[OCBC 360 Revised Rate of interest – 1 November 2021] Here's What (Or Less) Customers Will Be Getting

Since May 2021, OCBC has revised the interest rate of its popular OCBC 360 savings account thrice.

The latest revision, that takes into impact on 1 November 2021, allows customers to earn more interest as long as they satisfy the revised criteria that's been set. However, the natural question on existing customers thoughts are, am i going to be earning pretty much interest?

The response to this question depends very much how much you currently have in your account

Previously, to earn bonus interest, account holders have to fulfil the following criteria.

Before 1 November 2021: Assuming Account Holder Has $70,000 In Savings

There were also two additional criteria that permitted you to earn bonus interest on your account.

Wealth – Insure or invest with OCBC. Earn 0.6% or 1.2% for Twelve months, depending on the qualifying amount.

(In our opinion, we do not think it makes any sense to purchase a new product just to earn bonus interest on your savings for 12 months. However, should you already intend to buy a product, sure, benefit from the bonus interest. However, this ought to be an afterthought as opposed to a key comparison feature)

Save– Earn this 1% extra bonus on the first S$70,000 in case your account balance is S$200,000 and above.

(However , in order to earn an extra 1% bonus interest on our first $70,000, we first need an account balance of $200,000. This implies that while we enjoy a higher interest on our first $70,000, it's also offset through the lower interest we receive for the remaining $130,000, thus reducing the overall effective interest rate)

1 November 2021 Onwards: Assuming Account Holder Has $70,000 In Savings

If you're confused, you can make reference to the table below from OCBC.

There are some things worth noting.

Firstly, the highest effective interest rate that the individual can earn is 3.2% p.a. However, this is only achievable if three separate conditions are simultaneously met.

1) Account holders should have $70,000 in their savings. For other figures, effective interest rate will be lower. This is because there's a different tier of bonus interest given for the first $35,000, along with a higher tier of great interest given on your next $35,000.

2) You have to invest or insure with OCBC in the last 12 monthsin to generate the bonus interest from 'Wealth'

3) 'Step-up' interest is just a little challenging calculate from the theoretical standpoint.This happens because in order to earn the interest, you will have to increase your account balance by $500 compared to the previous month. However, when we think that an account holder commences with $70,000 (the perfect amount) in his/her account, adding $500 more each month will allow the person to generate the 'Step-up' interest. However, the extra amount in the person's account (above $70,000 now) won't earn bonus interest and therefore the general effective rate of interest will be lower.

Then & Now – Ignoring Bonus Interest For 'Wealth' & 'Step-up'

For a far more realistic comparison, let's ignore the bonus interest from 'Wealth' and 'Step-up'. Quite simply, we are let's assume that an account holder doesn't buy an OCBC related product over the past Twelve months, and is not actively seeking to increase his/her savings by $500 more every month.

Guess what, the numbers works out to become the identical!

Previously, account holders will earn 1.85% per year if they 1) credit their salary, 2) pay three bills online and 3) spend no less than $500 on their own OCBC charge cards. This is applicable regardless of the amount they have within the account.

Moving forward, account holders can generate the same 1.85% by 1) crediting their monthly salary and a pair of) spending no less than $500 on their own OCBC credit cards.

They no more need to pay three bills online. However, in order to generate the same 1.85% p.a, they now need to have $70,000 in savings. Otherwise, their effective interest rate will be lower.

Let's tell you another scenario, where a merchant account holder has $35,000 in their OCBC 360 account.

Effective interest rate has become lower at 1.55% p.a. That is because we no more enjoy an additional 0.3% for paying three online bills through our OCBC 360 account. At the same time, account holders who've $35,000 do not receive the higher tier interest which is given on the next $35,000.

To sum it up, whether you are likely to earn higher or lower interest greatly depends 1) how much you've in your checking account and a pair of) whether you are likely to increase your savings by $500 more each month, and/or will be investing or buying an insurance plan through OCBC.

We hope this short article helps you in making the very best decision on whether the OCBC 360 account is sensible to work with.

If you are searching for the very best checking account in 2021, you can read our guide to the very best checking account for working adult in 2021.