SINGAPORE – The battle for deposits has gone up another notch, with UOB raising the interest rates on its flagship savings account following similar moves by rivals DBS Bank and OCBC Bank.
UOB, Singapore’s third-largest bank, lifted the maximum bonus interest rate on its One Account from 3.6 per cent to 7.8 per cent a year, according to checks by The Straits Times on Thursday morning.
This rate applies to account balances of between $75,000 and $100,000 and when customers spend at least $500 a month on an eligible UOB card and credit their salary of more than $1,600.
The tiered bonus interest rates range from 3.85 per cent to 4.85 per cent a year for balances of up to $75,000 – an increase from the 1.4 per cent to 2.5 per cent previously.
The new bonus rates, which took effect on Thursday, are the highest in the One Account’s seven-year history and are on top of a base rate of 0.05 per cent.
UOB now has the highest maximum bonus interest rates among the three local lenders.
OCBC pays 4.65 per cent a year on the first $100,000 in an account, but customers must credit their salary of at least $1,800 through Giro, increase their account balance by at least $500 a month and spend at least $500 on certain OCBC credit cards.
The interest rate goes up to 7.65 per cent a year when they also invest and buy insurance products through the bank.
Over at DBS, the maximum rate on the bank’s Multiplier account is 4.1 per cent a year. This applies to the first $100,000 in an account and when a customer credits an income stream and transacts in three categories with a total volume of $30,000 or more in eligible monthly transactions.
Rates are higher if customers spend larger amounts with DBS, and in more eligible categories that include spending with DBS/POSB credit cards, mortgage payments and investments. An income stream is defined as salary, dividends or use of the Singapore Financial Data Exchange service to get a consolidated view of finances.
These were the second across-the-board revisions by OCBC and DBS for their savings accounts in 2022 as the United States Federal Reserve hiked rates to dampen runaway inflation.
Banks have been fighting for market share in savings accounts, as well as fixed deposits which offer higher interest and lock up sums for specified periods. Having more deposits in their current and savings accounts means that banks incur lower funding costs in lending money to borrowers.
Ms Jacquelyn Tan, head of group personal financial services at UOB, told ST that the bank’s One Account differs markedly from other savings accounts in the industry, which require the customer to fulfil multiple additional criteria such as purchasing insurance or investment products.
She noted that the bank has included salary payments via PayNow as an applicable salary credit, so that more customers can qualify for bonus interest, with effect from Thursday.
“We hope that the updated rates for our UOB One Account will help our customers reduce some of the inflationary impact on their hard-earned savings,” Ms Tan said.
