Singapore is no stranger to a whole list of banks offering high interest savings accounts (HISA). From local ones such as OCBC, DBS and UOB to foreign banks such as HSBC, Citi and CIMB etc. many of them provide (at the point of writing) interest rates up to 5% p.a simply by asking you to jump through a few loops and hoops.
This is not going to be an article that breaks down every single HISA out there in the market. Our friends in the community at MoneySmart have already done an amazing job documenting the best savings account so check them out over here!
So while everyone’s financial situation is different, which is MY PREFERRED high interest savings account?
TLDR : UOB One Account is My Preferred HISA
In my opinion, choosing the right HISA means a good balance of being able to
- Generate a substantial return on the deposits placed (i.e the interest rate)
- By jumping through a REASONABLE amount of hoops and loops to attain that interest rate
- With substantial visibility and transparency on whether if I would qualify for the tiers
Through my experience attempting at a few of the HISA providers in the list above, I have narrowed the best blend of experience across the 3 requirements above to UOB’s One Account.
Let me explain!
1. UOB’s One Account Interest Rates are SUBSTANTIAL
The caveat?
You need to have at least $100,000 of liquid cash to make full use of the high interest rates offered in the higher tiers.
UOB’s One Account follows a tiered interest system where you earn X% for the different segments based on how much your Account Monthly Average Balance (MAB) is. For instance, assuming you fulfil the various tasks, you can see that the final $25,000 of deposits after the initial $75,000 would earn you 7.8%! As such, to get the best out of this, you would need to maintain a MAB of $100,000.
Assuming you do maintain that MAB of $100,000, and assuming you do fulfil the tasks (which we would talk about in the next section), this translates into an effective interest rate of approximately ~5%!
This translates to an annual interest of ~$5,000 on just the account alone, or $5,000 / 12 = ~$416 per month.
“5%?? That’s nothing compared to investing in the Stock Market!”
I know what you are thinking though. 5% is not EXTRAORDINARY by any means, especially when you start comparing to returns from investing in other asset classes eg. “Equities generating 7% return per annum over 40 years” or “100% in 2 hours by buying the latest Crypto altcoin”. But that is not a fair comparison as you would only be comparing on one spectrum, and ignoring risk entirely. The risk profile for generating this 5% is much lower than the other alternatives listed above –
- Credit Risk – While we have seen some recent shakiness and volatility in the US Banking scene with banks such as SVB and First Republic getting into trouble, I would say Singaporean banks tend to still be resilient to the overall market, courtesy of MAS’s strong governance and the implicit “backstop” in place. Moreover, in the extreme event of a bank failure, SDIC has our deposits insured up to $75,000 which is a substantial percentage of what I have in UOB.
- Liquidity – This is an underrated benefit that people tend to look past, in that the amount you have in your bank, is fully liquid and ready for withdrawal anytime you need the money. This is not the same for other short term money market instruments (which could take 1-2 business days), or T-Bills (where you have to source for liquidity on secondary markets).
2. UOB’s One Account Requirements are SIMPLE & STRAIGHTFORWARD
How often have you seen a store display a sign that says “50% off everything!“, you get excited, run in to shop before realising at checkout that you missed out on certain fineprints such as “For first 10 customers only” or “with minimum purchase of $1,000“?
That feeling sucks.
Bringing this back to the context here, it just doesn’t make sense to have to jump through 15 loops to eventually then be granted the interest rates that was advertised.
Take for instance OCBC 360’s HISA account – it is offering a pretty attractive ~4.65% p.a rate. But to achieve that fully, you would need to complete the following tasks :
Compare this to UOB’s One Account :
I don’t know about you, but I think it’s pretty clear which is the one that is much simpler and more straightforward.
In my case,
- I can easily do a one-time notice to the HR department of my company to start crediting my monthly salary that is already above the minimum amount of $1,600 to my UOB One Account.
- My monthly spending is already > $500 so all I need to do was to obtain a credit card from the list of eligible ones to then allocate $500 of my spending to this card. I already had a UOB One credit card from way before so it was a no-brainer for me to simply continue using it as one of the eligible credit cards here.
In two steps and with minimal effort – I have set myself up easily to benefit from this!
3. I Can Actually See My Progress! Transparency for the Win!
If you are not new to this game – you would know how frustrating what I`m about to describe to you. All too often, you might have thought you accomplished one of the tasks to unlock the bonus interest rates associated with it, but there could be caveats or exclusions, that meant what you did, did not qualify for that bonus interest.
The worse thing about it? You won’t know at all, until you realize the interest that was credited to you in the subsequent month did not add up. By the time you figure out what went wrong, you already missed out a few crucial months of interest.
This is absolutely NOT the case with the UOB One Account, where everything is made transparent.
Let me show you in a few steps :
- Login to your UOB TMRW I-Banking app
- Click on “Accounts” at the bottom
- Click into your “One Account” under “Deposits”
- Click into “Details” near the top left
- Click into “View Activities”
What you would be presented with is an Interest Tracker that looks like this :
Now this is absolutely CLUTCH, especially so for the credit card spending task that all so often eludes us. If you are familiar with credit cards, there are always exclusions to certain types of transactions that would be deemed “ineligible”, and while I have a good grasp of what those are, I don’t want to be second guessing.
Imagine a situation where I cannot actively see how much of the $500 minimum spending I have accumulated, and I had to manually count it and in the off-shoot situation where I had accidentally included an ineligible transaction that leads me to think that I have hit this condition, it would have undone all the hard work we have put in. For context, if I had miscalculated and the eligible spending was $490 – this is what the annual interest would be :
From ~$5,000 of annual interest in the year to a measly $50.
Now you see what I mean?
CONCLUSION
For the 3 conditions I listed out earlier on what I am looking out for in choosing a HISA, I believe UOB’s One Account has sufficiently checked off the boxes for me.
Boy, I haven’t event mentioned anything on the UOB One’s Credit Card side of things, where one could potentially enjoy cashback of up to 15% on daily spend across brands like Cold Storage, Giant, 7-Eleven, Grab, Shopee, SimplyGo etc. Card terms & conditions are always changing so do check out their main page for the most up to date and accurate details – https://www.uob.com.sg/personal/cards/cashback/one-card.page
The UOB One Account might not be an exact match for your personal circumstances or financial situation but hopefully you would have also learnt something in my approach towards choosing a HISA.
1 thought on “Why UOB One Account is the Best High Interest Savings Account in 2023 (for me)”