The Penny Pincher
If you’ve been to the cinemas recently, you’ve probably seen the DBS Multiplier advertisement — yes, it’s the one with the giant rabbit roaming around the city. While it’s definitely an ad that makes an impression, does the DBS Multiplier account really live up to its hype? Does it really multiply your interests rates as much as it claims? And more importantly, is this the account for you?
What’s so special about the DBS Multiplier account?
Starting at just 0.05% p.a, the DBS Multiplier may not seem like a big deal. But what really sets the DBS Multiplier apart is its bonus interests. There are many ways you can ramp up your interest rates like:
- Crediting your salary to your account
- Getting a home loan with DBS/POSB
- Buying your insurance from DBS/POSB
- Spending with DBS/POSB cards
- Investing with your DBS/POSB account
Whether you’re getting a home loan, crediting your salary or investing, you’ll qualify for bonus interest rates. What’s more, there’s no minimum amount required for any of these categories. All you need to do is make sure your total transaction adds up to at least $2000.
Seems pretty achievable, isn’t it?
So how does it work?
There are a few factors that affect the amount of bonus interests you’ll earn. To sum it up, DBS looks at 1) your transaction categories and 2) the total amount transacted.
Here’s an example:
Transaction categories
Let’s say you credit your salary, pay with your credit card and invest with your account — that’s 3 bonus interest categories.
Transaction amount
Next, DBS looks at the how much these transactions add up. The more you spend, the higher the interest rates. Suppose your transactions add up to $4000 for the 3 categories stated above, this is the amount of interest rate you’ll get:
According to the chart, you’ll earn 2.20% p.a — much higher than the base rate of 0.05%
A few things to note…
There is a limit to your account balance
These bonus interests sound amazing, doesn’t it? Well, the rates in the chart above only apply if your bank account has a balance of $50 000 or less.
But what if I have more than $50 000? If you happen to have $50 001 to $100 000 in your account, you’ll qualify for interests rates of a different tier. That being said, you’ll need to fulfil a new set of requirements.
Firstly, you’ll need to credit your salary to your account. Next, you’ll need to have transactions that fall into 3 of these categories:
- investing with your DBS/POSB account
- Getting your insurance with DBS/POSB
- Getting a home loan with DBS/POSB
- Spending with DBS/POSB cards
In other words, you’ll need to be someone whose financial life involves DBS/POSB in almost every area. If this isn’t you, getting a DBS Multiplier account may not be worthwhile for you.
There is a 1 year limit on investing and insurance categories
This is an important point to note — your transactions in investing and insurance with DBS/POSB are only valid in the first year. This means that from the second year onwards, transactions in these 2 categories will not qualify you for bonus interest rates.
Yup, the first year with DBS Multiplier is the honeymoon period. Post 12 months, you might want to find an alternative way to earn more interest rates.
Crediting your salary to your account is compulsory
You’ll need to credit your salary to your account if you want to earn the bonus interest rates. This category is not an option. Which means that those who are self-employed, freelance, or earning passive income will not qualify for these bonus rates.
All in all, the DBS Multiplier account is perfect if your financial life greatly involves DBS/POSB. It’s not wise to go out of the way to apply for an account if your monthly transactions don’t already fall into any of these categories. There are a couple of limitations with the DBS Multiplier scheme, however, its no minimum transaction for any of the categories is a plus that shouldn’t be overlooked. If you happen to invest, spend, and bank with DBS/POSB, getting yourself an account might be a great way to ramp up your interest rates — at least in the first year!
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