This article was originally written on 7 February 2020 in collaboration with DBS. All views expressed in the article are the independent opinions of DollarsAndSense.sg. We have updated the article on 1 August 2020 and 1 January 2021 to take into account the revised interest rates.
Regardless of what stage of life you’re in, an invaluable tool in your personal finance arsenal is a high-interest savings account, which allows you to earn decent risk-free returns, while keeping your cash available for use at short notice if the need arises.
By giving users the ability to earn between 0.30% – 3.00% interest per annum, the DBS Multiplier Account is a popular choice as the go-to high-interest savings account for many people in Singapore.
We’ll explain how the account works so you can decide if it makes sense for you to start using the DBS Multiplier Account.
Existing users should already be aware of changes to the DBS Multiplier Account have been made effective from 1 January 2021. In light of these changes, it’s worth reading on to see how to maximise the interest you can earn under the new rules.
How The DBS Multiplier Account Works
In essence, to begin earning more than a trivial (0.05% per annum) amount of interest, you will first need to fulfil the base category of Income (Which replaced the previous Salary Credit). To do this, you can either:
Receive Salary Credit (via GIRO with reference codes of ‘SAL’ or ‘PAY’)
Receive Investment Dividends (via GIRO from Central Depository [CDP], DBS Vickers, DBS Online Equity Trading, DBS Unit Trusts, DBS Online Funds Investing, DBS Invest-Saver)
After fulfilling the mandatory Income category, how much interest you earn in a given month depends on:
1) The number of transaction categories you manage to fulfil;
2) The total value of these transactions; and
3) The Monthly Average Balance in your DBS Multiplier Account.
You can refer to this table from DBS to see this represented graphically:
If the awarded interest at higher tiers starts to make your mouth water, here are the criteria for fulfilling each additional category.
Credit Card Spend: This is pretty self-explanatory. You fulfil this category when you (or your supplementary cardholder) make purchases using any DBS/POSB credit card, including the popular POSB Everyday Card, DBS Live Fresh Card, DBS Altitude Visa Signature Card, DBS Black American Express Card, and DBS Woman’s Card.
Home Loan Instalments: If you are planning to buy a new home or are eligible to refinance your home mortgage, you can fulfil this criteria by getting a DBS home loan and paying your monthly instalments – and yes, both cash and CPF components are recognised.
Investments: You can fulfil this category in a few ways:
– Make a new Unit Trust Lump Sum Investment; or
– Make a fully settled ‘BUY’ trade using DBS Vickers; or
– Initiate a new DBS Invest-Saver plan, which will be recognised for the first 12 consecutive months.
Insurance: To fulfil this category, you can purchase regular premium insurance policies from DBS’ bancassurance partner, Manulife, which will be recognised for the first 12 consecutive months.
To help you estimate how much interest you can potentially earn using the DBS Multiplier Account, we’ll next use this handy calculator by DBS and project a few common scenarios.
Scenario #1: How Much Can A Young Working Adult Earn With DBS Multiplier Account?
According to 2018 data from the Ministry of Manpower, fresh graduates in Singapore earned an average of $3,500 (public university graduates), $2,501 (Polytechnic graduates) and $2,200 (ITE graduates).
For this illustration, we will use a gross monthly salary of $3,000. Let’s also assume the fresh graduate has a modest $12,000 in savings.
Income: Salary credit of $2,400 (After deducting 20% employee CPF contribution)
Credit Card Spend: $500 (For transport, meals, and other daily expenses)
By leaving your money in a regular savings account (with interest of 0.05% per annum), you’ll be earning a mere $0.60 that month (based on a 30 day month) on your balance of $12,000.
If we were to use the DBS Multiplier Account, we would have fulfilled the Income and Credit Card Spend categories, as well as clocking $2,900 in eligible transactions, thus earning us 0.4% in interest per annum. On our same balance of $12,000, this works out to $4 for the month – much better than the base interest.
Over a year, a DBS Multiplier Account user would have earned at least $51.10 more in additional interest – all without having to do anything differently. This difference will only become even more pronounced as we grow our savings.
Scenario #2: How Much (More) Can An Older Working Adult Earn With DBS Multiplier Account?
Assuming you’ve been in the workforce for 10 years and are now earning a gross monthly salary of $3,750. You started investing using DBS Invest-Saver, took a DBS home loan, and accumulated a respectable $60,000 in cash savings.
Income: Salary credit of $3,000 (After deducting 20% employee CPF contribution)
Credit Card Spend: $800 (For transport, meals, and other daily expenses)
Home Loan Instalments: Monthly repayment of $1,000 (Using a mix of CPF and cash)
Investments: $200 a month (Using DBS Invest-Saver)
By leaving your money in a regular savings account (with interest of 0.05% per annum), you’ll be earning a mere $2.40 that month on your balance of $60,000.
If we were to use the DBS Multiplier Account, we would have fulfilled the Income, Credit Card Spend, Home Loan Instalments and Investments categories, as well as clocking $5,000 in eligible transactions, thus earning us 0.80% in interest per annum on our first $50,000 and 1.60% on the remaining $10,000 (a drop from the previous 1.8% interest on the first $50,000 and 2.4% on the remaining $10,000).
This works out to $46 for the month and more than $558.45 in risk-free interest over a year!
Bonus Scenario: Using DBS Multiplier Account As A Couple
Even though you can’t use the DBS Multiplier Account as a joint account, if you want to earn attractive interest rates, both you and your partner can make use of it together to help each other earn even higher interest on your own DBS Multiplier Accounts.
To do so, both of you need to open DBS Multiplier Accounts individually, then open a joint account with DBS/POSB. When you credit your salary and/or dividends into your joint account, it will be recognised as fulfilling the Income criteria for both of your DBS Multiplier Accounts.
If both of you are working and receive a salary credit of $3,000 each, each of your DBS Multiplier Accounts would have clocked an eligible transaction of $6,000, just by salary credit alone! While Credit Card Spend and the other categories do not stack the same way, you’ll be in a great starting position if you wish to fulfil those categories.
You can read this article for more details on how you can make use of this DBS Multiplier Account with your partner – or at least someone whom you trust enough to open a joint account with.
Alternate Track For DBS Multiplier Users: PayLah! Retail Spend
The above outlines the most common (and advertised) way to earn bonus interest using DBS Multiplier. An alternate track based on PayLah! retail spending has been added, presumably for those without a credit card, insurance, home loan or investment with DBS. Here’s how it works:
Simply clock up retail spend using PayLah! of $500 in a month, and for customers above the age of 29, fulfil the Income criteria (Salary Credit/Dividends) in order to earn bonus interest of up to 0.5% on the first $10,000 in your DBS Multiplier Account. An interesting thing to note for those under 29 is that you can earn 0.3% in interest by virtually doing nothing, which is a clever perk to entice a new generation of customers.
DBS Multiplier Account Grows With You
We all need a savings account to receive our salary, pay bills, and keep cash that we want readily accessible – whether through an extensive ATM network, a FAST fund transfer or an e-wallet (like PayLah!). The DBS Multiplier Account does all of that – and more.
Even though most users use the DBS Multiplier Account primarily because of the high interest they can potentially earn, it is also worth noting that your DBS Multiplier Account is also a multi-currency account, which allows you to accept and hold deposits in up to 12 foreign currencies, alongside your regular SGD balances. This multi-currency feature makes the DBS Multiplier Account useful for frequent travellers, online shoppers, overseas investors, and exchange students.
One of the notable changes made to the DBS Multiplier Account mean that even if you do not draw a monthly salary – perhaps because you are a freelancer, self-employed individual, retiree, or temporarily out of a job – you can still fulfil the mandatory Income category by way of receiving dividends from your SGX stocks or Singapore Savings Bonds.
This is an example of the many ways you can earn bonus interest from your DBS Multiplier Account, which means that as you grow in your career and expand the types of personal finance services you consume, you can continue to enjoy even more rewards.
Begin your DBS Multiplier Account journey by signing-up in 5 minutes (if you have the required documents) and exchange tips and tricks with fellow community members as you learn to make the most out of your DBS Multiplier Account.