UOB joins peers in cutting interest rates on flagship savings account

United Overseas Bank has joined its local peers in deepening cuts to interest rates tied to its flagship savings account amid a prolonged low-interest rate environment.

The bank told customers this week that it will lower rates on its UOB One account for balances up to $75,000 from Aug 1.

The UOB One account offers interest rates that are stepped up as customers grow their account balance as well as meet minimum card spend and transact more.

There is a higher rate per subsequent increment of $15,000 in the account balance.

For customers who meet the minimum card spend of $500 a month, interest for balances up to $75,000 will be slashed to 0.25 per cent a year from 0.5 per cent now.

Those who meet the minimum card spend and credit their salary or make three Giro debit transactions will see cuts on rates.

As an example, interest earned on the first $15,000 will be reduced to 0.75 per cent a year from 1.25 per cent now. Interest earned on the next $15,000 will be cut to 0.85 per cent a year from 1.3 per cent.

This means that the maximum interest on a balance of $30,000 will be $240 a year from Aug 1.

There is no change to the qualifying criteria for bonus interest on the UOB One account. The rate of 0.05 per cent a year for balances above $75,000 will also remain.

UOB said on its website: "Given the... pandemic, countries around the world are anticipating economic contractions and central banks have kept interest rates low. As a result, the low interest rate environment is expected to remain for some time."

DBS Bank announced plans on Wednesday to cut rates on its Multiplier account for the second time this year. Its latest changes will affect interest rates that are applied to account balances of up to the first $50,000 from Aug 1.

OCBC Bank and Standard Chartered cut rates on flagship savings accounts on Wednesday. OCBC made tweaks to its OCBC 360 account in May.

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A version of this article appeared in the print edition of The Straits Times on July 04, 2020, with the headline 'UOB joins peers in cutting interest rates on flagship savings account'. Subscribe