Saturday, October 13, 2012

OCBC Bonus Plus Savings Account

Watch your savings grow faster with higher interest rates

I was surfing OCBC website and the tag "Earn up to 1.18% a year when you deposit $10,000" caught my eye.  I followed the click through link and was brought to the OCBC Bonus Plus Saving Account page.

Here's how the account works:
  • The account is a statement savings account with monthly statements availed.
  • An initial deposit of S$10,000 is needed with no monthly minimum balance requirement.
  • Singaporeans, Singapore Permanent Residents and Foreigners age 15 and above are eligible.
  • The base interest rate is 0.2% p.a.
  • Monthly bonus of 0.25% p.a. will be given if there is no withdrawal within the calendar month.
  • Quarterly bonus of 0.73% p.a. will be given in the third month if there is no withdrawal within the calendar quarter.
  • Base and bonus interest will be credited into the account on the first business day of the following month.

Curious on the average interest rate, i computed the interest amount an accountholder would earn based on a S$10,000 deposit for a full 12 calendar months.

Average interest earned:
Month Interest (% p.a.) Interest Earned (S$)
1 0.45 3.75
2 0.45 3.75
3 1.18 9.84
4 0.45 3.76
5 0.45 3.76
6 1.18 9.86
7 0.45 3.76
8 0.45 3.76
9 1.18 9.87
10 0.45 3.77
11 0.45 3.77
12 1.18 9.89
69.55

Effectively, the accountholder would earn S$69.55 over a one year period which translates to an average interest rate of 0.6955% p.a.

Seems like i would be better off by putting S$10,000 into the CIMB SGD Step Up Fixed Deposit and earning S$105 interest (i.e. average interest rate 1.05% p.a.) instead.

3 comments:

  1. I was taken in by the "promotion" and the "1.8%" interest. I thought that as long as no withdrawls took place for the the entire year an interest of 1.8% was payable. Stupid me for not understanding how the scheme worked. Thanks for the information.

    ReplyDelete
  2. actually for the CIMB account you recommended, must there be a monthly amount deposited into the account in order to earn the maximum interest possible?

    ReplyDelete
  3. This is really nice post about the saving account.Actually i heard first time about CIMB but i really got a lot of information about it from your post thank you so much for sharing such a nice post with us.

    ReplyDelete