OCBC 360 Savings Account has made its 4th major change in 5 years. Heartland Boy knows that you are probably getting change fatigue by now, especially if you are one of those early adopters back in 2014. However, hear him out (i.e. read this article) as there’s only good news to share this time round. That’s right, savers should rejoice as OCBC has handed out goodies without taking anything away. Yes, OCBC 360 Savings Account changes yet again, but for the better this time round.
Effective Salary Bonus Is Now 1.6%
From 1 April 2019 onwards, the Salary Bonus interest for account balances between $35,000 to $70,000 will earn 2% interest rate. This is an increase from the previous promotional interest rate of 2.0% for the same tier. OCBC has simply made this benefit permanent after noticing good feedback. Coupled with 1.2% interest rate awarded to the first $35,000, OCBC 360 Savings Account provides an effective interest rate of 1.6% just for salary crediting. Yup, you get 1.6% interest rate on the first $70,000 of your deposits when you simply credit a salary of at least $2,000 through GIRO. That one activity nets you $1,120 of passive income per annum as shown in Diagram 1.
This makes OCBC 360 Savings Account the best place to credit your salary as an effective interest rate of 1.6% is unparalleled in the market at this juncture. Heartland Boy has emphasized time and again that salary crediting is so precious that it should be treated as a cherished commodity. Therefore, OCBC 360 Savings Account gets his vote for salary crediting, and he is glad that he has not closed his OCBC 360 Savings Account previously. He simply emptied his account the other time and retained the minimum balance that would not incur fall-below penalty fee.
Realistic Interest Rate of OCBC 360 Is Probably 2.1%
Besides crediting your salary, the other activity that has the lowest barrier to entry is most likely credit card spend. If you spend $500 on any OCBC credit card per calendar month, you would get another 0.45% on the first $70,000 of your deposits placed at OCBC 360 Savings Account. If you have difficulty meeting the minimum spend on your credit card, this article might be useful to you.
If you successfully meet the credit card spend criteria, the total interest rate on the first $70,000 in your OCBC Savings Account would be a decent 2.1% as shown in Diagram 2. This equates to $1,470 of passive interest income per annum on a deposit base of $70,000.
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How This Has Changed Heartland Boy’s Savings Account Strategy
While the change is positive for customers of OCBC 360 Savings Account, it has not altered Heartland Boy’s high-yield savings account significantly. Diagram 3 shows the list of high interest rate savings account that he uses and the interest rate that he typically gets in a month. Do note the maximum amount (Column 2) of each savings account that are eligible for their respective bonus interest rates. These bonus interest rates are derived from the online calculator of the banks’ websites by imputing Heartland Boy’s household spending consumption patterns.
Here is a quick summary of his current savings strategy:
- The Citibank MaxiGain Savings Account is a place where Heartland Couple stash their emergency funds as withdrawals would cause the interest rate to drop. This is for the rainiest day ever and Heartland Boy hopes that they never have to touch it.
- UOB One Savings Account is Heartland Boy’s savings account where his war chest for stock investments are stored.
- The DBS Multiplier serves as a joint account for the Heartland Couple to meet their active household spending needs.
- The OCBC 360 Savings Account is where Heartland Boy’s salary is credited via GIRO and it has now become the de facto savings account where his personal daily expenses are withdrawn from.
Concluding Thoughts On OCBC 360 Savings Account
Heartland Boy guessed this is a defensive move by OCBC 360 against popular hurdle accounts that have improved in the recent years. This is a positive change, so there is really nothing to complain about. Heartland Boy urges all to take note of this change and review holistically how it will impact your own high-yield saving account strategy!