UOB joins OCBC and DBS in raising rates on its savings account

UOB will raise rates on its One savings account across most balance levels. ST PHOTO: KUA CHEE SIONG

SINGAPORE - UOB and OCBC Bank customers will get higher interest rates on their savings accounts from Thursday as local banks fight for market share.

UOB will raise rates on its One savings account across most balance levels.

The rate will go as high as 3.6 per cent for the top tier of balances - from $75,000 to $100,000 - but customers will have to spend at least $500 every month on an eligible UOB card and have their salary credited via Giro.

UOB raised the rate for that tier to 3 per cent in August under a promotion that runs until the end of the year.

There will also be increases across the board for other balance tiers when UOB card customers spend at least $500 a month and perform either three Giro payments over the same period or credit their salary via Giro.

If three Giro payments are carried out, the rates will go up to 0.75 per cent for the first $15,000 and as high as 0.9 per cent for balances from $45,000 to $60,000.

That is an increase of between 0.1 and 0.25 percentage points.

Customers who credit their salary into a UOB account can get higher rates of 1.4 per cent for the first $30,000 and 1.5 per cent for balances from $30,000 to $60,000 - an increase of between 0.7 and 0.9 percentage points.

There are no changes to interest rates on balances from $60,000 to $75,000, which remain at 2.5 per cent.

Ms Jacquelyn Tan, UOB's head of group personal financial services, said on Wednesday that the One account is one of the simplest and most flexible in the market, as customers do not need to invest or buy insurance but only need to fulfil one to two simple banking criteria to earn the bonus interest rate.

Meanwhile, OCBC will raise rates on its 360 savings account.

From Thursday, OCBC 360 customers can earn interest of up to 4.05 per cent on balances of up to $100,000.

The bank said on Tuesday that it will also bring back the bonus interest category for credit card spending - account holders will earn up to 0.35 per cent more a year if they spend at least $500 a month on their OCBC 365 credit card.

The bank will also introduce a new tier for balances above $75,000.

DBS was the first bank to raise rates for savings accounts when it lifted the yield on its DBS Multiplier from 3 per cent to 3.5 per cent for balances from $50,000 to $100,000 early last month.

Interest rates in the United States have been hiked four times since March to combat inflation, which remained high in July at 8.5 per cent.

Mortgage rates in Singapore have climbed in response to between 2.75 per cent and 3.08 per cent.

Savings rates are now also moving up as banks compete for market share, said Ms Chuin Ting Weber, chief executive and chief investment officer of MoneyOwl, who added that lenders are trying to build deeper relationships with customers so that they can sell them more financial products.

Ms Weber noted that customers usually have to do something that is revenue-generating for the banks, such as buying insurance or investment products, if they want to access the high headline interest rates.

She does not recommend that customers go looking for the most attractive savings rates because any incremental increase is just so small, noting that they could end up buying an unsuitable product and lose more in fees and commissions than would be gained from a higher interest rate.

Ms Weber said customers should just put their money in the bank where they have one major activity.

In her case, her mortgage is with DBS, so she just uses the DBS Multiplier savings account.

Mr Tan Chin Yu, senior client adviser at Providend, chose his savings account for reasons of convenience: "Most of my credit cards, my home loan, everything is with one bank - it is more of a hassle-free preference."

Mr Tan added that it is good to have many different transactions, such as mortgage, deposit, investment and insurance, with the same bank, because customers would typically be rewarded with preferential interest rates.

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