UOB, OCBC to cut interest rates on savings accounts

Their new rates on flagship accounts to kick in from May; DBS rate unchanged for now

- Chor Khieng Yuit

Interest rates on more savings accounts are coming down in Singapore, with two of the three local banks - UOB and OCBC Bank - reducing rates on their flagship accounts, the UOB One and OCBC 360, from May 1.

The Straits Times understands that DBS Bank will be keeping the rates on its flagship Multiplier account for now.

A flagship savings account is a bank's best savings product, which offers bonus interest rates that go up as customers transact more with the bank.

Transactions that qualify for the bonus rates include salary crediting, spending a minimum amount on a credit card, taking up a loan, and investing or buying an insurance policy from the bank.

From May, OCBC will lower the bonus rates for some categories - salary credit, save and spend - while retaining the rates for the invest and insure categories.

The 360 account will offer a maximum effective interest rate of 6.3 per cent a year on the first $100,000, down from 7.65 per cent.

To earn the revised rate, a depositor has to credit his salary, spend, save, insure and invest with the bank.

Ms Tan Siew Lee, head of group wealth management at OCBC, said interest rates have "softened over the past one year" and the bank is adjusting the rates for the 360 account "in line with prevailing market conditions".

Meanwhile, UOB One customers will earn up to 5.3 per cent on their first $150,000, down from 6 per cent.

To qualify, they have to credit their salary and spend a minimum of $500 on their credit cards.

Under the new rate structure, the highest effective interest rate they can earn is 3.3 per cent, down from 4 per cent currently.

The upcoming revision in rates for the UOB One account marks the bank's second cut in two years.

On May 1, 2024, it reduced the rate from a range of 3.85 per cent to 7.8 per cent per annum to a range of 3 per cent to 4.5 per cent, for balances of up to $100,000.