Here's Why The UOB One Account Could Be The Perfect Checking account For all those In The Gig Economy

By now, the majority of us would already be familiar with the importance of using a good savings account that may earn us high interest on our savings. With several such options in the market, earning interest of 0.05% per annum (p.a.) on our savings and emergency funds just shouldn't cut it anymore.

As you might know, most high rate of interest savings accounts in Singapore usually require us to meet certain criteria to be able to earn bonus interest. One of the most common requirements of these savings accounts would be to credit our monthly salary, usually also subjected to a minimum of $2,000, via GIRO.

While it may be easy for a lot of salaried employees to get their HR departments to get this done, those without traditional jobs or fixed monthly salaries may be discouraged by this barrier.

That's because 1) we may not receive our income at regular intervals and 2) even when we do, our payment is going to be by means of a (or multiple) cheque(s) or bacs(s), as opposed to a single salary deposit via GIRO.

Due for this, workers in the gig economy (i.e. freelancers, self-employed) will find it very difficult to earn this bonus interest from their savings accounts on a regular basis.

Aside from resigning themselves to paltry interest returns, what else can this seemingly ignored segment of people do? Fret not! Enter: the brand new UOB One Account.

The UOB One Account

For the past few years, the UOB One Account has been one of the most popular high interest savings accounts in Singapore. Financial bloggers such as HeartlandBoy have written extensively about how exactly it works, and how they've personally leveraged on their accounts to good effect. It was before its most recent update, where UOB revised its rate of interest upwards, beginning with 1 August 2021.

Another highlight of the UOB One Account that was not discussed much is how it may easily be the perfect checking account if you are employed in the gig economy.

As explained, most freelancers and self-employed individuals might not be in a position to enjoy the UOB One Account to full effect, as they rarely earn a stable or regular monthly pay cheque like the majority of the working population do. This segment of workers typically includes freelance writers, designers, entrepreneurs, realtors, financial advisors, drivers and of course, just about anyone who is self-employed.

To understand why the UOB One Account can be useful for them, we have to first understand the bonus interest structure for the UOB One Account.

Source: DollarsAndSense

If you are an existing UOB One Account user and therefore are confused over why the figures look different from what you're accustomed to, that's because UOB has adjusted their rate of interest upwards. You will get more information on its latest changes here.

An individual with savings of $75,000, and that can meet both criteria (minimum spending of $500 plus three GIRO payments each month), now stands to earn annual interest of $1,827, or an Effective Rate of interest (EIR) of two.44%.

Firstly, to be eligible for a bonus interest, you need to acquire a minimum spend of at least $500 on your UOB One Card (which by itself, is a great card to own anyway based on the reviews from your readers) and/or other selected UOB cards. After you have done that, you'd have met the very first criteria for bonus interest.

In to earn the second tranche of bonus interest, you have two options.

Option A: Pay three bills monthly via GIRO

or

Option B: Credit your salary (minimum $2,000) via GIRO

For most folks, including freelancers and self-employed individuals, spending no less than $500 on their UOB One Card and paying three bills monthly via GIRO (Option A) ought to be relatively achievable.

All you need to do is to think about the numerous bills and recurring expenses you need to fork out for every month. These can easily equal to over $500 each month, and may include:

> Utility Bills (e.g. SP services)

> Membership subscriptions (e.g. Netflix, Spotify, gym membership)

> Telco bills (including broadband and cable TV)

> Petrol (payable via Credit Cards)

> Transport (e.g. Grab, cab rides) (payable via charge cards)

> Groceries (payable via charge cards)

Your Salary Might not be Fixed, But Your Expenditures Are

While a regular monthly income that is stable and regular isn't guaranteed for those in the gig economy, your monthly expenses, if managed correctly, usually are.

Even when your salary is lumpy, depending on how quickly you'll be able to clinch and complete projects, what you bring in on a yearly basis and also have in savings should be able to meet your monthly recurring financial commitments.

By allowing customers to earn bonus interest on their savings based on meeting an expenditure criterion, the UOB One Account gives freelancers and the self-employed a good way to obtain a bit of the experience, without needing a set monthly salary. The interest, which could easily be a lot more than $1,000 a year with respect to the level of savings that you have, could be valuable in providing you with the extra cash that you need.

Emergency Savings To Tide Yourself Through Difficult Income Months

One of the things that lots of people overlook, unless they have experience being a self-employed individual or freelancer, is just how challenging it may be to manage your individual cash flow, especially when you have to manage the inflow as well.

Since income can be lumpy with this segment of workers, among the best steps you can take on your own (and your career) would be to ensure that you keep a sizeable degree of emergency cash to tide you through challenging periods where cash inflow may be tighter.

For example, we encourage the average individual to possess at least six months of monthly expenses in emergency savings. If your household expenditure is $3,000 per month, you should try to have a minimum of $18,000 in emergency savings.

For freelancers and self-employed individuals, using a larger buffer is important. There might be periods where your career/business may require you to definitely use your reserves for support and also you do not want to be caught unawares.

For example, if your laptop suddenly breaks down, you may need to pay out near to $3,000 in a very small amount of time to purchase a replacement so that you can resume working. This is where using a strong and liquid emergency fund will be handy.

With the UOB One Account, you can count on these funds still being able to earn good interest.

Of course, this isn't to say that regular people that earn a set, stable salary cannot make use of the UOB One Account either. They still can, along with the rate of interest that is being paid, it is a naturally good account to become using. On top of that, you can earn this high interest on your UOB One Account without needing to credit your monthly salary for this account.

Special UOB Promotion

Get $100 whenever you subscribe to the UOB One Account online today!

As part of their Nation of Savers campaign, if you do not have an existing UOB Current/Savings Account with UOB, you can get $100 to begin your savings by simply opening an account online with UOB. This promotion applies from 16 July to 31st August 2021 and limited to the first 53,000 new account sign ups only.