From 1 Dec 2022, UOB has increased their interest rates for their UOB One Account. Saying I am really really surprised is an understatement.
Just look at these two screenshots taken from the UOB website below. They literally speak a thousand words.
The headline rate of 7.8% is designed to catch your attention. But what truly made my jaw drop is the effective rate of 5% on the first $100,000 of balances.
Honestly, I thought that would have made a much better marketing headline.
Especially since the two requirements, $500 of card spend and crediting $2,000 worth of salary are a low bar for >90% of the population.
5% effective rate is monstrous as people with <$100,000 of liquid cash will prioritize the UOB One Account over 6-month T-bills, not to mention other deposit accounts and money market funds. If UOB pulls a fast one and reduce rates within 6 months, I really think they will take a reputational hit, no?
However, before you redeem all your Singapore Saving Bonds (SSBs), do note that bank rates can be adjusted anytime and personally, I will be surprised if the 5% effective rate on the first $100,000 persist for more than two years.
Conclusion
This is a consequential move that will leave UOB’s competitors scrambling. The fight for liquidity among institutions is real in this high interest rate environment.
A 5% almost risk-free rate is not something to be sniffed at. That is $5,000 of interest, the median monthly salary of a young Singaporean.
I will definitely be making a concerted effort to pull out $100,000 from various sources to fill my UOB One Account to $100,000 in the next few days.
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Personally, I am irritated by ads and pop-ups so I do not use any of them on this blog too.
How would you qualify for the extra percentage when you’re not drawing a salary?
Hi Jason,
One of us draws a modest salary from a side hustle. Medium term, there are plans to incorporate either our tuition work or this blog and then we will pay a salary to ourselves.
Otherwise, the interest rate on first $75,000 based on 3 GIRO transactions is decent too, at 3% p.a.
i think the salary credit is 1600 , not 2000 ?
Hi FC,
Yes, you are right. However, the calculator (for the salary part) only allows for increments of $500.