OCBC has just announced new updates to the bonus interests offered in their OCBC 360 accounts. You can read the details below but in short, it’s bad!
The OCBC 360 account is a textbook case of showing how many hoops consumers would jump through for bonus incentives. It’s a win-win situation for both consumers and OCBC because the account provides the highest interest rate for consumer banking in exchange for the large amounts of bank deposits that consumers keep with the bank. I just don’t understand why OCBC would want to kill the golden goose.
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What are the changes and how does it affect me?
The biggest impact to me would be the reduced interest rates for payment bonus interest because it was the easiest way to earn a good 1% interest per annum by simply changing my bill payment habits to making it online through OCBC’s online banking platform. It’s such a shame that the interest would be halved from May onwards.
The next bonus interest rate to be reduced was credit card spending. I had to make significant changes to my spending habits to ensure that I clocked at least $400 on my credit card instead of paying everything with cash. A 1% interest was enticing enough for me to do this but I can’t say the same for half the interest rate. The increase in minimum credit card spending amount from $400 to $500 only made things worse.
The only bonus interest that OCBC left untouched was salary bonus. That didn’t help me at all because OCBC only qualifies salary credits with the description, “GIRO – SALARY” and all other forms of salary credits will not receive the salary bonus. Unfortunately, the salary credit method used by my employer does not qualify for the bonus interest.
The effective interest rate that I will be receiving in my OCBC 360 account from May onwards would be reduced from 2.05% to 1.05%. Boo!
What I plan to do to my OCBC 360 account
Truth be told, switching from POSB to OCBC 360 account showed me how a good online banking platform should be like. I hate to close that account down if I didn’t have to, but OCBC is forcing my hand here.
The ability to set up sub accounts for Saving Goals is a life-saver for financial budgeting. I could use this feature to set up automated contributions to my Saving Goals each month to ensure that I pay myself before paying anyone else. Once the money has been moved to a Saving Goal, it can’t be withdrawn from the ATM unless I move the money out of the Saving Goal. As these sub accounts are simply virtual accounts within the OCBC 360 account, I would still be able to benefit from the high interest rates of the OCBC 360 account.
In the mean time, I will be looking at the saving account options offered by other banks in Singapore to see if it is worth switching to another savings account. The Standard Chartered Bank Bonus$aver account is one of the options that I will be exploring as they offer $1.88% interest rate for theirBonus$aver accounts as long as the account holder charges at least $500 on their Standard Chartered credit card.