Back in 2017 when DBS Multiplier 2.0 was launched, Heartland Boy and Heartland Girl each opened a DBS Multiplier Account online. They even went one step further by opening a POSB eEveryday Savings Account at the bank branch. A joint bank savings account with POSB allows each of their DBS Multiplier accounts to aggregate both their salaries that have been credited into the joint account as eligible transactions. Heartland Boy’s plan to optimize their DBS Multiplier accounts has allowed the Heartland Couple to enjoy high interest rates on their savings with relative ease. Indeed, the journey has been nothing short of enriching (pun intended) thus far and Heartland Boy can tell you that it is only going to get a whole lot better. From 1 May 2019, DBS Multiplier will take on a new lease of life again. In yet another positive change, DBS Multiplier has upped its game once again, and so can (possibly) Heartland Boy.

**How Does the DBS Multiplier Account Work?**

As a quick recap, DBS Multiplier account holders MUST credit their salaries and perform at least 1 other activity in the 4 categories listed in Diagram 1 to be eligible for the higher interest rate.

Given that there is no minimum spending required in any of the 4 categories and salary crediting, it is relatively easy to qualify for higher interest rate with the DBS Multiplier account. As shown in Diagram 2, a DBS Multiplier account holder can earn higher interest rate by either (A) increasing the eligible transactions per month (moving vertically downwards) or (B) performing more activities from the 4 categories (moving horizontally to the right).

This ease and flexibility have allowed Heartland Boy and Heartland Girl to consistently reach the interest rate tier of 2.2% for their savings in the DBS Multiplier accounts. It has served Heartland Girl so well that her salary crediting woes immediately became a thing of the past. Her only main gripe is that this attractive interest rate is capped at the first $50,000 deposited in her DBS Multiplier. When she reached the ceiling earlier this year, she made sure she registered her disgruntlement, however minor, with Heartland Boy. Thankfully, DBS has come to the timely rescue of Heartland Boy once again.

**DBS Multiplier From 1 May 2019**

From 1 May 2019, instead of only the first $50,000 being eligible to earn higher interest rate, a whopping first $100,000 in your DBS Multiplier account would now be eligible if the conditions are met. The catch is that the account holder must now perform at least 3 activities from the 4 categories in order for the incremental $50,000 to qualify for the higher interest rate as shown in Diagram 3.

This is how to interpret the revised DBS Multiplier interest rate table that takes effect from 1 May 2019 onwards. Note that the calculation (the aggregating of eligible transactions) and qualifying mechanisms (no minimum spending on any category) that have been core to the DBS Multiplier remain unchanged after this revision. What has changed is the addition of a new column. DBS Multiplier now rewards a __step-up interest__ rate on the __incremental balances__ (capped at the next $50,000) if the account holder fulfills the task of salary crediting + at least 3 categories.

Here is an example of how the revised DBS Multiplier works.

*Assuming that Heartland Girl has $80,000 in her DBS Multiplier account and that she successfully credits her salary and performs 3 category activities to yield total eligible transactions of $6,000 per month, her first $50,000 will earn 2.2% p.a. while her next $30,000 will earn 2.4% per annum. Therefore, the effective interest rate that she is earning for her entire $80,000 in the DBS Multiplier would be 2.28%. *

For simplicity, Heartland Boy has compiled the **effective interest rate** on the *first $100,000* that the revamped DBS Multiplier provides, assuming that the account holder achieves 1, 2 or 3 categories. (This is not to be confused with Diagram 3)

As seen in Diagram 4, if the account holder is able to perform 3 out of the 4 categories, the effective interest rate on the first $100,000 under the new DBS Multiplier would have improved significantly compared to the previous DBS Multiplier. Interpreted in another way, it is also extremely critical that the account holder is able to achieve 3 categories before thinking of doubling down on his/her deposits in the DBS Multiplier. This is the dilemma facing Heartland Boy today.

**How Heartland Boy Can Get To 3 Categories**

Heartland Boy has been hitting the Credit Card Spend and Investments categories consistently. This also means that he only achieves 2 Categories and would not be eligible for the step-up interest rate awarded to the incremental balance under the improved DBS Multiplier. As shown in Diagram 5, this leaves him with the categories of Home Loan Instalments or Insurance to aim for.

Heartland Boy only very recently took up a HDB Loan for his BTO flat and so it is unlikely that he will switch to a DBS/POSB residential loan anytime soon. He also acknowledges that he has peers who have previously taken a DBS/POSB home loan and are enjoying lower interest rates than a HDB loan. Therefore, he does not rule out the possibility of sitting down with the bank to review and study the various options in the near future.

As such, insurance is the only viable category left for him. As a responsible parent, he did a review of his insurance policies with his financial advisor just before Olympia was born. Therefore, he feels that both Heartland Girl and him are already adequately insured. His analysis shows that it may still be possible to buy an endowment policy that can be timed to fund Olympia’s tertiary education. (if she gets there) Similarly, purchasing insurance is a task that Heartland Boy does not take lightly and he will take considerable time to review the available options. Therefore, it is unfortunate that he won’t be able to benefit immediately from the latest increase in interest rate for the DBS Multiplier savings account.

The most important thing is that even if he doesn’t achieve the target of qualifying for a third category to maximise the interest rates, he is not anywhere worse off post 1 May 2019. That is his main takeaway from the latest revision in the ever-improving DBS Multiplier account.

*This article is written in collaboration with DBS but the views are his own.*

eugene says

Hi, bonus interest for next $50k comes with 3rd and 4th catagories, right? If you can’t make it, you just earn 0.5% for the next 50K. in such case, i think it’s better to place the additional $50K to Maybank or SCB to earn 1.9-2.0%. am i right? thanks

Alison_Liew says

Hi Eugene,

You are right. This is the dilemma i am facing!

Tony Wee says

Why is the effective interest rate gap between the salary+2 and salary+3 category significantly wider since they are reflected as 3.5% and 3.8%? Are you using the max of $50k and $100k respectively?

Alison_Liew says

Hi Tony,

If you are referring to Diagram 4, i am using the entire $100K.

Stephen says

Provided you have another salary credited to another bank as there are also compulsory requirement to earn the bonus interest.

Alison_Liew says

Yes, salary crediting is compulsory. But if u have a joint account, 2 multiplier accounts can benefit from just 1 salary crediting.

Li Hong Tan says

Hi Alison, how do you use dbs vs uob one? Use uob for spending amd put 75k, And then combine both husband anr wife salaries to dbs multiplier?

Alison_Liew says

hi li hong,

i use both. my wife’s salary is credited to the joint account to benefit both dbs multipliers. i credit my sal to ocbc which gives the highest interest rate for that specific activity!

AT says

Hihi, how did you calculate the effective interest rates for salary credit +1 and +2 transactions? They seem really low compared to what was promised by DBS.

Alison_Liew says

Hi AT,

What I am showing is the effective interest rate based on the entire $100K in Diagram 4. As compared to Diagram 3, the first 2 columns show the effective interest rate for the first $50K only.

C Lim says

Hi Alison,

I have recently opened a joint account with my wife.

Officer mentioned that they no longer designate a primary ac holder (ie both ac holders are of equal standing)

I just want to confirm :

1) if only my wife’s monthly salary credit is to our joint DBS savings ac ;will it still work?

2)if we BOTH of us credit our salary to DBS,does it have to be credited into our newly opened joint-ac or any of our individual DBS/POSB ac will do?

Many thanks!

Alison_Liew says

Hi C Lim,

1) Yes it works. This is the current arrangement for myself too.

2) Individual account works but your multiplier does not capture the aggregated effect. if salaries are credited into the joint account which bears both your names, each of your multiplier will capture BOTH salaries.

so conceptually, just ask yourself if the account captures your name(s)?