SINGAPORE – DBS Bank on Monday (Aug 1) raised interest rates on its flagship Multiplier deposit account, in a first across-the-board move by a local bank to offer customers’ higher returns on their regular savings amid the rising rate environment.
Singapore’s largest lender increased rates for its Multiplier account by up to 0.8 percentage point, according to checks by The Straits Times on Monday morning.
With the bank’s latest move, Multiplier customers can now earn a maximum of 3.5 per cent per annum, up from 3 per cent previously, for balances of over $50,000 and up to $100,000.
UOB also increased rates on Monday on its One Account, but just for one new tier of balances and under a promotion that runs until the year end.
Customers can now earn 3 per cent interest on balances above $75,000 and up to $100,000 if they spend at least $500 on an eligible UOB card and credit their salary via Giro. This was up from 0.05 per cent previously for all balances above $75,000.
DBS had cut its Multiplier interest rates three times amid the Covid-19 pandemic, joining other local and global banks in doing so.
Its Multiplier account offers customers tiered interest rates on their account balances. Rates are higher if customers spend on larger amounts with DBS, and in more eligible categories that include spending with DBS/POSB credit cards, mortgage payments and investments.
To qualify for interest, customers must first credit an income stream to their Multiplier account and transact in at least one eligible category. An income stream is defined as salary, dividends or use of the Singapore Financial Data Exchange service to get a consolidated view of finances.
For example, if a customer credits an income stream and spends in one category for a total transaction value of at least $2,000 but less than $2,500 a month, the interest earned on the first $25,000 in the account is now 0.9 per cent per annum, up from 0.4 per cent previously.
Rates have been raised by up to 0.6 percentage point for spending in two categories, and up to 0.8 percentage point for spending in three or more categories.
Customers can visit this website for more information.
Mr Jeremy Soo, head of consumer banking group (Singapore) at DBS, said rising inflation and expenses continue to put a strain on customers’ finances and eat into their hard-earned savings.
“While the effects of inflation cannot be easily avoided, it is now more critical than ever for us to do all we can to collectively lessen the pain for our customers, especially those in the most vulnerable groups, by protecting their savings and growing their wealth,” he added.
Rates have been rising as the United States central bank tries to tame surging inflation. The Federal Reserve last week raised interest rates by 75 basis points for the second straight month and chairman Jerome Powell said a similar move was possible again this year.
Singapore’s domestic interest rates are largely determined by global interest rates and foreign exchange market expectations of the Singapore dollar. Rising rates also mean pricier loans.
Banks here have launched a series of fixed deposit promotions this year amid the rising rate environment, reported The Business Times. Unlike current or savings accounts, fixed deposit accounts require customers to “lock up” a certain sum for a fixed amount of time.