I have compared the differences between the UOB One Account (which current advertises up to 3.33% p.a. interest rates) and the OCBC 360 Account a couple of years ago. Even with the changes that the OCBC 360 has introduced over the years, it is still one of my preferred savings account in Singapore since I can achieve up to 1.85% p.a. of interest (you can earn up to 3.05% p.a. interest if you insure or invest with OCBC), up to S$70,000 fairly easily. The UOB One Account will be introducing some changes from 01 August 2018 and they are quite lucrative (especially if you already use a UOB One credit card which gives you cash rebates) but it may not necessarily be convincing enough for me to make the switch.
1. UOB One to offer up to 3.88% p.a. interest (up from 3.33% p.a. interest) - EAR 2.44% (+0.01% Improvement)
UOB One is advertising interest rates of up to 3.88% p.a. with the upcoming changes that are going live on 01 August 2018. While this may seem like a significant change from 3.33% p.a. which is currently being advertised, I have written about this in the past that the effective annual rate (EAR) is only approximately 2.43% p.a. The UOB One Account promises interest rates of up to 3.88% p.a. from 01 August 2018 but if you do the math however, the EAR only works out to be 2.44% p.a. - it may seem like you are getting a lot more but in reality, the EAR improvement is only 0.01%. Do not get me wrong though, this is definitely a plus and an improvement but there is certainly not enough ammunition for me to make the switch based on this alone.
2. Bonus interest on the first S$75,000 (up from S$50,000) - You may still be earning less interest each year
Here's something that banks like to wave around your face to let you know that hey, you can now earn bonus interest (and you would probably associate it to the 3.88% p.a. advertised rate) on up to S$75,000 instead of S$50,000 right now. While that is definitely true, here's a simple example to show you how you can potentially earn less interest even with the increased cap on bonus interest as well as the higher advertised rates.
Example 1: S$50,000 Account Balance
For the sake of illustration, let's assume you have S$50,000 in your UOB One Account - if you fulfil all the criteria for earning maximum interest, you will currently earn approximately S$1,216 of interest each year. With the upcoming changes on 01 August 2018, you will only earn 16.5% lesser interest (S$1,015 instead of S$1,216) each year. How is that possible? Well if you were to look at the table of interest rates above carefully, you would notice that the bonus interest rates are now offered in different brackets - you used to be able to earn 3.33% p.a. interest on the last S$20,000 of your balance but right now you are only getting 2.30% p.a. interest on the last S$5,000 of your balance.
Example 2: S$75,000 Account Balance
Of course with that being said, account holders with S$75,000 of balance will now be able to enjoy an increase in the accumulated interest for the year. Currently, if you had S$70,000 in your UOB One Account (and assuming you do fulfil the criteria for maximum interest), you would earn approximately S$1,228.50 of interest in a full year. However, with the upcoming changes on 01 August 2018, you will be earning up to 48.7% more interest (S$1,827 instead of S$1,228.50) for the year ahead.
3. Should I Switch from OCBC 360 to UOB One? It Depends.
If you currently have S$70,000 sitting in your OCBC 360 account and you do not insure or invest with OCBC, you should consider a switch if you are not big on miles (in which case, I would say is a terrible decision). In order to trigger the maximum bonus on the UOB One account, you are required to spend at least S$500 in eligible purchases on your UOB One Credit Card or any one of the following credit cards:
- UOB Lady’s Card
- UOB YOLO
- UOB Debit Card
- UOB Direct Visa Debit Card
- UOB Mighty FX Debit Card
As you can probably tell from the list of cards available above, most of them do not reward you with miles (apart from the UOB Lady's Card) and therefore since I am crazily reliant on the OCBC VOYAGE Card and hitting S$500 each month on it is a no-brainer, I am keeping my 1.85% interest with OCBC 360 instead. Sure OCBC 360 might only award bonus interest on the first S$70,000 of my account balance and even though the UOB One Account is more superior since it allows you to benefit from bonus interest rates on the first S$75,000, it simply does not work out for me.