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OCBC's 360 account ties bonus interest to investment products
FROM May 1, OCBC will pay a maximum of 3.25 per cent interest annually on up to S$60,000 held in its customers' 360 accounts, as it tries to lock them in further with the sale of investment products.
Its 360 account works by layering different bonus interest rates, based on the transactions and dealings that customers have with the bank.
This savings account offer remains top in its interest rate offering, though the fresh announcement this week comes as OCBC also tightened terms linked to bill payments and credit card spending - a year after the bonus interest was introduced.
The most basic criterion is to have customers credit their salary into their accounts.
From Friday, this will now yield an interest rate of 1.2 per cent, up from one per cent, OCBC said. The maximum account balance that can earn the bonus interest rate has also been raised to S$60,000 from S$50,000 currently.
To earn another one per cent per year, customers will have to buy eligible financial products such as endowment plans, unit trusts or structured deposits. Eligible endowment plans must have at least S$8,000 in annual premium, while the amount invested in unit trusts or structured deposits must be at least S$40,000.
It will also pay for the extra monthly savings by 360 account holders. Customers will earn another bonus interest of one per cent per annum on the increase in balance from the previous month. There is no minimum incremental amount, while the maximum is capped at S$1 million per month.
OCBC has cut the bonus interest attached to the payment and credit card spending criteria by half, to 0.5 per cent per category. It also upped the monthly minimum spending on OCBC credit cards to S$500 from S$400. The base interest for the account stays at 0.05 per cent.
This comes as data shows that "Singaporeans do not save and invest enough for their retirement", said Ling Seng Chuan, head of deposits at OCBC. He added that the strong demand for this product came from the "emerging affluent customers" who sought higher interest rates on their main operating account.
OCBC, which had the smallest Sing-dollar deposit base among the three domestic banks at the end of last year, began offering the 3 per cent bonus interest from April 2014. Within nine months, OCBC signed up 34,000 new customers, it said.
DBS, through its multiplier account, offers a 2.08 per cent per annum interest for accounts that have a total monthly cash flow of at least S$20,000. This includes monies coming in - through the customer's salary and also investment dividends - and funds flowing out through credit card spending, and mortgage instalments. DBS's offering is capped at S$50,000 in the account.