If you are looking for a place to earn a little more than the bare minimum bank interest, you have a range of options, such as the OCBC 360, UOB One, DBS Multiplier. However, all of these come with strings attached. Most, if not all of them, require your salary to be credited to that account, and require minimum credit card spending on a monthly basis etc. That's what you need to do to earn that juicy interest.
The problem here is that they have a ceiling on how much principal is entitled to the higher interest. For example, up to a maximum of SGD 70,000 is entitled to the higher interest for the OCBC 360. Any excess over this balance only earns a measly 0.05% a year.
The problem here is that they have a ceiling on how much principal is entitled to the higher interest. For example, up to a maximum of SGD 70,000 is entitled to the higher interest for the OCBC 360. Any excess over this balance only earns a measly 0.05% a year.
If you have any excess cash above these maximum amounts, you might be looking for a 2nd tier of savings options which gives you higher interest. I have been searching for something that fits the criteria below:
From history, Standard Chartered may or may not start a new Promotion after the current one expires, but if they do, due to the Fresh Funds condition, you need to top up your account with more money to enjoy the bonus interest. Furthermore, the bonus interest only applies to your Incremental Balance.
Pros
- higher interest of 1.05% to 1.2%
-no lock in period
-high maximum amount ceiling. Incremental Balance is capped at 1 million dollars.
-interest is paid monthly
Cons
-only on fresh funds
-only lasts 2 months, after which your balance earns a measly 0.1%
The CIMB Fastsaver is a bank account from CIMB that gives you 1% per annum for the first SGD 50,000, and any amount above that earns 0.6% per annum. A minimum balance of 1,000 is required and... that's about it!
This is one of the easiest and most straightforward products around. However, do take note that this account seems to be a mainly online account. If you withdraw funds via Internet Banking, its free, but if you do it over the counter, a charge is levied. Be sure to refer to this FAQ
Pros
-higher interest rate of 1%
-no lock-in period
-interest is paid monthly
-simple conditions
Cons
-maximum ceiling of 50,000. However, any amount above that still earns 0.6% per annum, which is still higher than your normal bank account pays you.
CIMB Starsaver is the lesser cousin to the CIMB Fastsaver. You earn 0.8% on your balance, provided you maintain a minimum balance of 1,000.
Pros
-higher interest rate of 0.8%
-no lock-in period
-interest is paid monthly
Cons
-not much cons, even if you consider the minimum balance of 1,000
Pros
-higher interest rate of 0.8%
-interest is paid monthly
Cons
-only on fresh funds
-no withdrawals, or you lost your bonus interest of 0.75%
-relatively higher initial investment of 10,000
-must maintain a balance of 3,000
There is a transaction cost of 2 dollars on buying, and 2 dollars on redemption, and you can only subscribe or redeem monthly.
Although the bond pays interest every 6 months, if you redeem before the scheduled payment, you will receive a pro-rated amount, called the accrued interest.
All-in-all, you can treat this like another form of short term bank savings account, if you can wait 1 month for the redemption.
Pros
-highest interest rate
- Low risk. No complicated structured products for me. Ideally some form of bank deposits protected by the Singapore Deposit Insurance Corp (SDIC)
- Pays a higher interest rate. Somewhere in the range of 1%
- Simple qualifying terms. No minimum qualifying spend that kind of bull-crap.
- 'No lock-in of principal, or at least not for very long
I'll disregard the other conditions, such as minimum balance, unless I consider them to be particularly onerous.
When the E-saver was first introduced, it was a bit of a novelty. No bank passbook, no withdrawal or deposit at bank counters, transactions are all online. In return, you get a comparatively higher interest rate versus the local banks.
Over the years, it has morphed to become a slightly different creature. In its current form, you get a paltry starting interest of 0.1% per annum, for balances less than 50.000.
As you can see from the table, it is the bonus interest that allows you to earn a high total interest starting from 1.05% to 1.2%, and this only applies to Incremental Balances as compared to your September balance. The bonus interest only applies to the period 1st October 2017 to 30 November 2017. After this period is over, the bonus interest will no longer apply.
From history, Standard Chartered may or may not start a new Promotion after the current one expires, but if they do, due to the Fresh Funds condition, you need to top up your account with more money to enjoy the bonus interest. Furthermore, the bonus interest only applies to your Incremental Balance.
Pros
- higher interest of 1.05% to 1.2%
-no lock in period
-high maximum amount ceiling. Incremental Balance is capped at 1 million dollars.
-interest is paid monthly
Cons
-only on fresh funds
-only lasts 2 months, after which your balance earns a measly 0.1%
The CIMB Fastsaver is a bank account from CIMB that gives you 1% per annum for the first SGD 50,000, and any amount above that earns 0.6% per annum. A minimum balance of 1,000 is required and... that's about it!
This is one of the easiest and most straightforward products around. However, do take note that this account seems to be a mainly online account. If you withdraw funds via Internet Banking, its free, but if you do it over the counter, a charge is levied. Be sure to refer to this FAQ
Pros
-higher interest rate of 1%
-no lock-in period
-interest is paid monthly
-simple conditions
Cons
-maximum ceiling of 50,000. However, any amount above that still earns 0.6% per annum, which is still higher than your normal bank account pays you.
CIMB Starsaver
CIMB Starsaver is the lesser cousin to the CIMB Fastsaver. You earn 0.8% on your balance, provided you maintain a minimum balance of 1,000.
Pros
-higher interest rate of 0.8%
-no lock-in period
-interest is paid monthly
Cons
-not much cons, even if you consider the minimum balance of 1,000
OCBC Bonus+ Savings Account
Earn up to 0.8% a year (0.5% base interest + 0.75% bonus interest), for months without withdrawals. In addition, you need to inject 10,000 in fresh funds and the average daily balance cannot fall below 3,000.Pros
-higher interest rate of 0.8%
-interest is paid monthly
Cons
-only on fresh funds
-no withdrawals, or you lost your bonus interest of 0.75%
-relatively higher initial investment of 10,000
-must maintain a balance of 3,000
Here at last we come to the last, but certainly not the least, of the options. What are Singapore Savings Bonds?
I'll let the Straits Times article here do the explaining, but if you would like a summary:
-Introduced in July 2015, the Singapore Savings Bonds (SSB) give retail investors a regular interest payment every six months
-The step-up interest rates are determined based on the average rates of benchmark Singapore Government Securities the month before the issuance
-Investors have the flexibility to redeem SSBs in any month without additional penalties, although there is a $2 transaction fee
-The minimum amount for each investment is $500, and each individual investor can invest up to $50,000 in each issue and a total of $100,000 in different SSBs.
-SSBs offer several benefits, which include having almost zero default risk because the Government guarantees the interest payment and the initial capital investment.
-The main difference between an SSB and a traditional bond is that there is no capital gain from buying and redeeming an SSB because it is sold and redeemed at the same value and there are no transactions allowed between SSB investors. So interest income is the only gain from an SSB investment
The interesting thing is that this interest rate on the 1st year is at 1.26%, which is higher than all the options listed above.
If we plot a chart of the 1st year coupon rate for all the bonds issued til date, we can see that the interest rates are on an uptrend.
I'll let the Straits Times article here do the explaining, but if you would like a summary:
-Introduced in July 2015, the Singapore Savings Bonds (SSB) give retail investors a regular interest payment every six months
-The step-up interest rates are determined based on the average rates of benchmark Singapore Government Securities the month before the issuance
-Investors have the flexibility to redeem SSBs in any month without additional penalties, although there is a $2 transaction fee
-The minimum amount for each investment is $500, and each individual investor can invest up to $50,000 in each issue and a total of $100,000 in different SSBs.
-SSBs offer several benefits, which include having almost zero default risk because the Government guarantees the interest payment and the initial capital investment.
-The main difference between an SSB and a traditional bond is that there is no capital gain from buying and redeeming an SSB because it is sold and redeemed at the same value and there are no transactions allowed between SSB investors. So interest income is the only gain from an SSB investment
The interesting thing is that this interest rate on the 1st year is at 1.26%, which is higher than all the options listed above.
If we plot a chart of the 1st year coupon rate for all the bonds issued til date, we can see that the interest rates are on an uptrend.
There is a transaction cost of 2 dollars on buying, and 2 dollars on redemption, and you can only subscribe or redeem monthly.
Although the bond pays interest every 6 months, if you redeem before the scheduled payment, you will receive a pro-rated amount, called the accrued interest.
All-in-all, you can treat this like another form of short term bank savings account, if you can wait 1 month for the redemption.
Pros
-highest interest rate
-redeem early without penalty
Cons
-you have to wait a maximum of 1 month for redemption monies to hit your bank account.
And there you have it, a review of the current short term deposit options available, if you are looking to a place to stash liquid cash but you want to earn a little bit more on your stash.
None of the above should be taken as investment advice. Do your own due diligence
Cons
-you have to wait a maximum of 1 month for redemption monies to hit your bank account.
And there you have it, a review of the current short term deposit options available, if you are looking to a place to stash liquid cash but you want to earn a little bit more on your stash.
None of the above should be taken as investment advice. Do your own due diligence
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