The economic climate is still appearing to be bleak going into 2021, and banks have decided to depress their savings accounts’ interest rates yet again. Here’s a roundup of the latest round of interest rate cuts.
2020 hasn’t been the friendliest of years for anyone thanks to COVID-19 wrecking havoc across the globe. Financially, the waters are still very much rocky even as the year comes to a close. Financial institutions have been implementing interest rate cuts across their savings accounts throughout 2020, much to the chagrin of even the smartest saver.
Unfortunately, this trend is set to continue into 2021 as banks in Singapore aim to stay prudent even though Asia is picking itself up and dusting itself off. The latest round of interest rate cuts have been announced again and the following savings accounts have been the most hard hit.
CIMB’s fuss-free FastSaver account got fussier and slower last month. Its maximum interest rate p.a. dropped from 1.5% for your first $100,000 to a paltry 0.75%. For reference, this savings account’s interest rate used to be 1.8% p.a. for your first $100,000 all the way till 14 July 2020. However, there are several zero-effort savings accounts from other banks that you can consider depositing your money in, so all is not lost.
DBS Multiplier (w.e.f 1 Jan 2021)
The popular DBS Multiplier account has revised its interest rates for the third time this year, with the latest cut set to take effect from 1 January 2021. This reduction comes right after the bank made its high-yield savings account more flexible for gig workers, NSFs, and students. The maximum interest rate has been reduced from 3.8% p.a. to 3% p.a. for transactions equal to or above $30,000 in three or more categories with an account balance of $100,000.
Unfortunately, that isn’t the only change. Rates across the board have been revised, including its latest addition bringing PayLah! retail spend into the fold. Check out the full list of changes here.
Standard Chartered JumpStart (w.e.f 1 Jan 2021)
Standard Chartered’s savings account for young adults has taken another hit too, after slashing its rates back in July to 1% p.a. for your first $20,000 in the account. That’s all set to change from 1 January 2021, with the prevailing interest rate being cut by 60 per cent to 0.4% p.a. on your first $20,000.
Like the DBS Multiplier and CIMB FastSaver accounts before it, this wasn’t the first change that Standard Chartered made to its JumpStart account. In July, its interest rate was slashed from 2% p.a. to its prevailing 1% p.a.
Fortunately, UOB’s One savings account retains its maximum interest rate of 2.5% p.a. for your first $75,000 deposited after its latest round of revisions back in November 2020.
What has changed would be the reduction of interest rates for deposit amounts lower than $75,000, with all tiers seeing their rates slashed. Your first $15,000 deposited now nets only 0.5% p.a. and your first $45,000 generates 0.65% p.a. instead of 0.75% p.a. and 0.90% p.a. respectively.
Instead of an outright interest rate reduction, the UOB Stash savings account underwent a restructuring as well. It still boasts a maximum interest rate of 1% p.a. for your first $100,000 deposited. However, you will need to deposit $90,000 for an interest rate of 0.6% p.a.
Previously, your first $50,000 would net you 0.8% p.a. UOB has mentioned that it will not change the qualifying criteria for both this account and its One savings account, giving customers some peace of mind as both have relatively simple mechanics.
The latest round of interest rate cuts is admittedly a shock, given that Asian economies are rebounding steadily after taking a beating earlier this year. On the other hand, the world as a whole is not in the clear yet, even though multiple COVID-19 vaccines have emerged.
As mentioned earlier, banks might be doing this to play it safe and also due to a low take up of loans. If interest rates can be slashed this quickly, one can hope that they’ll be raised in double-quick time next year or even in early-2022.
Read these next:
How Much Savings Should I Have At 35 In Singapore?
Regular Savings Plan (RSP): What They Are And The Best Ones To Invest In
How To Allocate Your Cash Effectively
The Differences Between Bank Account Types You Need to Know
When Should You Open A Second Bank Account?
By Ebel Tang
A geek culture enthusiast who’s also a little too invested in the wide world of whisky and watches. And no, he was not named after the Swiss timepiece brand.