Budgeting | Personal Finance | Article

Singapore Bank Savings Accounts Exposed: Breaking Down The Fine Print

by The Simple Sum | 18 Jun 2024 | 4 mins read

Sponsored content by CIMB Bank Berhad, Singapore Branch (“CIMB”).

The information shared is provided strictly on a non-reliance basis and does not constitute any form of advice from The Simple Sum or CIMB.

You should make your own assessment of your financial situation and needs and whether any product is suitable for you.

In Singapore, savers are often lured by the advertised interest rate of high-yield savings accounts. These accounts seem tailor-made for your savings while having liquidity, allegedly.

Because, as attractive as they are, they come with their own set of complexities.

Different banks offer various conditions for earning that extra interest – navigating these requirements is like solving a puzzle. Each criterion (from salary crediting to minimum credit card spending) can impact how much interest you earn on your savings.

Let’s break down some of the conditions imposed to qualify for the higher interest on a high-yield savings account.

High yield qualifying criteria 1: Salary crediting

Most high-yield savings accounts in the market have a salary crediting requirement.

To qualify for some of the best interest rates offered, banks typically need you to directly credit your salary into the account through GIRO with a clear “Salary” designation attached.

If you’re paid through checks, cash, or even multiple smaller transfers, your deposits might not qualify as “Salary” in the eyes of the bank. This can mean missing out on higher interest rates simply because your income doesn’t fit the standard mold.

High yield qualifying criteria 2: Minimum credit card spend requirement

Another requirement of some high-yield savings accounts is the credit card spending condition.

To access bonus interest rates, you may be required to spend a minimum amount on a linked credit card each month.

At first glance, this can seem like a double win. But this could undermine your savings goals by encouraging more spending.

It’s important to balance your budget and consider whether chasing that extra interest is worth the potential overspend.


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High yield qualifying criteria 3: Applying for additional bank products

Banks may require you to sign up for additional financial products such as insurance, or investment products to earn more interest in your high-yield savings account.

But committing to insurance or investment products often involves upfront costs or ongoing premiums.

When considering these additional products, it’s essential to assess whether they truly meet your needs.

Other things to note when attempting to get higher yield for your savings account

Cap on interest earned

Even after navigating the myriad requirements for earning higher interest in high-yield savings accounts, there’s another potential hurdle: interest rate caps.

Many banks impose limits on how much interest you can earn, by capping the interest rates after reaching a certain account balance.

Therefore, even if you diligently meet all the criteria — maintain the minimum balance, hit the required credit card spend, and possibly sign up for other bank products — you might still find that the additional interest you can earn is limited.

Prioritising interest rates over liquidity or lock in period

Those looking for a fuss-free option to earn higher interest may be considering fixed deposits. But the catch is that it comes with lock-in periods during which you can’t access your funds.

This poses a problem if you need access to your funds at short notice to cover emergency expenses or periods of low income.

Save more, earn more with CIMB Savings Accounts without the need for multiple conditions

Are you tired of jumping through endless hoops just to get a decent return on your savings?

A pro tip is to seek out accounts like CIMB FastSaver which lets you earn high interest without having to fulfill multiple conditions.

Whether you’re a busy professional, freelancer navigating unpredictable income streams, or someone who simply wants a fuss-free financial experience, CIMB Savings Account offers an attractive solution.

If you’re new to CIMB, here’s what you get:

  • Earn more from your first dollar: Start earning a compelling 3.5%* p.a. interest from your very first dollar saved, with no complicated conditions to meet.
  • Keep it simple: Forget about the hassle of salary crediting, tracking credit card spending, or setting reminders for monthly bills. CIMB Savings Account keeps it straightforward, with no multiple conditions or hoops to earn extra interest so you can focus on what truly matters in your life.
  • Flexibility to earn and transact: Unlike other banks, CIMB Savings Account doesn’t cap the interest earned and there’s no need to lock in your funds. Enjoy full access to your money whenever you need it, without sacrificing interest rates.

Sign up here and start enjoying better interest rates immediately.

*Terms and conditions apply. SGD deposits are insured up to S$100k by SDIC.