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 :)
Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)
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 :)
Do like any of the following for the latest update/post!
1. FB Page - KPO and CZM
2. Twitter - KPO and CZM
3. Click here to subscribe using email :)
4. Instagram - KPO_and_CZM (Did you see those delicious food photos to the right -->)
