Travelling to US Next Year? Earn 2.5% p.a. interest and Lock-in Attractive Rates for USD Transactions in 2019

If you are planning to travel to the US next year, it may be a good idea to lock-in attractive USD/SGD rates well before your trip - especially when the DBS Multi-Currency Account (MCA) is offering a promotional interest rate of 2.50% p.a. from September to December 2018 on eligible fresh funds deposited in the account. The MCA comes with a range of different benefits, so if you are expecting to transact in USD in the year ahead, you will probably want to take advantage of this promotion to lock-in the attractive interest rates and save up for your upcoming expenses in the meantime. 

 Photo Credit: DBS 

Photo Credit: DBS 

1. 2.50% p.a. Interest Rate on Fresh Funds USD Deposits

Simply register online and deposit at least USD 10,000 into your DBS MCA by 31 August 2018. If you are looking at doing some significant investments, the bonus interest is capped at fresh fund deposits of up to USD 1,000,000. In fact, to further sweeten the deal, DBS is also offering an FX rebate of S$25 when you exchange a minimum of USD 10,000 in your MCA from SGD on all eligible fresh fund deposits made before 31 August 2018.  The promotional interest rate of 2.50% p.a. will apply for eligible fresh funds held between 01 September 2018 to 31 December 2018.

 Photo Credit: DBS

Photo Credit: DBS

Here is an estimation on how much you could potentially earn from eligible deposits: 

Estimated Accrued Interest (September - December 2018)
USD Fresh Funds Interest Rate Days Annualised Day Count Estimated Interest Earned
US$10,000 2.50% p.a. 122 360 S$84.72
US$20,000 S$169.44
US$50,000 S$423.61
US$100,000 S$847.22
US$1,000,000 S$8,472.22

2. Lock-in Preferred USD Rates

One of the most attractive features of the DBS MCA is the ability to lock-in preferred FX rates at the time that you deem fit. The MCA allows you to buy and save up to 13 currencies (including SGD) every day and at any time of the day. To fully take advantage of this benefit, you should buy the currency you want when the rates are favourable (especially when you expect it to appreciate in the future). 

If you are a mile or point chaser like me, the MCA can help you lock-in favourable USD/SGD rates for upcoming flash sales on hotel points and miles. Since these sales are fairly unpredictable and they typically last from a few days to a couple of weeks, the USD/SGD rate may not always work in your favour. To put this quite simply in an example, Starwood Preferred Guest (SPG) was running a 35% discount on Starpoints a couple of weeks ago but I did not end up buying them because the USD/SGD rate was too high. 

Price 19 July 2018
USD/SGD @ 1.37433
29 January 2018
USD/SGD @ 1.30673
Usual Price
(30,000 Starpoints)
USD 1,050 SGD 1,443.05 SGD 1,372.07
Discounted Price
(35% off)
USD 682.50 SGD 937.98 SGD 891.84

Figures are based on a previous sale by Points.com and are for reference only.

SPG members are allowed to purchase up to 30,000 Starpoints each year - the regular rate is USD 35 per block of 1,000 Starpoints. So, if you do maximise on these purchases (at 30,000 Starpoints), you are looking at spending USD 1,050. During the time that SPG was running a 35% sale, the USD/SGD peaked at 1.37433 on 19 July 2018 and if you were to purchase the points on that day, you would be spending at least SGD 937.98 (before FX fees are applied). However, if you had taken advantage of the much more favourable rates in January and locked-in USD with the DBS MCA, you could potentially purchase the same amount of points during the promotional period for less.

3. FX Alerts

How exactly do you know when to lock-in those rates? Just set up FX Alerts to notify you once the currency you’re looking to buy reaches your preferred rate, and immediately log in to the digibank mobile app to make the exchange! It may not be the most convenient to head down to a money changer when favourable rates are available, but with the DBS MCA, you can do the exchange anytime and anywhere (even when you are on a beach in Miami with a drink in hand!) – no more having to search for the money changer that offers the best exchange rates and worrying about getting scammed in the process!

4. Avoid Conversion Fees

With your linked DBS Visa Debit Card, you can then use it for foreign currency transactions - there will be no additional FX transaction fees or hidden charges involved. In comparison, when using your credit cards overseas, you typically get charged a platform fee (which differs depending on whether the card is a Visa, Mastercard or American Express) ranging from 2.80% to 3.25% typically. Additionally, banks also charge a foreign currency transaction fee which can be avoided if you use a MCA-linked DBS Visa Debit Card. Moreover, your purchases are automatically deducted from the respective currency account. As an example, if you have USD 10,000 in your MCA and you buy a USD 1,000 product, you will have USD 9,000 left in your account - very simple!

5. Access Cash when you Need It

Even though the world is certainly moving towards becoming a cashless society, there are instances when you need actual cash - e.g. tipping housekeeping, small restaurants or even just paying for a taxi in some cities. When you have sufficient balance in your DBS MCA, you can simply withdraw money from an ATM without incurring additional FX fees, but do note that banks typically charge a flat fee for these withdrawals. While this is certainly not the only method that you should consider getting cash for your trips, it does make it easier in events where you want the option to get extra cash but do not wish to carry large stacks of money around for safety reasons.

6. Travel Hassle-free and Save More

The DBS MCA helps you travel with ease, so you can focus more on the things that matter most to you. In fact, customers are currently able to take advantage of a 5% cashback offer on foreign currency spend (online or overseas) when they spend on their linked DBS Visa Debit Card.

Whether you are planning to visit the US, use the USD for investment or simply going to indulge in some online shopping on US sites in the year ahead, now is a great time to get yourself some US dollars via the DBS MCA since it is currently offering a supersized 2.50% p.a. interest rate for deposits above USD 10,000. 

I am not saying that you should drop all your credit cards and switch to MCA immediately (there is obviously still a place for credit cards that accrue miles and points) but it is seriously a good alternative when the situation calls for it. Save up for your next destination and take advantage of the limited-time offers that come with it. Don’t have an MCA yet? Sign up now and get a S$20 cash gift!

Terms and Conditions apply. Insured up to S$50k by SDIC.

This post was created in collaboration with DBS but all views are independent.