Ever heard the saying “Cash is King”? We know that it’s important to keep some cash on hand for rainy days (at least 3-6 months is the norm), but where is the best place to store this money and still get a decent return?
Savings accounts are not just a secure place to store your hard earned money, in fact as our population continues to grow much more financially savvy, savings accounts that offer higher tier interest rates also provide a way to grow your cash with very low risk.
This is why I am of the view that one should strive to maximum their , before looking for elsewhere to invest their monies in.
Check out our guide for the best high-interest savings account for self-employed persons which especially if you are having problems trying to hit he salary criteria for higher interest rate tiers!
If your savings account is offering you a rate of 5% interest per annum, would you rush to buy T-bills at 4%?
A Personal Anecdote
Treasury bills where all hype at the start of 2023 due to rising interest rates. I had a friend who was super-stressed out on the application for T-bills which where offering at a rate of roughly 3-4%. The thing is, if she had actually kept the money in her UOB One account, she could have enjoyed an even higher rate of interest!
When it comes to your money, it’s important not to rush based on the trend but to make a thorough assessment before making important financial decisions.
Best Savings Accounts in Singapore with Highest Interest Rates
| Savings Account | Interest Rates | Max Deposit (for highest interest) | Effective Rate (on Max Deposit) | Conditions |
| UOB One | Up to 7.80% (on next $25,000 after depositing $75,000) | $100,000 | 5.00% | Good for self-employed (unable to credit salary) |
| OCBC 360 | Up to 7.65% EIR (on first $100,000) | $100,000 | 7.65% | Must hit salary + save + spend + insure + invest for max rates |
| DBS Multiplier | Up to 4.10% (on first $50,000 – $100,000) | $100,000 | 3.61% | Must credit salary or connect SG FIndex |
| Standard Chartered Bonus Saver | Up to 7.88% (on first $100,000) | $100,000 | 7.88% | Must spend more on cards to enjoy higher interest |
| CIMB FastSaver | Up to 3.50% | No cap | 3.50% | |
| Citi Wealth First Account | Up to 7.51% (on first $50,000 – $150,000) | $50,000 | 7.51% | Need to have investment + insurance + home loan to maximize interest |
| Maybank Save Up | Up to 4.30% (on first S$75,000) | $75,000 | 3.08% |
Note that the effective interest rate (EIR) in this table is calculated on the maximum deposit amount illustrated and assuming that all other conditions are met to hit the highest tier for that account. Your individual situation is likely to vary from this, hence it is highly suggested that you work out the EIR for yourself based on your financial position.
Whilst earning the highest EIR is often a strong factor in deciding which savings account to choose, you should also pay close attention to factors like the ability to credit salary to the bank account, any investment/insurance requirements as well as your total amount of savings which will ultimately affect your final interest earned.
What Factors to Consider For Your Savings Account?
The Chinese have a saying “钱生钱”, which translates to “money grows even more money”. We all want to maximize the interest rates in our savings account so as to continuously compound our wealth in a safe and low-risk environment.
There are several important factors that may be overlooked when opening a new savings account.
What is the Effective Interest Rate (EIR) for the Savings Account?
Watch out for the marketing lingo of banks. Alot of them use terms like “up to 7.5% interest” to get your attention, but often it refers to only a portion of the full deposit sum.
What you need to be looking at is the effective interest rate (EIR) that will be paid out on your principal.
Here’s an example of how to calculate effective rate using the example of UOB One savings account.
If you have $90,000 and meet all the criteria for the highest tier, it does NOT mean that you are earning 7.80% interest on the full $90,000. Instead the interest is applied to each block of
So the total interest you would earn in this case would be:
Interest Earned = [$30,000 x 3.85%] + [$30,000 x 3.90%] + [$15,000 x 4.85%] + [$15,000 x 7.80%] = $4,222.50
EIR = $4,222.50 / $90,000 = 4.69%
How much savings do you currently have?
In the above example of UOB One, you can see that the interest rates come in different tiers based on how much your total deposit sum is.
Knowing how much savings you have on hand right now will help you to make proper calculations.
Look out for accounts that have different tiers for the total deposit amounts to identify which bracket you fall under and you can make the proper EIR calculations for comparison.
Can you meet the eligible activities to get higher tier interest?
Most savings accounts have a set of eligible activities that you will need to complete in order to reach the higher tiers of interest rates. These could be:
- Crediting your salary
- Increasing your average daily balance each month
- Spending a minimum amount using their bank approved cards
- Purchasing insurance from them
- Buying a investment product from the bank
You may be sold with the high interest rates of a particular savings account, but if you are unable to meet the salary requirements then the effective interest rate might plummet drastically.
Why you should optimize your high-interest savings accounts before investing in the stock market
All investments involve risk, and even a relatively “stable” index like the S&P 500 at a 8-10% average yearly return is not without it’s up and downs. An average of 8% a year does not mean that you are guaranteed to make that amount, in fact there might be years where the market crashes and returns may be negative.
In contrast, interest from savings account are almost guaranteed (short of a banking crisis in Singapore). But not all savings accounts are the same, which is why it’s good to make a fair comparison to see which account will give you the highest interest based on your current situation.
1. OCBC 360 Savings Account – Highest EIR of 7.65% if you buy insurance and an investment plan with them
OCBC 360 currently boasts one of the highest effective interest rates on the market at 7.65% which is applicable to your first $100,000.
The base interest starts at 0.05% p.a. and you are awarded bonus rates for meeting the following eligible activities. Here’s a breakdown of your EIR on the first $100,000.
- Salary + Save: You will earn a maximum EIR of 4.05% a year.
- Salary + Save + Spend: You will earn a maximum EIR of 4.65% a year.
- Salary + Save + Spend + Insure / Invest: You will earn a maximum EIR of 6.15% a year.
- Salary + Save + Spend + Insure + Invest: You will earn a maximum EIR of 7.65% a year.
Whilst a EIR of 7.65% is definitely one of the highest in the market, not everyone can manage to complete all of the eligible activities required to maintain that rate.
Understandbly, many people may already have purchased insurance with other third-party agents and have investments elsewhere which might make it difficult to fulfill these additional requirements that OCBC 360 requires to earn the highest tier interest.
If we were to remove the more complicated requirements like insure and invest, the EIR you would earn is still a very decent 4.65% on $100,000.
However if you are unable to meet these 2 components, then perhaps UOB One might be an alternative that offers a higher EIR of 5% without needing you to insure or invest.
2. UOB One – Easy to hit EIR of 5%, Good For Self-Employed and Freelancers
UOB One savings account is a very popular account because it offers a relatively high interest rate that is easy to hit. Whilst the marketing collaterals highlight a bold “up to 7.8%” interest, this increased rate only applies on the last $25,000 that makes up $100,000 in the savings account.
The effective interest rate on $100,000 is actually 5.0% which is still one of the highest amongst the big banks.
To enjoy the highes-tier interest you will need to meet the following criteria:
- Credit your salary to your UOB One via GIRO or PayNow
- Spend at least $500 per month on an eligible UOB Card
These categories are relatively easy to hit compared to the requirements for other bank accounts.
🤵 The Best Savings Account for Self-Employed & Freelancers?
For self-employed persons you are facing problems getting higher tier interest rates from banks because of the salary requirement, you can actually credit your own salary via PayNow option for UOB One. You can read a more comprehensive comparison of the best bank account for self-employed and freelancers here.
| Account Monthly Average Balance | (A) S$500 spend per month on eligible UOB Card | (B) S$500 spend per month on eligible UOB Card + 3 GIRO/PayNow debit transactions | (C) S$500 spend per month on eligible UOB Card + credit salary via GIRO/PayNow |
| First $30,000 | 0.65% | 2.50% | 3.85% |
| Next $30,000 | 0.65% | 3.00% | 3.90% |
| Next $15,000 | 0.65% | 4.00% | 4.85% |
| Next $25,000 | 0.05% | 0.05% | 7.80% |
| Above $100,000 | 0.05% | 0.05% | 0.05% |
Depending on how much savings you are actually planning to keep in your bank account, you can calculate your EIR using the table above.
The UOB One savings account is a great way to easily enjoy high interest rates without having to worry about hitting any difficult eligibility requirements like monthly investments or insurance.
3. DBS Multiplier – Competitive EIR of 4.10%, Must Be Able to Credit Salary
For working people that receive a stable salary credited to their bank accounts each month, and can meet 3 out of the 4 categories, DBS Muiltiplier offers a competitive effective interest rate of 4.10%.
Eligible Categories
- Credit card spending
- Home loan instalment
- Insurance
- Investments
| Income + 1 Category | Income + 2 Categories | Income + 3 Categories | |
|---|---|---|---|
| Total Eligible Transactions per Month | First $50,000 balance | First $100,000 balance | First $100,00 balance |
| $500 to <$15,000 | 1.80% | 2.10% | 2.40% |
| $15,000 to <$30,000 | 1.90% | 2.20% | 2.50% |
| $30,000 onwards | 2.20% | 3.00% | 4.10% |
However compared to both UOB One and OCBC 360, the EIR for keeping your money in DBS Multiplier falls slightly short at 4.10%.
DBS Multiplier is also pretty strict on the crediting of your income requirement, so if you are unable to meet this requirement then it would make sense for you to check out the savings account in other banks as you will only earn the lowest base interest tier.
4. Standard Chartered Bonus Saver – Highest EIR 7.88%, For High Spenders
This savings account actually boasts the highest EIR in the market of 7.88% if you are able to hit all the eligble categories. It’s actually geared towards people that spend a lot on their cards every month (> $2,000) to hit the highest interest tier.
If you’re a high spender (and earner) then this savings account is for you!
Eligible Categories (must hit all to get highest interest rate)
- Spend – must spend more than $2,000+ for the highest tier
- Salary – Must credit salary of S$3,000 or more
- Invest – buy eligible products
- Insure – buy eligible products
- Bill Payment – at least 3 bill payments
My personal take is that spending $2,000 or more on cards every month is abit of a stretch for most people. Also do take note on the Salary Credit portion as your salary needs to be more than S$3,000 every month (assuming CPF contribution of 20% employee + 17% employer, then your actual salary must be $4,478).
You also have to by investment products and insurance products from the bank in order to maximize your rates, which may not be the most feasible for most people.
Which Savings Account Offers the Highest Interest Rate?
As we have mentioned, the actual effective interest rate varies greatly depending on whether or not you are able to hit the different eligiblity criterias for each savings account.
In my opinion, UOB One is the easiest account to have because you do not have to worry about hitting all the insurance and investment categories whilst you can still earn a very good EIR of 5.00%. It is also a great option for self-employed and freelancers that are unable to have the typical salary credit into their account monthly as it allows for PayNow.
If you are able to budget for an additional insurance and/or investment portion every month, then OCBC 360 gives the highest EIR at 7.65%.
At the time of writing Standard Chatered Bonus Saver offers the highest EIR in the market of 7.88%, if you are able to hit all of the criterias mentioned above. The Spend category of $2,000+ is pretty high though, and if we reduce it to $500 to $1,999, the EIR drops to 7.13% which is actually lower than OCBC 360’s 7.60% EIR.
When it comes to the highest effective interest rate and ease of hitting interest rate tiers, DBS Multiplier honestly falls short of the other banks. I suspect that part of the reason why they do not need to offer such competitive rates is because they are already the most established bank in Singapore and their reputation precedes them.
I have a number of friends who despite acknowledging that DBS gives the lowest interest rates, still swear on only keeping the main bulk of their cash in DBS because it will “never fail”.
Ultimately whichever bank you decide to choose, make sure to pay close attention to the EIR that you will receive instead of the marketing lingo! Also consider whether or not you can actually hit required criteria for the high interest rate tiers!
Do note that all the calculations above are made with a sum of $100,000 and the EIR may change accordingly if you have lesser savings!
if you know anyone who is looking to open a savings account or wants to maximize their interest rates earned, share this article with them!