MariBank raises savings interest rate to 2.88%

Rate offered by Sea unit is highest among 3 digital banks here in fight for customers

- Chor Khieng Yuit

The digital banking unit of gaming and e-commerce group Sea now has the highest interest rate on savings accounts among the three digital banks in Singapore after it raised its rate on Monday.

MariBank's 2.88 per cent promotional offer is also higher than what DBS Multiplier customers can get when they credit their salary and card spend, but lower than what UOB One and OCBC 360 customers are getting.

The MariBank offer ends on Dec 31, when it will revert to the base rate of 2.5 per cent, which its customers have been getting since the digital bank launched in March.

Rival digital bank GXS cut its deposit rate in its Saving Pockets to 2.68 per cent a year in August, while Trust Bank, which is backed by Standard Chartered and the FairPrice Group, has been giving up to 2.5 per cent for National Trades Union Congress union members and 2 per cent for nonunion members.

Associate Professor Jan Ondrus from the Asia-Pacific campus of Essec Business School said all banks, including digital ones, use interest rates to gain new customers.

Financial advisory director Shawn Yap, 46, has accounts with GXS and Trust and is mulling over opening one with MariBank soon, "just to try out (as) 2.88 per cent is a good deal".

Prof Ondrus said digital banks hope that once customers like Mr Yap open an account, they are less likely to leave after the promotional offer ends, especially if they have had a good experience and do not have to pay any fees to stay on.

The banks can then cross-sell other products or services, he added.

However, Fitch Asia-Pacific financial institutions director Willie Tanoto said it is difficult and unsustainable to compete solely on interest rates because the incumbent banks have "much better developed deposit franchises".

Fitch said local banks DBS, OCBC and UOB accounted for 65 per cent of all Singapore-dollar deposits as at the end of 2022, with combined deposits of around $500 billion.