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UOB to make second cut on rates on flagship savings account this year
UOB has joined its Singapore banking peers in deepening cuts to interest rates tied to flagship savings accounts, reflecting the prolonged low-interest rate environment.
Singapore's third-largest retail bank will from Aug 1 lower all rates on its UOB One account for account balances up to S$75,000. This will come two months after an earlier round of rate revisions in May.
It notified customers this week, as did DBS on reducing rates on DBS's Multiplier account.
The UOB One account offers customers tiered interest rates that are stepped up as customers grow their account balance as well as meet the minimum card spend and transact more with the bank. The bank tiers rates on its UOB One Account by attaching a higher rate per subsequent increment of S$15,000 in the account balance.
For customers that meet the minimum card spend of S$500 per month, interest payouts for account balances up to S$75,000 will be slashed to 0.25 per cent per annum, compared with the prevailing rate of 0.5 per cent per annum.
Customers who meet the minimum card spend and credit their salary or make three GIRO debit transactions will see cuts on rates that are stepped up per S$15,000-tier.
As an example, interest earned on the first S$15,000 will be reduced to 0.75 per cent per annum from the current 1.25 per cent per annum. For customers in this category, interest earned on the next S$15,000 will be cut to 0.85 per cent per annum, from the current 1.3 per cent per annum.
This means that the maximum interest earned on a balance of S$30,000 will be S$240 per annum, from Aug 1.
There will be no change to the qualifying criteria for bonus interest on the UOB One account. The interest rate of 0.05 per cent per annum for balances above S$75,000 will also remain.
UOB said in a statement on its website: "Given the prolonged impact of the Covid-19 pandemic, countries around the world are anticipating economic contractions and central banks have kept their interest rates low to provide support to the economy. As a result, the low interest rate environment is expected to remain for some time."
On Wednesday, Singapore's largest bank DBS announced plans to cut rates on its flagship Multiplier account for the second time this year. Its latest changes will affect interest rates that are applied to account balances of up to the first S$50,000 from Aug 1.
OCBC and Standard Chartered have also cut rates on their respective flagship savings accounts as at July 1. OCBC earlier made tweaks to its OCBC 360 account in May.