1% will be on top of the prevailing interest rate of 0.1% for balances above $350,000 Promotion ends Apr 30, 2014 |
| CIMB | StarSaver account | 0.8 |
Promotional interest rate of 0.8% for balances of up to $750,000 Base interest rate of 0.5% will apply for amounts beyond $750,000 |
| Maybank | iSAVvy savings | 0.5 |
Earn interest rates of between 0.1875% (for amounts below $5,000) and 0.5% (for amounts above $200,000) This is an online savings account |
| HSBC | Premier account | 0.1 |
Earn interest rates of between 0.01% (for amounts below $5,000 and 0.1% (for amounts above $100,000) This is a savings account held in trust by a parent for their child |
