Even if you haven’t heard the term before, you’re most likely familiar with the concept of a “hurdle” bank account.
These are savings accounts, which offer incremental interest based on the completion of various tasks, such as crediting your salary, spending a certain amount on credit cards, paying a certain number of bills, buying insurance with the bank etc.
Picking the right hurdle account has historically been tricky for miles collectors because these didn’t always recognise spending on high yielding miles cards. But things have changed in the last couple of years, and we’ve now reached the point where it’s perfectly possible to optimise both your miles and interest at the same time.
So let’s look at which bank accounts are most suited for miles chasers. For the analysis below, I’m going to assume three possible scenarios:
- Fresh Graduate: Salary Credit: $3,000/month, Card Spend:$500/month
- Mid-Career: Salary Credit: $6,000/month, Card Spend: $2,000/month
- High Roller: Salary Credit: $12,000/month, Card Spend: $4,000/month
We’ll assume this person does his/her own investments and pays bills out of the same account.
DBS Multiplier Account
The DBS Multiplier offers an effective interest rate of up to 3.65% p.a on the first$100,000 in the account. There is no minimum credit card spend to earn bonus interest with the DBS Multiplier. Instead, what matters is the number of categories you transact in and the total volume.
However, it does not count bill payments as an eligible category, and there’s no minimal differences in the interest earned between our three profiles. If you don’t have a home loan or any insurance/investments with DBS, your interest will max out at 2.08%.
DBS Altitude Visa/ DBS Altitude AMEX
The DBS Altitude earns 1.2/2.0 mpd on local/overseas spending, and 3.0 mpd on online hotels and air ticket bookings (4 mpd on Singapore Airlines tickets booked through the DBS Travel MarketPlace) capped at $5,000 each month. To sweeten the deal, DBS Altitude cardholders can also earn 4 mpd on SimplyGo and Comfort/Citycab/Grab/ Go-jek transactions till the end of the year, capped at $1,200.
DBS Woman’s World Card
Another way to boost your total card spending is through the DBS Woman’s World Mastercard, which earns 4 mpd on the first $2,000 of online spending each month. This includes air tickets, groceries, shopping, entertainment and food delivery, so there’s no shortage of ways to earn.
BOC SmartSaver Account
*Base interest is 0.4%
The BOC SmartSaver offers up to 3.55% p.a interest on the first $60,000 in the account. Unlike most other hurdle accounts, there’s no need to have a home loan or buy the bank’s investment products to unlock the maximum interest possible.In fact, salary crediting, credit card spending and bill payments alone help 2 of our 3 profiles unlock the full 3.55%.
The bonus interest on credit card spending is split into two tiers: spending $500-1,499 per month will unlock 0.8% bonus interest, while spending $1,500 and above will unlock 1.6% bonus interest.
BOC Elite Miles World Mastercard
BOC only has one miles card but, fortunately, it’s a rather good one. The BOC Elite Miles World Mastercard earns 1.5/3.0 mpd on local/overseas spending, with no minimum spend or cap. This makes it the highest earning general spending card at the $30,000 income level, although cardholders will want to take note of some exclusions arising from changes made to the T&Cs earlier this year.
*Assume that step-up criteria is met each month. Base interest is 0.05%
The OCBC 360 account offers an effective interest rate of 3.45% p.a on the first $70,000 in the account. However, unlocking the full bonus interest requires you to buy insurance or investments from the bank.
On the bright side, this could be a good account for fresh graduates, given the relatively low salary crediting (min $2,000/month) and card spending requirements. By spending just $500 a month, one can unlock the full 0.45% (0.3% on the first $35K, 0.6% on the next $35K) bonus interest.
OCBC 90N Card
The recently-launched OCBC 90N Card normally earns 1.2/2.1 mpd on local/overseas spending. However, from now till February 29, 2020, you can earn an uncapped 4 mpd on overseas transactions, Singapore Airlines/SilkAir, Air Asia, Jetstar and Scoot tickets, Spotify, Netflix and The Shilla Duty Free purchases. You’ll also earn an uncapped 8 mpd on Agoda, Airbnb, Expedia, Millennium Hotels & Resorts and Mr & Mrs Smith Hotels.
OCBC Titanium Rewards
If you frequently shop online or offline, you’ll want to consider an OCBC Titanium Rewards card, which gives 4 mpd on the first $12,000 spent on clothes, shoes and bags, department stores and electronics stores. You can also earn 4 mpd at the following e-commerce merchants:
*Assumes balance of $50K in account, which earns base interest of 0.24625%
The Maybank SaveUp offers an effective interest rate of up to 3% p.a on the first $50,000 in the account. Unfortunately, the big jump comes when you transition from 2 products to 3, so if you’re only crediting your salary and using your credit card (bill payments and salary credits count as 1 product), you won’t earn a whole lot of interest.
Maybank Horizon Visa Signature
The Maybank Horizon Visa Signature earns 3.2 mpd on dining, bus and train, petrol, taxi fares and Agoda hotel bookings as well as 2.0 mpd on foreign currency transactions, air tickets and travel packages. All other spending earns only 0.4 mpd, which makes this a poor choice for a general spending card.
*Assumes this individual is female and holding the UOB Lady’s Card
The UOB One offers up to 2.436% p.a on the first $75,000 in the account. On the surface, it’s pretty straightforward to unlock the maximum interest – simply spend at least $500 on your card and credit your salary (min $2,000).
Unfortunately, the UOB One only counts spending on three cards: the UOB One, UOB Lady’s Card and UOB YOLO. Of these, only the UOB Lady’s Card earns points (the other two are cashback), and it’s only open to women.
You won’t be able to use UOB’s other points-earning cards (e.g UOB PRVI Miles) to meet the $500 spending requirement. Therefore, unless you’re a female miles chaser, this won’t be the right account for you.
UOB Lady’s Card
The UOB Lady’s Card allows you to pick one of seven categories to earn 4 mpd, capped at $1,000 per month. This includes beauty and wellness, dining, entertainment, family, fashion, transport and travel. Your 4 mpd category can be changed every quarter, which means the card can be different things at different times. If you have a wedding banquet, switch to Travel and earn 4 mpd on your hotel payments. If you’re buying a big skincare package, switch to the Beauty & Wellness package next quarter.
*Must use the SCB Bonus$aver card, which does not earn miles
The SCB Bonus$aver account offers up to 3.88% p.a on the first S$100,000 of deposits. This consists of up to 1.88% interest from spending S$2,000 or more on your SCB credit card.
The only catch you have to bear in mind is that all your spending must be done on the SCB Bonus$aver card, which does not earn points or cashback.
Based on the analysis above, the BOC SmartSaver is a good choice for those who want to earn miles while maxing out the interest in their bank account. Otherwise, the OCBC 360 or UOB One account (but only if you’re a woman) would be acceptable alternatives.
Do keep in mind that your equation does change if you’re willing to buy insurance or investment products from the banks.
So there you have it – playing the miles game doesn’t mean having to give up bonus interest. Pair the right cards with the right accounts, and enjoy the best of both worlds.
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