UOB to trim deposit rates on flagship account from Sept 1 after OCBC cut; DBS stays unchanged

SINGAPORE – Interest rates keep falling for savings accounts here with UOB now about to fire the next salvo.

The lender said it is cutting rates for its flagship UOB One account from Sept 1 – the third such reduction in the past two years.

UOB’s move follows on the heels of OCBC, which dropped rates on its 360 account from Aug 1 – the second time this year.

DBS remains the last one standing, with rates on the Multiplier account remaining unchanged at between 1.8 per cent and 4.1 per cent.

A flagship account is a bank’s best savings product, offering bonus interest rates that rise as customers make more transactions, such as credit their salary, spend on their credit card, take up a loan or buy an insurance policy.

UOB told customers that it is dropping the bonus rates for two categories by between 0.5 and 0.8 percentage point. The affected categories are: Card spend and the requirement to make three debit transactions via Giro; and card spend and salary credit.

UOB One customers will earn between 1 per cent and 3 per cent on their first $125,000 from Sept 1, if they fulfil the criteria for the two categories. The rates are down from between 1.5 per cent and 3.8 per cent.

The rates for the card spend tier remain at 0.05 per cent to 0.65 per cent. 

This essentially means that customers can expect between $750 and $1,750 of interest a year if they fulfil the criteria of card spend and three Giro debit transactions. 

If they credit their salary and spend on their UOB credit card, they can expect between $1,125 and $2,625 a year and between $487.50 and $512.50 if they only use their credit card.

The upcoming revision is the third time the bank has trimmed rates for the UOB One account since May 2024.

A UOB spokesperson said the revisions align with the longer-term interest rate outlook. The announcement follows the July 30 decision from the US Federal Reserve

to keep rates steady there at 4.25 per cent to 4.5 per cent

.

The spokesperson added that the number of customers who earned bonus interest on their UOB One account has increased by more than 10 per cent year on year as at June 30.

Mr Michael Makdad, senior equity analyst at investment research firm Morningstar, said UOB had been the more aggressive in offering higher rates among the three local banks in order to attract deposits.

He added that he is not surprised that it is cutting rates again as it seeks to “normalise its offerings that may have been more attractive than (its) peers for some customers”.

Mr Glenn Thum, research manager at Phillip Securities Research, said that UOB may be trying to sustain its net interest margin (NIM) by lowering its funding costs.

NIM is the difference between the interest income a bank receives from lending and what interest it pays on customer deposits.

A higher NIM means more profit, a lower one indicates it is earning less from its lending and deposit activities.

Meanwhile, OCBC 360 customers are now earning lower rates after the bank trimmed the interest it pays on certain bonus categories, such as salary credit, savings and card spend, from Aug 1.

The bonus rates for the insurance and investment tiers remain unchanged.

This marks the second time OCBC has dropped deposit rates on its 360 account,

the first coming on May 1, 2025

.

Morningstar’s Mr Makdad said OCBC has the buffer to follow up with another cut after its results on Aug 1 showed that deposits in current and savings accounts increased 14 per cent year on year to $203 billion as at June 30.

Such deposits are seen as cheaper sources of funding for banks. 

However, Phillip Securities’ Mr Thum does not think OCBC will lower rates on the 360 account in the next few months unless the US Fed cuts rates faster than expected.

An OCBC spokesperson said its 360 account remains a competitive product.

The spokesperson added that the bank “regularly reviews its product offerings and interest rates to align them with the competitive landscape and market conditions”.

Ms Helen Tran, DBS’ head of consumer deposits and transactional payments, said the bank has maintained its rates, an approach that has yielded positive outcomes. 

The number of DBS Multiplier customers increased by more than 30 per cent from March 2022 to March 2025, she noted, adding that “growth momentum remains strong”.

Ms Tran said that the DBS Multiplier remains the only savings account that recognises retirement payouts from the Central Provident Fund account as part of income in the “Bank & Earn” space.

The initiative means that 900,000 Singaporean or permanent resident customers aged 65 and above automatically qualify for higher interest rates on their Multiplier balances.

The flurry of deposit rate cuts has left some depositors, like 57-year old civil engineer Leong Meng Sun, scurrying for another bank.

Mr Leong was with Standard Chartered initially but switched after the interest on his account dropped from $20 a month in December 2024 to less than $9 from January 2025, for the same salary.

He looked at the OCBC 360 but felt he would struggle to meet the requirement to increase his monthly account balances by $500.

He then settled on the DBS Multiplier because it pays 1.8 per cent for smaller account balances of $50,000 like his, given he can meet the salary credit and credit card spend criteria.

He also likes that Multiplier customers can continue to earn interest after they retire, but acknowledges that DBS may also follow UOB and OCBC to cut the deposit rates: “It is a risk I have to take.”