Sunday, 24 May 2015

OCBC360 vs UOB One: The Verdict

I hope the web calculator that I put up last week has been useful in helping readers to decide whether the OCBC360 or UOB One account is better for them. I have since enhanced the web calculator to include credit card rebates. However, the focus of today's blog post is not on the web calculators, but on the guidelines and charts to assist readers to understand better the scenarios in which either of the accounts is better.

If you have played with the web calculator, you would realise that while the calculator can tell you precisely which account is better for a certain scenario, it does not tell you under which scenarios would one account be better than the other. Furthermore, the amount of money that you can have in the account is not static; it varies over a range depending on cashflows. Depending on the amount of money that you have in the account, one account might pay better for certain account balances while the other account might pay better for other account balances even if all other parameters remain the same. This is where guidelines and charts can provide better clarity than web calculators.

To recap, there are 4 parameters affecting the interest rate than the banks will pay on the account. These are:
  1. Credit your salary of at least $2,000
  2. Pay at least 3 bills through GIRO
  3. Spend at least $500 on credit cards
  4. Invest or insure through the bank

On top of that, there are different interest rates for different tiers of account balances. In total, there are 5 tiers, namely $10,000, $30,000, $50,000, $60,000 and above. Please refer to OCBC360 vs UOB One: The Calculator for the interest rate payable for the different parameters and account balance tiers. Due to the numerous possible permutations, it is difficult to tell which account pays better. The figure below shows at one glance the effective interest rate for the different parameters and account balances.

Effective Interest Rate for Different Banking Activities & Savings

The column for "OCBC" shows the interest rate for the various parameters for account balances up to $60,000. The columns for "UOB" show the effective interest rate for the various parameters and account balances up to $60,000. As an example, if you satisfy all the parameters and have $40,000 in the account, UOB will pay an effective interest rate of 2.21% on the $40,000 balance.

For every cell in the "UOB" columns, they are shaded either in red, yellow or blue. The colours show whether OCBC pays better (red), UOB pays better (blue) or equal (yellow) for that scenario. Thus, for rows that have a single colour across all columns, it means that one bank pays consistently better for all account balances and you can safely deposit your money with it. For rows that change in colour, you need to be more precise to know which account pays better. For example, in the row "Yes/ No/ Yes/ No", OCBC pays better for balances less than $20,000 while UOB pays better for balances more than $20,000. If your balances fluctuate around $20,000, then no single account stands out and either account will be suitable for you. For a precise computation of the interest rate payable by both accounts, please refer to the web calculator: The OCBC360 or UOB One Calculator (Basic).

Thus, OCBC pays better for most of the scenarios while UOB pays better in a few specific scenarios. Let us hope that UOB will enhance its offerings to catch up with OCBC!

Moving on to the enhanced web calculator as mentioned earlier, it takes into account credit card rebates offered by specific credit cards for a more comprehensive understanding on which bank (savings and credit card) pays better. For OCBC, the Frank credit card which pays 6% rebate for online spending is assumed in the computation. For UOB, it is the UOB One card which pays up to 3.33% in rebates. While the enhanced web calculator provides a more comprehensive analysis than the basic one, there are more rules and conditions to be satisfied. Readers are advised to read the terms and conditions of the 2 credit cards to understand when rebates are payable:


  1. What happens if let's say I pay $500/month on 11 months, but 1 month I spend $400? Will I lose the 0.5% interest for OCBC and whatever benefits for UOB One?

    1. The savings interest rates are assessed on a monthly basis. So, based on the scenario you mentioned, you will get the higher interest rate for 11 months for both OCBC and UOB.

      For the UOB One credit card rebate, you need to maintain $500 spending for 3 consecutive months to be eligible for the 3.33% rebate in that quarter. So, based on the scenario above, you will get the rebate for 9 months.