I have been a DBS Multiplier Account holder shortly after it was enhanced in 2017.
In fact, I have been a POSB customer since I was in primary school.
It was a no-brainer for me to open an additional Multiplier Account and park my emergency funds into it to earn higher interest.
I am happy to report that after getting onto Multiplier, I have been getting 37 times the amount of interest I used to receive! Most importantly, this was achieved without the need of changing my spending habit.
Let me explain.
I’m a lazy person who doesn’t switch bank accounts for higher interests because I dread the administrative process and the wait at the bank.
Part of the draw to opening a DBS Multiplier account was that I did not need to go through the hassle of opening an account in person.
Everything was done online and the process was incredibly streamlines. Convenience cannot be underrated.
Just in case you aren’t familiar with how the DBS Multiplier works, here is a quick summary to get you to speed. In order to qualify for higher interests under your Multiplier account, you need to do the following:
- You need to credit your salary into any of your DBS/POSB account (doesn’t need to be the Multiplier account)
- You need to use at least one more banking service from DBS/POSB in any of these categories:
- Credit Cards
- Home Loans
- The total transaction value should be at least S$2,000 in each month and there’s no minimum spend in each category. Even $1 spend in that category would be counted.
- With these you would increase your interest rate to minimally 1.55% p.a. on first S$50,000 deposit in the DBS Multiplier Account.
- You can earn higher interests as long as you incur higher transaction value and bank more categories with DBS/POSB.
This is a common strategy nowadays among banks – to offer higher interests if you do more banking services with them.
The problem is that I personally find it a chore to understand the caveats, terms and conditions in such high-interest accounts with the other banks.
They usually require minimum spendings on each category and I just find it exhausting to track and make sure I ‘spend enough’ for that month. I don’t have this problem with Multiplier. I spend based on what I need or want and not because I want to optimize my interest rate.
So get your priorities right!
If you are thinking of switching, there’s one more reason to because DBS has just enhanced the Multiplier benefits. Here are some key changes:
- Deposits that can qualify for higher interest rates have been increased from S$50,000 to S$100,000
- Interest rates are even higher on the second S$50,000
- You need at least 3 categories to qualify for higher interest rates on the second S$50,000
Below is a chart to show the differences in the interest tiers on the first S$50,000 and the second S$50,000. Basically, DBS wants to reward customers who bank more with them.
It’s a pretty fair arrangement if you ask me.
It is also important to note that DBS has kept the benefits for the first S$50,000 unchanged. So if you are already a client of Multiplier you get to retain all the benefits as before, while enjoying additional interest on your second S$50,000!
You don’t need to fret about trying to achieve the highest interest rate. Most importantly if you can get higher interest without doing anything more than what you are doing now is already a good reason to switch!
As a rule of thumb, it is easier to increase your interest by having more categories than the transaction value. Furthermore, the key to qualify for higher interests on the second S$50,000 requires you to have at least 3 categories. Personally I have some challenges hitting 3 categories but it might be possible for you and I would like to run through some scenarios.
Category #1 – Credit Cards
This is the easiest category to qualify of all. I believe some of you would have a DBS/POSB card. As long as you use it to pay for something you would clock this category for the month.
I’m a miles convert because of MileLion. And he advocated sticking to one bank as much as possible to avoid orphan points. I started with the ubiquitous POSB Everyday Card. While this is not a miles card, it has been giving me good discounts at SPC petrol stations. Then I added the DBS Altitude card for point-of-sale purchases and DBS Woman’s World card for online purchases primarily. I’m pretty happy with these arrangements and I only had one other UnionPay card from ICBC for me to spend in China.
Category #2 – Home Loans
I opted for a HDB loan instead of bank loans because it was the most convenient when I signed the papers for my BTO flat. I know some people who have opted for bank loans and kept refinancing whenever better rates surfaced.
Those with bank loans have been enjoying lots of interest savings due to the low-interest rate environment in the past decade. Most believe that the rates would climb in the future and in fact, it has already crept up in the past year. Even so, the banks’ current mortgage rate of about 2% are still cheaper than a HDB loan of 2.6%.
This is a good category to add to your Multiplier if you are on bank loans or intending to apply for one. This is because mortgage transaction values are large and can help you qualify for higher interest tiers under Multiplier.
Category #3 – Insurance
Personally, I don’t buy insurance products directly by myself except for group, travel and car insurance. I have a few advisors helping me to plan my insurance needs and I also tend to have myriad products from various insurers.
DBS works with Manulife to provide insurance needs for her clients. Below is the list of insurance policies that would be recognised under the Multiplier programme and most of them are life, term and endowment policies. If you are clueless but still want to get your insurance protection through DBS, you can engage a wealth planning manager to help you through the process.
- ManuProtect MoneyBack
- ManuProtect Term
- ManuProtect Term Lite
- ManuProtect Decreasing
- ManuProtect Decreasing Lite
- ReadyPayout Plus
- Manulife SmartRetire
- RetireReady Plus
- Ready LifeIncome
- ManuFlexi Growth
- ManuEdu First
- Manulife Global Medical
- Manulife SmartWealth
Category #4 – Investments
This is the next easiest category to qualify as you can start a monthly investment plan with DBS/POSB even if you don’t have a big capital to invest (yet).
I have a DBS Vickers account and the dividends are credited to my POSB account which would be counted as part of the transaction value under the Multiplier programme. All my buy trades are counted too and this can significantly increase the transaction value for that particular month.
The stocks are going to be custodised under CDP anyway so it doesn’t matter which broker you use. You can sell it using another broker later if you desire. Also, commission rates among the brokers are pretty similar so the higher interest earned on the Multiplier account becomes an important factor compared to other brokers.
Make Your Savings Work Harder in Easier Ways
DBS Multiplier did away with a lot of terms and conditions and there are no minimums in any of the categories as long as the total transaction value hits S$2,000. Additionally, every transaction in DBS/POSB accounts has been consolidated to qualify for higher interest rates. It is indeed simple for customers to understand at the end of the day without worrying how to optimize their savings rate.
Besides the benefits mentioned above, the internet banking app and web page are very intuitive to use. The user experience is important to me because I want to get my banking services done quickly and conveniently regardless of where I am.
I like the Multiplier account a lot and I don’t foresee myself switching away from it. I am not a bank-hopper and the continual enhancements have given me more reasons to stay.
This article is sponsored by DBS but the views expressed in this article belonged to the author. The author is also a DBS customer.
CEO of Dr Wealth. Built a business to empower DIY investors to make better investments. A believer of the Factor-based Investing approach and runs a Multi-Factor Portfolio that taps on the Value, Size, and Profitability Factors. Conducts the flagship Intelligent Investor Immersive program under Dr Wealth. An author of Secrets of Singapore Trading Gurus and Singapore Permanent Portfolio. Featured on various media such as MoneyFM 89.3, Kiss92, Straits Times and Lianhe Zaobao. Given talks at events organised by SGX, DBS, CPF and many others.