Monday, May 8, 2017

1.28% Savings Account?

Wa, 1.28% is not bad. Actual link is here. Let's look at the details:
  • Initial deposit of $1,000- $5,000
  • Monthly GIRO of $200 - $10,000
  • Interest rate for first $200,000 balance
  • No restriction for withdrawal
Questions that need to be answered, but with no information:
  • What is the minimum bank balance?
  • Is there a fall-below fee?
  • How is the GIRO set up? Authorization to SIF to deduct from your appointed bank?
  • *BONUS* Will this GIRO be considered as a GIRO transaction by your appointed bank?
  • *BONUS* How MANY GIRO deductions can be set up? ie. Can 1 SIF account be used to GIRO in money from multiple bank accounts?
This looks quite enticing. Current market competitors are CIMB FastSaver (1%, minimum $1,000 deposit) and Citibank Maxigain (0.75% - 1.95%, minimum $15,000). As a pure savings-only account, either for emergency or general savings, these 3 accounts are pretty good.

If you have a small sum and you can't spare a $200 GIRO, go for CIMB and get 1%
If you have a small sum and you can spare a $200 GIRO, go for SIF and get 1.28%
If you have a large sum and you are okay to wait, go for Citibank and get 0.75% that will roll up into a very formidable 1.95%

Personally, I like seeing that consumers are getting good options. Personally, I use CIMB FastSaver for money that I think I might need to withdraw soon, while the rest of my emergency fund is nicely sitting in Citibank MaxiGain, getting 1.65% as of last month.

With OCBC being such a bitch for dropping their 360 interest rates, Citibank looks set to be the contender for their money. Once I max out at 1.95%, there is no reason to fulfill any criteria with OCBC anymore, since throwing it all into Citibank would yield me even higher interest and with no hoops the jump.


  1. The main problem will be the review on 1st Jul 2017. Hopefully it will be reviewed upwards, hahaha. Especially since markets are basically pricing in another 0.25% hike by the Fed in June.

    I always find it funny ever since Asian Financial Crisis that financial institutions in Singapore are able to come up with new methods to make people jump thru hoops & swing on monkey bars like circus animals just to get extra 0.5% or 1% a year. They must employ psychiatrists or psychologists (graduates of Dr Hannibal Lecter?) to come up with these schemes.

    For my liquid warchest, I personally find using a combination of good SGD money market funds and SGD short-duration bond funds provide superior returns with quite acceptable liquidity (3-6 biz days) and no penalty for withdrawals. Averaging 3% p.a. returns over past 17 years. Lowest was 0.5% for a few months in 2008/2009. Good years can see about 4% (rare!). Anyway these are just peanuts. Our focus & efforts should always be on main wealth-building method, process & management.

    1. Hi Anon,

      Yup, agreed. I don't like short term promos just to draw in the money, then to leave those that made the switch look stupid after the promo ends. From my understanding, the previous state of this account before the promotion was for balances of up to $100k only, so they upsized the total balance that can get the 1.28% rate.

      Ah, I hate jumping through hoops too, but I guess it's a smart way for banks to keep customers within their ecosystem and cross sell products. Most people I know can't be bothered with more than 1 bank account too, so to them it's a bonus because everything is streamlined and together.

      Which funds are you invested in? I've been a long time supporter of the UOB Fund Class A, heh. I think MMF or short term bond funds are really a good way to enhance yield as long as you are okay with a small risk that you might actually have to cash out with less than you capital. That can be mitigated by just being invested longer and having more returns as a buffer. However, some people dislike going negative, so this is more for those looking for "risk-free" sort of ideas.

    2. Haha, yup UOB SGD Fund ... ever since it was under OUB (hmm guess I'm considered old man :(

      Yeah short duration bond funds can & will drop during market stress e.g. UOB SGD fund dropped almost 3% during GFC and about 5% during 2011 Greece/Euro crisis. But it's total return since 2007 till now is almost 50% cumulative --- that's 4.1% p.a. compounded for what is essentially a dumbo fund. (I didn't realise so good until I went to check & calculate)

      The way I reduce volatility is to simply use 20-DMA on the fund. If it drops below the MA I switch to MMF, and vice versa. If your monies have been accumulating longer and have built up a relatively large buffer, you can use 50-DMA instead. Nowadays with 0% sales, switching or redemption fees, you can put in, take out, switch around to your heart's desire. Although I suspect if you switch like 50X in a month, the platform distributor will impose something on you.

      As for MMF, I use either Philips or Fullerton. Both are very stable if ho-hum returns, plodding along. But remaining positive thru GFC and Euro crisis. I guess if there's a SGD or SGD banking crisis, then we'll see some negative returns. But by then most probably URA & HDB indices will have also dropped 50% or more.

      I used to use Lion Global (OCBC) MMF, but ever since GFC it's been more volatile with NAV going down on some days, which is a strict no-no for me as MMF. Although total returns is higher than Philips/Fullerton, but using riskier bonds (likely reason) just to get extra 0.3% doesn't make sense to me.

      But basically this is just for emergency funds & warchest. Also good for managing some savings for my parents & in-laws.

    3. my big fear about the UOB A class fund is the ~40% exposure to Chinese issuers. In my experience, very hard to ascertain their creditworthiness.

  2. why compare to CIMB fastsaver? CIMB does not need monthly GIRO.
    u should compare it with POSB SAYE. 2%
    higher interest and more accessible banking facilities

    frankly.. u shouldnt waste time blogging this.

    1. Hi Unknown,

      CIMB does not need monthly GIRO, neither does Citibank. I'm not comparing, but just giving some alternatives to the usual OCBC 360 and OUB One accounts that everyone is familiar with.

      POSB SAYE doesn't allow withdrawals and it's a 2 year thing based on contributions and you also have to credit your salary. This means that you can't earn the salary criteria anywhere else. Also, since it's based on contributions, you wouldn't be able to get interest on a large amount immediately, say for example $50,000. You'd have to max out $3000 monthly contribution over 17 months to get interest on $50k, which is opportunity cost while you wait to fully invest during that 16 months piror.

      No doubt POSB SAYE is more convenient to set up, but this account, like POSB SAYE, is a supplementary account, not a main account. There is no increase in banking facilities by adding a POSB SAYE to your DBS/POSB account.

      With most accounts having very low balance eligible for interest (50k, 60k, 70k), this account up to 200k is an interesting alternative to people with high balances that don't want to take much risk, already used their salary credit somewhere else, yet don't want to commit to a fixed deposit

  3. U must be citi banker. too complicated for me.

  4. Hi! is this case, giro means we pay with the citi maxigain account or we need to giro in our salary?

    1. Hi unknown, for Citi Maxigain, you don't need to GIRO or credit your salary. The interest from the previous month would be enough to ensure that your monthly balance increases every month.


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