$$$ KPO and CZM $$$: DBS Multiplier Account Changes For The Worst

Wednesday, January 1, 2020

DBS Multiplier Account Changes For The Worst

Happy New Year everyone! Hopefully, this year will be a better year for all of us although it wasn't much of a good start for DBS Multiplier account holders (ourselves) >.<" I think a lot of us were still hoping for a repeat of last year Cathay error fare only to see this news by DBS.

When they relaunched the Multiplier Account a few years back, it was a game-changer. There were no minimum credit card spendings required, encourages people to invest genuinely through CDP (stocks or SSB instead of getting funds from the respective bank), treated everything as a transaction and awarded interest accordingly. Categories can be easily fulfilled with SSB and shared by couples using a joint account which I blogged about previously - DBS Multiplier + SSBs + Joint Account = Higher Interest! They even introduced home loan as a new category and increase the cap to $100k. It felt like they were on the right track in transforming DBS into a one-stop solution/bank.

Unfortunately, there will be a revision to the DBS Multiplier terms w.e.f. 1 February 2020. There are 3 changes:
1. Renaming of Salary Credit category to Income category. This is a pretty harmless move.
2. Dividend Crediting from CDP will no longer qualify as Investment but will be under the above Income category. So this essentially removes 1 category from all of us.
3. Balance cap for Salary Credit/Income + 1 category will be reduced from $50k currently to $25k with effect from 1st February 2020. This is the ultimate nerf that will cause people to move/change their savings account.

Although their website hasn't been updated, I believe this is how it is going to look like. Oh well, this is sort of expected right? The only constant is change. Are we going to change our savings account before February 2020? Probably not, for a few reasons.

KPO and CZM are pretty poor. Look at the amount in my Multiplier account. We are still well below the new $25k. I know it is sad but regular readers will know we hardly keep much cash. They are either invested or spent on our house/vacation. lol.

DBS is smart and knows that the Multiplier is still one of the most attractive savings accounts if we compared it against other banks at the same range/tier ~$25k.

UOB One requires one to spend at least $500 and the interest is around 1.5% - 2.0% for the first $30k.

OCBC 360 awards interest at 1.5% with at least $500 credit card spend for the first $35k.

SCB Bonus$aver is the highest for 2.13% with more than $500 credit card spend and the best part is the cap is $100k! This is probably the best savings account with its high cap if you are cash rich and have no issue spending at least $500 per month on credit card.

For now, we will probably remain with DBS but I can foresee us changing to other savings account once we get richer... What will you do?

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  1. Hi,

    I've received confirmation it's going to be like this: https://share.getcloudapp.com/geurgwbp

    One less category, so probably good enough for up to 50k if you have 2 categories including the new Income category.

    1. Hi LP,

      That look similar to what I shared above. lol. Do note that there is NO new Income category. The salary crediting part will become/rename to the Income category. Dividends from CDP will be tagged under Income.

      So most of us that have Salary + 2 categories (credit card and investment using SSB bond ladder) will only have Salary/Income + 1 category (credit card) ---> 25k limit only.

      Assuming those with home loan as the 3rd category now will have 100k limit will be reduced to 50k.

      Either way, most of our cap/limit will take a 50% reduction as long as you are using a SSB bond ladder.

  2. Hi KPO,

    I think what LP is referring to is the picture of the new interest rate table which you have provided. The CAP for the income + 2 categories should not be slashed to 25k as you have drawn. It should remain as 50k.

    1. Hi honest_me,

      The table states next $25k... That's why the last column, it shows next $50k as well instead of $100k.

      Let me list it out here for clarity instead:
      - Income + 1 category: cap 25k
      - Income + 2 categories: cap 50k
      - Income + 3 and more categories: 100k

      Hope this is clearer now :)

  3. IMO, I don't think the renaming the Salary Credit category to Income category is as innocent as it looks.

    By doing so, dividends and whatnots are now under Income, which effectively reduce 1 category for us to qualify, and to encourage us to take up the higher tier products that they have (like their investments and insurance products) if we want to earn higher interest.

    For those who are invested in equities, this change may not impact as much (because some stocks with dividend pay out more than what the savings account give) but for many risk-averse savers, they may be pushed by bank sales to consider more products with DBS.

    If you're a DBS shareholder, you'll probably welcome this news, since this may increase DBS coffers in time to come.

    1. Hi Sharon,

      Unfortunately, you are correct. DBS has reduce 1 category for most of us with this move :(