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Best bank to get interest on savings account ?

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sunbox
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Best bank to get interest on savings account ?

Postby sunbox » Sun, 09 Mar 2014 11:45 pm

There is surge in ads in papers from different banks, each boasting about thee best possible interest on savings accounts. Stan C seems to be attractive but has a condition to spend 500$ monthly to get the best possible interest rate. I would like to hear feedback from the members of this wonderful forum.

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Postby sundaymorningstaple » Sun, 09 Mar 2014 11:47 pm

Get PR and put it in CPF.

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Postby Strong Eagle » Mon, 10 Mar 2014 3:27 am

All the savings rates are so pathetically low, why even worry about it?

They range from 0.1 to 0.4 PERCENT per year for savings accounts, with special teaser rates of 1.1 percent for a time deposit of 12 months, normally 0.5 percent.

Put a thousand dollars in the bank, keep it there for a full year and earn one dollar, four dollars, maybe as much as ten dollars and ten cents on the time deposit account? Hardly buys a beer at a hawker center.

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Postby sunbox » Mon, 10 Mar 2014 8:44 am

Thank you SMS and SE. I agree CPF gives the best interest rate.

Here is the ad from Stan C which talks about getting 1.88% p.a

"Earn 1.88% p.a. on your savings for the first S$25,000 in your Bonus$aver account when you charge a minimum of S$500 based on transaction posting date."

Am I the only who is noticing sudden surge of full page ads in ST from different banks. Is there anything special that banks all of a sudden are trying to out-beat each other with best possible interest rate. Looking at the rate of interest rates here, India seems to be the best place to get interest on savings. An FD on parents name (Senior Citizen) easily give 11% p.a. Wondering if any other country or emerging country which beats this interest rate ?

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Postby Beeroclock » Mon, 10 Mar 2014 10:01 am

Looking at the rate of interest rates here, India seems to be the best place to get interest on savings. An FD on parents name (Senior Citizen) easily give 11% p.a. Wondering if any other country or emerging country which beats this interest rate ?


Please be careful as you need to consider exch rate risk too. To earn indian interest rate you need to convert your principal to INR. So you make a 10% interest rate differential but you are fully exposed to the SGD/INR (or whatever your base currency is).

E.g. Australia has been a past favourite for these "carry" trades, where funds flow in to capture the higher interest rates and hoping to gain extra on a stronger AUD too as an icing on the cake. However if you'd put SG$10000 into Australia a year ago at SGD/AUD 1.3 = AU$7,700. Would've earnt your 4.5% interest = $350. Now up to AU$ 8050. Converting back at todays SGD/AUD 1.15 gives you SG$9260. Outcome you ended up losing $750 or 7.5% of your money, instead of making 4% on the interest rate differential as you'd hoped !!

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Postby Beeroclock » Mon, 10 Mar 2014 10:13 am

sunbox wrote:Here is the ad from Stan C which talks about getting 1.88% p.a

"Earn 1.88% p.a. on your savings for the first S$25,000 in your Bonus$aver account when you charge a minimum of S$500 based on transaction posting date."
1.88% is about as good as you can get here, but note it applies only up to 25,000 and provided you spend the money on the attached card, so only a good idea if you are a disciplined type who will pay off the full balance each month on time. No point earning a 1.88% deposit rate only to pay them back 15+% credit card interest !!!

If you have bigger savings, there are other accounts you can seek out but still only 0.7% or thereabouts from what I can find.

Yes CPF is clearly best if you have access to it and don't mind it being locked away/restricted.

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Postby Wd40 » Mon, 10 Mar 2014 10:21 am

My base country is India, so I am not so much concerned about the FX risk, but inspite of that at the current rate of INR 61 per USD the INR already has all the negatives priced in it and the exports are booming. I even read an article that Bangladeshi garment exports are now feeling the heat due to cheaper exports from India, lol. So I dont see the INR weaking much more from here. Certainly not 9% a year against the USD.

1% interest rate in Singapore is nothing. 2% in CPF is also nothing. Might as well invest in High Yield bond funds from other developed countries you can easily get 5-10% per annum of relatively safe returns. Create a well diversified portfolio of Equity and bond funds. It will sure beat the 2% interest rate that you get in CPF, over the long term.

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Postby Beeroclock » Mon, 10 Mar 2014 1:38 pm

Wd40 wrote:My base country is India, so I am not so much concerned about the FX risk, but inspite of that at the current rate of INR 61 per USD the INR already has all the negatives priced in it and the exports are booming. I even read an article that Bangladeshi garment exports are now feeling the heat due to cheaper exports from India, lol. So I dont see the INR weaking much more from here. Certainly not 9% a year against the USD.

1% interest rate in Singapore is nothing. 2% in CPF is also nothing. Might as well invest in High Yield bond funds from other developed countries you can easily get 5-10% per annum of relatively safe returns. Create a well diversified portfolio of Equity and bond funds. It will sure beat the 2% interest rate that you get in CPF, over the long term.
wd40, cpf interest is 4% in special account and a bonus 1% on balance up to 60k, so might even be 5% depending your balance. It's not "nothing", about as good as it gets for savers who don't want any risk on their principal. very relevant for retirees with big deposit balances, 4% vs 1-2% can easily be the difference between being self-funded or not. Of course for someone in your circumstance mid 30's etc, it will be better to be take the risk and invest for higher long -term returns. But don't forget the retirees and risk-averse investors for whom these deposit rates make all the difference.

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Postby Wd40 » Mon, 10 Mar 2014 2:16 pm

Thanks Beeroclock, Yeah I had overlooked the special account interest rate. So its about 4% average interest rate which is pretty good. But then its a moot point as getting PR these days is like winning an oscar. If you are already a PR/SC then you have no choice you got to keep contributing to the CPF.

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Postby sundaymorningstaple » Mon, 10 Mar 2014 2:31 pm

I'm in the ongoing fight to have CPF contribution restored to it's former 20%:20% ratio of employee/eployer contributions and not scaled back for each side progressively due to age of the contributor.

You'll not find a better investment risk on risk, I don't think.

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Postby sunbox » Mon, 10 Mar 2014 2:35 pm

Thank you Beeroclock. INR is getting strong from past few weeks but with fed cutting stimulus, my guess it will get weak when FII's start pulling back their money. Its safe to keep money in SG till that time and YES, CPF is the only safest bet which makes sense if you want to earn interest.

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Postby Wd40 » Mon, 10 Mar 2014 3:13 pm

The steady fed stimulus wind down is now a known thing, its in the price. The biggest factor affecting the rupee is going to be the elections in India. If the BJP wins with a majority expect the INR to rocket to 55 per USD. But even if the elections outcome is not favorable, my expection is that it wont go below 65 in the worst case. I have converted all my SGDs @ ~49 INR per SGD and transferred to NRE account in India earning 9% tax free interest.

Inspite of the terrible depreciation of the INR since 2009 from Rs 33 to 1 SGD to about Rs 50 to 1 SGD, I have noticed that even if you had converted at 33 and the cumulative interest of 9% per annum, you still wouldn't lose a lot of money. But now given that the rupee fundamentals have improved significantly due to export competitiveness and reduce in gold imports, I dont see much downside in converting SGDs to INRs at this rate.

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Postby Beeroclock » Thu, 03 Apr 2014 5:23 pm

Just seeing this ocbc 360 account, it seems a decent deal offering up to 3.05% on balance up to SGD 50k. But a lot of criteria to meet to get the bonus interest - $400 credit card spend plus salary direct credit plus 3 GIRO bill payments (1% for each of the criterion). Anyhow if you have SGD50k savings seeking a decent interest it might be worth the effort for $1525 p.a. interest, at least it will cover more than a few hawker centre beers :wink:

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Postby x9200 » Fri, 04 Apr 2014 8:41 am

I am with OCBC for well over a decade but recently the quality of their services dropped below the level I am willing to accept. I am looking for another bank to host all the basic services and where my salary is going to be paid.

What I would like to have:
- reliable Internet banking (IB)
- cards and such fully integrated into IB
- TT available from within IB
- reliable and responsive customer service
- cards working overseas and in on-line purchases

I don't care too much about:
- ATMs (I hardly use cash for any payment)

Things like rewards etc. in neutral but nice to have.

I prefer not: DBS/POSB, HSCB

City? SC? UOB? Any other? Recommendations welcomed.

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Postby Brah » Fri, 04 Apr 2014 9:11 am

x9200 wrote:I prefer not: DBS/POSB, HSCB


Can I ask why?


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