$$$ KPO and CZM $$$: DBS Multiplier + SSBs + Joint Account = Higher Interest!

Monday, April 16, 2018

DBS Multiplier + SSBs + Joint Account = Higher Interest!

Updated on 1st January 2020 - DBS will be making some revision to the Multiplier terms w.e.f. 1 February 2020. Refer to this blog post for more information - DBS Multiplier Account Changes For The Worst.

Some of the readers might know that we have changed our bank accounts from OCBC 360 to DBS Multiplier when it was revamped last year and I blogged about it here - Free $5 for DBS Multiplier Account Holder. The free $5 is still available (until 30th June 2018)!

In my opinion, the DBS Multiplier is by far the most generous bank/account when it comes to fulfilling/meeting the various defined categories (credit card spend, home loan, insurance and investments). Firstly, it awards you for having a higher salary and there is even a way to double it through the use of joint account! I shall elaborate further later. Next, it does not encourage spending, even a $1 credit card spend will mean that one can meet that category (proven - this is what CZM has been doing).

Last but not least, all/most of the investments category (e.g. OCBC 360 and SCB Bonus$aver) has been a scam which requires you to either purchase an eligible insurance product or invests in a unit trust with them - things which we will never do. Naturally, we dismissed the investments category for the Multiplier account when we first signed up for it. It turns out that the investments category can be met simply from dividend crediting from CDP. With this knowledge, I came up with a theoretical way (not proven yet, we will only know 7 months later. lol) to increase our interest!

Step 1
Open a joint account with your spouse/another half (If he/she does not exist, you can skip to the next step or find one quickly. Hahaha). You should have 2 Multiplier accounts + 1 joint account.

The reason for having a joint account is because the total salary credited to the joint account will be considered as a salary credit for the Multiplier account. This could potentially bump the couple up to the next category (e.g. ≥S$2,500 to <S$5,000 to ≥S$5,000 to <S$15,000) which gives more interest! Furthermore, with 2 Multiplier accounts, the cap for the bonus interest is essentially doubled to $100k. One thing to take note of is that the joint account should only be used as a "pass through" account. Keep the minimum balance (we are looking at POSB Everyday Savings Account with $500 minimum balance) needed and transfer the relevant amount/salary to the Multiplier account because the interest awarded is based on the balance in the Multiplier account only.

Step 2
Build a bond ladder using 6 SSBs (Singapore Saving Bonds). Bonds pay a fixed coupon (similar to stocks paying dividends) at fixed interval and has a maturity date where one can get back the principal/invested value. A bond ladder is made up of multiple bonds that pay coupons at different intervals with different maturity dates. This is a more conservative strategy/form of passive income for retirement. This is just a quick introduction, do read up more on bonds elsewhere!

I believe everyone should be familiar or have at least heard of SSB. It is issued/backed by our government and unlike the normal/actual bond, it will not be affected by the rising interest rate environment. Bonds typically trade like stocks with buy and sell price and its price will fall when interest rate increases but you do not have to worry about that with SSB. The minimum investment per SSB is $500 and the transaction cost is only $2. To build a bond ladder, simply buy a $500 SSB for the next 6 months. Since the SSB pays coupon/interest every 6 months, you will receive dividend crediting every month for the next 10 years! lol. You will also need to go to the SGX CDP portal and ensure that the account specified in the Direct Crediting Service is the joint account.

Having said that, is it really worth the effort? The answer is it depends! I have build a simple calculator for you to compute the difference in interest. Simply modify the deposit you have, the monthly transaction (total salary credit + estimated credit card spend) and let the formula do the magic! To simplify the computation, I have made some naive assumptions:
- Invest the minimum ($500) to SSB
- The deposit is kept constant
- The T&Cs of the Multiplier account will remain the same (we have all seen/experience how the different banks change the interest rate awarded or the T&Cs)

Here you go - KPO Calculator for Multiplier + SSB

Let me know what are your thoughts :)

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  1. This method works.
    I've been buying SSB over the last 2 years as a form or retirement handout for my parents when they retire.

    Since the opening of my multiplier late 2017, I've been fulfilling 2 categories with my SSB interest and credit card spending.

    I'm currently outstation but I still uses my credit card for a 0.50eur per month.
    I can verify that I'm still getting an interest rate of more than 2% every month.

    Great post. Great sharing.

    Thumbs up

    1. Hi ZhanQing,

      Thank you for the confirmation! Looking at the FAQ, we are both pretty sure it will work too. Hahaha.

      Thank you for the kind words, glad that you enjoyed the article :)

  2. Replies
    1. Welcome! Need to find alternative to recoup Thaibev losses. Hahaha.

      You can use this strategy with your mum for higher interest!

  3. Hi. Nice tip. The SSB should be credited into joint account or multiplier?

    1. Hi KY,

      The interest/coupon from SSB should be credited into the joint account as well. You can do that by signing into the SGX CDP portal and change the account for the Direct Crediting Services :)

    2. Thanks. So just need 1 CDP account? Time to sign up for next bond exercise.

    3. Yeah. Technically both CDP also works but consolidate to 1 account easier.

      Take note of the dates if you are applying for May SSB!
      Closes: 9.00pm, 25 Apr 2018
      Results: After 3.00pm, 26 Apr 2018

  4. The minimum balance for a joint account is $3000 instead of $500. The dbs person said that's the only one that they are offering now.

    1. Hi Aloysius,

      Technically, the DBS person is not wrong. lol. You will have to ask for any of the POSB savings account:
      - POSB eSavings Account
      - POSB Everyday Savings Account
      - POSB Passbook Savings Account

      Unfortunately, not everyone is proficient/familiar with the products the bank is offering.

  5. Can i just check with you which credit card are you using in tangent with this strategy? Most of the credit cards have an annual fee of 192 per annum. Possible to waive annual fee based on your spending?

    1. Hi Lemon,

      Any DBS credit card will do! It depends on whether you belong to the cashback camp or the miles camp. lol.

      Cashback - DBS Live Fresh Card (I maybe wrong because I do not belong here)
      Miles - Woman's Card or Altitude

      Yes. So far, I only paid for annual fee that give miles/points in return. The annual fee for my other credit cards are always waived.

  6. Hello, just curious how can fresh graduate who just started working take advantage of the DBS multiplier interest rate? Don't think they can't apply for a credit card yet. Or is there other account more suitable for them?

    1. Hi lilac lover,

      Once you receive your first month payslip, you will be able to apply for a credit card. That was what I did :) My first account was OCBC360 when I graduated and that account requires credit card spending too.

      I am not too sure if there is any more suitable account because the way people earn/save/invest/spend are very different. You got to decide for yourself. For a start, you can read this Seedly article - https://blog.seedly.sg/best-savings-accounts-2018/

      Hope this helps :)

  7. Hi! Do you mean the salary does not have to be credited to the Multiplier account itself but just any other POSB/DBS account? Also, the minimum spending on credit card - will that work on debit cards? Or do I have to get a credit card no matter what? If it works on Debit card, do I have to link my card to my multiplier account?


    1. Hi Zhiting,

      First question - Yes!
      Salary credited via GIRO into any personal or joint DBS/POSB deposit account. The main description in your Statement of Account should “Salary” or “GIRO Salary”.

      Second question - No!
      Unfortunately, it has to be a DBS/POSB credit card with you as the principal card holder.

      Hope this helps :)

  8. Nice article. Especially on the bond ladder using ssb!

    I was looking to optimise my bank acct and this seems to be the principal acct to offset my opportunity cost for holding cash.... gonna combine it with uob one and then cimb fast saver

    1. Thank you! Sounds like you are holding on to lots of cash, hence the need to have multiple savings accounts. What an excellent problem. Hahahaha.

  9. Hello Kpo and Czm,

    I am new here. Love reading all your blog post. I just started to open a DBS Mulitpiter Account and using the relevant DBS Credit Card. So far I think I am getting 1.85% interest which is around $50-60 per month.

    Can I just check do you all use $500 every month to buy SSB so that it is counted as one of the components to get more interest? Thank you!!

    1. Hi Esther,

      Glad that you are enjoying the blog!

      The month when you buy SSB, there will be NO additional interest because buying/applying for SSB is not counted as a category.

      However, 6 months later, when SSB gives dividend/coupon/interest and you have enabled dividend crediting from CDP to the joint account or multiplier account, you will be getting additional interest because dividend crediting from CDP is considered under the "Investment" category.

      So We are not buying every month! Only on months where we do not have stocks paying dividends. If you do not own any stocks, the easiest way is to buy $500 SSB consecutively for the next 6 months and collect higher interest until DBS changes the T&Cs for the Multiplier account.

      Hope this clarifies!

    2. Hi KPO, thanks for sharing this tip and patiently answer so many questions. This specific one was exactly what I was looking for. Now, I understand the 6-month wait before the SSB Ladder starts to payout to the Multiplier account. Meanwhile, for this 6-month gap, what is the simplest strategy that can immediately satisfy a missing category. My situation is that I was using a RSP (regular saving plan) but that only work for 12 months, and it has just expired. Thanks in advance for sharing your knowledge!

    3. Hi Sunshine Rose,

      If you are already investing in shares that pay out dividends, the fastest is to credit the dividends. Otherwise, I don't think there is one. If there is, I am not aware of it. Haha. We were so closed to completing the ladder but I missed one month >.< Now I am just waiting again...

  10. Replies
    1. Hi Dex,

      Thanks! Glad that you enjoyed the article :)

  11. Hi KPO,

    Thank you for the great articles!
    One thing to clarify and need your advice.
    Do both joint account holder in multiplier eligible for one of the category benefit, if one have a DBS/POSB credit card?

    1. Hi Unknown,

      For the credit card category, each of you need to have your own DBS/POSB credit card as the principal card holder. In addition, you will need to spend using both cards for the month to qualify (there is no minimum spend so $1 also works).

  12. Hi,
    But the dividend from ssb is only recognized for first 12months right? I mean to be eligible for the extra interest rate for dbs multiplier.

    1. Hi,

      No. They will be valid for the next 10 years as long as dividends/interest/coupons are paid out into your direct crediting account.

      Please do not confuse this with the RSP for unit trust or ETF.

    2. Ohh thanks! Because a dbs online agent told me it's for 12 months only. I have confirmed with another dbs officer and she told me as long as dividend is credited into posb acct, the extra interest rate is valid. Thanks again!

  13. Hi KPO,

    For the SSB ladder, do I have to purchase it through my multiplier account or can it be from my other posh account?

    1. Hi, it doesn't matter which account you purchase from. What matters is in your CDP, you need to have the Direct Crediting Service enabled in order to credit the dividends/coupons to your Multiplier/joint account.

      It is when the dividends/coupons are credited, then you will be able to fulfill the "Investment" category.

  14. Hey!

    I just stumble upon your blog and i would love to try this out.

    But there is an update on the DBS Multiplier A/C as of Feb 2020, I don't exactly understand the full update but would it effect this strategy? because it got something to do with dividend credit from investment category to income category. Or am i wrong?

    1. Hi Sid,

      Like you mention, this will no longer work as of Feb 2020. I have already updated the article when I wrote about the revision.

      You can read about it here - https://kpo-and-czm.blogspot.com/2020/01/dbs-multiplier-account-changes-for-worst.html