Monday 4 May 2015

OCBC changes the terms of the OCBC360 account again

And so, OCBC introduced the new 2 terms to the OCBC360 account which would take effect immediately on 1 May.

Here is a snapshot of the general changes.

OCBC360 new terms
So, here is my take on the new terms. Generally, I feel that the 1.2% for the salary credit is a good move in the right direction to give account holders a greater motivation to keep money in their OCBC360 account, that is assuming they are currently working with salary being credited to the account. This is very easily achievable along with with the pay 3 bills condition which allows us an easy 1.75% on our monthly balance.

As for the other terms, in my opinion, they are 'bonus' interest as they are not as easy to be achieved. I don't like the feeling of being forced to spend in order to achieve higher interest, which could prove to be counterproductive to our saving efforts. For some, it may make sense if they would spend $500 monthly anyway, so it would be recommended they charge them to their OCBC card in order to achieve the bonus 1%.

The insurance/investment terms do not make sense to me at all. Obviously, OCBC had to find ways to make money out of us in order to allow us to get another 1% on out monthly balances. This given that at minimum, we have to spend at least $2000 in order to achieve that extra 'bonus'. Definitely forcing us to spend in order to achieve interest, clearly a no no for me.

The interesting thing is the last term. It states you earn 1% on the incremental amount of your monthly balance. Basically, we need to consistently increase our monthly balance by the same amount in order to earn 1% on that monthly incremental amount. It amounts to a much more paltry sum than what we could earn from the other terms, but its definitely better than nothing. It also encourages account holders to save consistently, which is definitely a good habit to foster. Furthermore, since most account holders will be already crediting their salary, maintaining the salary credited amount as much as possible without spending too much would be rewarded with the incremental 1% interest.

Better? Well, not for me..
Personally, I will be attaining the 1.75%, as I would not like to spend in order to achieve the other terms. Perhaps when my spending increases, I might consider the credit card bonus. In addition, I will qualify for the incremental bonus, which would be a paltry sum, so I will not add that as the effective interest rate on my monthly balance as a conservative estimate. And so, I will be earning 1.75% on the funds in my OCBC360 account, down from 2.05% earlier. Oh well, at least its better than next to nothing in other saving accounts.

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