OCBC 360 vs DBS Multiplier: Which is better for savings?

TL;DR

• The headline interest rate for the OCBC 360 account has been raised to 4.05% per annum, shortly after the maximum interest rate for the DBS Multiplier account was increased to 3.5% per annum.
• The maximum interest rate for OCBC 360 is more realistically at 1.85% per annum, if you do not buy investment or insurance products from them.
• The DBS Multiplier account makes more sense for deposits of below $50,000, or if you invest through a DBS Vickers account. 
• Both the OCBC 360 and DBS Multiplier accounts offer good alternatives to park your emergency cash, as the Singapore Savings Bond and SGS Bond may be less liquid. 

Update! Refer to new article here on the latest interest rates in November 2022.

What happened?

Here’s the good news - local banks are increasing the interest rate paid on deposit accounts! 

Many people have asked if you should put your money into the OCBC 360 or DBS Multiplier account.

So let me try to use math (yes, math!) to show you my strategy. But first, let us understand how each of them works. 

If you landed on this page but would like to find out about the UOB One account instead, check out our article here. 

What you need to know about the OCBC 360 account

OCBC just announced that it is raising interest rates on its OCBC 360 account to up to 4.05% a year on your first $100,000 of deposits. 

While the headline interest rate of 4.05% looks very promising, what you need to know is that it comes with several conditions.  

For those of us who hate math, this table can be daunting. In a nutshell, you need to have at least $100,000 and participate in 5 different categories before you are eligible for the 4.05% interest rate. 

The truth is that not all of us will hit all 5 categories but we can probably hit the first 3 categories - crediting salary into 360 accounts, increasing our average daily balance by $500 and spending at least $500 on an OCBC 365 credit card. 

If you hit the 3 categories, you will earn an interest rate of 1.85% per annum for your first $100,000 of deposit.  

Yes, that’s quite different from the 4.05% mentioned in the headlines!  (This is why we read terms and conditions!)

The next 2 categories will be harder to hit, which is why you get a much higher interest rate if you are able to fulfil them!  

To qualify for the insurance and/or investment interest rate, you will need to purchase an eligible product from OCBC. The keyword here is eligible and it comes with a price tag.

For insurance, you need to purchase a minimum amount of $2,000 for Regular Premium: Protection/Legacy product, $4,000 for Regular Premium: Endowment/Retirement product or $20,000 for Single Premium Insurance product.

For Investment, you need to purchase a minimum amount of $20,000 for Unit trusts and structured deposits or $200,000 for bonds and structured products.

You should note that the financial products you buy will only qualify for 12 months of bonus interest. 

This means that you will need to buy another financial product after the 12 months is up. The question you’ll have to ask yourself is whether you’d want to buy another insurance product next year? 

This is why I think the 1.85% interest rate is a more realistic number to look at.

You can find more information on OCBC 360 here.

What you need to know about the DBS Multiplier Account

DBS also recently increased their interest rate and customers can earn up to a maximum of 3.5% a year on their first $100,000. 

Like OCBC, it comes with several criteria. You will need to conduct transactions in several categories before you can earn the maximum interest rate. 

For the purpose of this article, we will only discuss option 1 to make it an apple-to-apple comparison. 

DBS goes by the total eligible transactions per month and the higher value of your transactions, the higher the interest rate you will earn. 

First and foremost, you will need to have transactions of more than $30,000 a month to earn the 3.50%. (wow!) 

The good thing about the DBS multiplier account is that you may find it easy to hit 3 out of 5 categories if you bank with them - you will need to credit your salary/connect to SG FinDex, spend using their credit card and have a home loan instalment plan with them. 

For example, if you credit your salary, hit one other category have a monthly eligible transaction value of $2,500 to $5,000, you will earn an interest rate of 0.9% per annum on your first $25,000.

If you credit your salary, hit two other categories and have a monthly eligible transaction value of $2,500 to $5,000, you will earn an interest rate of 1.2% per annum on your first $50,000.

But what is important to note is that you will need to hit at least 4 categories to earn an interest rate on your next $50,000.

Again, there is always a catch to hitting the next 2 categories. Like OCBC, the two categories that are harder to meet are insurance and investments, and the financial products you buy will only qualify for 12 months of bonus interest. 

One of the good things is that there is no minimum purchase amount for each financial product. 

For me, I do not invest using DBS Vickers nor do I purchase insurance for them. I will only earn an interest rate on my first $50,000. At best, my transaction value will fall between the $5000 to $15,000 category and the interest rate I can earn on the first $50,000 is 1.40%. 

This means that I will not be earning a higher interest rate on the next $50,000 (meh). 

You can find more information on DBS Multiplier here.

Should you put your money in OCBC 360 or DBS Multiplier account?

Based on what I see, OCBC 360 is better for savers and DBS Multiplier is better for spenders. 

Hence the answer to the best strategy is - it depends if you are a saver or a spender. 

Let me try to use my rusty math to show you which strategy is better for the average Singaporean. This would be someone who: 

(1) does not buy insurance/investment products from the bank

(2) saves and spends at least $500 respectively a month, and 

(3) has total eligible transactions per month of more than $5000 but less than $15,000.

Pro tip: If you have more than $100,000 in cash, you can put $100,000 with OCBC and the next $50,000 with DBS to maximize the interest you’ll earn. 

What else should I take note of when deciding between OCBC 360 and DBS Multiplier?

Do note that you will qualify for the Investment category for DBS Multiplier if you invest with DBS Vickers, but you will not qualify for the same category in OCBC if you invest with OCBC securities.

If you invest with DBS Vickers, you might find it easier to unlock the additional interest rate for the next $50,000 tranche. 

In this case, you might be better off putting your money with DBS if you have more than $15,000 in eligible transactions amount each month. 

There are many combinations to how you can maximize the interest rate earned but I will not be going into each specific scenario. 

You can ask me on the Telegram group if you have more questions!  

Last question... why not buy the SSB or SGS bond which give me a higher interest rate? 

Beansprout has shared how the Singapore Savings Bonds (SSB) and SGS can allow you to park your spare cash and earn a decent interest rate. 

While they are generally quite safe, I would not be put all my money into these investments as I cannot withdraw my money the next day.

Before you invest, you should note that you should put aside emergency funds and store them somewhere. In this case, it might be better to keep it with a bank than my ahma's biscuit tin. 

Which other deposit accounts interest you? Do you have a better strategy? Let me know in the Telegram group!