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Fighting inflation: Can high-yield savings accounts with minimal requirements help?
The latest wave of interest rate revisions enables people to earn more on their account balances without spending more
Banks in Singapore are offering higher interest rates on their flagship savings accounts.
PHOTO: GETTY IMAGES
Genevieve Chan, Content STudio
There is good reason for retiree Koh Seow Lar to smile all the way to her banking app.
Seven years ago, she opened a Multiplier savings account with DBS, mainly as a convenient way to transfer money to her son, who was then studying in London.
Today, that account offers Madam Koh, 67, a higher interest rate on her savings, prompted by aggressive US Federal Reserve interest hikes to tame inflation.
For the prudent mother of one, convenience has now been coupled with unexpected compensation – helping to hedge against rising prices, stagnating income and all-round uncertainty.
“It’s a pleasant bonus,” says the savvy investor, who is always alert to trends and opportunity. “I’d never dreamt (in pre-Covid low-interest times) that a savings account would give me reasonable, competitive returns.”
Madam Koh, who is an empty nester along with her 66-year-old husband, is keen to grow their nest egg. “Every little bit helps,” she says, “especially at our age.”
But, she wonders, with other banks dangling competitive rates: Is a bird in the hand better than two in the bush? Should she stick with Multiplier, and its maximum interest rate of 4.1 per cent a year?
DBS’ reply: Simpler is better; there is logic in being holistic.
“The DBS Multiplier programme… doesn’t require customers to jump through hoops to earn higher interest on their account balances,” says Mr Jeremy Soo, DBS’ head of Consumer Banking Group.
“It is inclusive and broad-based. We have done away with plenty of pre-conditions so that everyone – from gig workers, tertiary students and full-time national servicemen (NSFs) to salaried workers and retirees – can participate easily and qualify for higher interest across more transaction categories.”
The Multiplier account offers tiered interest rates to customers, applicable to the first $100,000 in their account. The bank considers its conditions customer-friendly.
Mr Soo, 60, offers, for example:
Income: “Our recognition of income is most holistic as it includes salary and dividends, catering to a wide range of segments, including salaried workers and retirees.
“Those who connect the Singapore Financial Data Exchange (SGFinDex) service to NAV Planner to get a consolidated view of their finances also qualify. This has the added benefit of helping our customers better manage their finances.”
“We also don’t impose a minimum salary crediting requirement.”
Spend: DBS Multiplier customers do not need to spend a minimum amount to unlock higher interest rates. “Neither do we restrict (spending) to only certain credit cards – all DBS/POSB credit card spend is recognised. Those who do not qualify for credit cards, such as tertiary students, NSFs and gig workers, are able to earn higher interest through PayLah! retail spend, making us more inclusive.”
Home loan repayment: Those who have a home loan with the bank – whether it's for a new purchase or through refinancing – can earn higher interest on Multiplier. “We are the only bank that allows our customers to convert the repayments of their largest asset (which is their home) into higher interest rates for the entire loan tenure.
“It also remains the only solution that recognises home loan repayments in both cash and CPF for the full loan period for up to three joint borrowers.”
“It also remains the only solution that recognises home loan repayments in both cash and CPF for the full loan period for up to three joint borrowers.”
Investments and insurance: “Understanding that customers have different needs and preferences, our investment recognition is more holistic as it includes regular savings plans, robo-advisers and equity trades.
“Customers with something as simple as a regular savings plan with us can qualify for the investment category. No minimum premium is needed to qualify for insurance. This makes it easy for our customers to kick-start their financial plans.”
“Customers with something as simple as a regular savings plan with us can qualify for the investment category. No minimum premium is needed to qualify for insurance. This makes it easy for our customers to kick-start their financial plans.”
To qualify for the maximum interest rate of 4.1 per cent, customers will need to credit an income source to the account – via salary, dividends or SGFinDex – and transact at least $30,000 in three eligible categories.
“We have also increased our balance cap to $100,000 so that customers can earn even higher interest on their balances without having to unlock more transaction categories,” adds Mr Soo.
This is the fifth of a seven-part series titled "Win the race against inflation", in partnership with
