On the first day of 2020 and I have already got my first negative news.
Last year May 2019, I wrote about how you can have greater interest in more of your savings if you fulfill one additional criteria for your DBS Multiplier Account. (Read Why I continue to save with the Boosted DBS Multiplier)
It seems there is some bad news on the horizon, at least for myself.
So here are the changes to DBS Multiplier
Update: There were some clarifications done on DBS’s Facebook Group the Burrow. I will paste the clarifications here:
If I were to convert to English, it means that dividends from your local stocks, bonds, and Singapore Savings Bonds held in your CDP will be under the income category now.
The second thing is that if you have only fulfilled the salary credit plus 1 category of transactions, the interest is applied on only $25,000 instead of $50,000.
If you manage to satisfy 2 spending category and above, the bonus interest is applied on $50,000 still.
To make it easy, you read what I have written against this infographic in the last article.
Here is Roughly the Impact
- If you just satisfy the minimum of salary credit and 1 more category of transactions, the amount you can earn interest on is halved. This is NOT GOOD.
- For those that previously do not qualify for salary credit, the interest from your Singapore Savings Bond Ladder (refer to my past DBS Multiplier article) or if you have consistent almost monthly dividend income, DBS Multiplier is unlocked for you. This is because, at the minimum, you have to credit salary into any DBS/POSB account. The dividends/interest income now qualifies on top of your work income. This is GOOD.
- If you qualify for the current Investment category because you get consistent monthly dividend income or do the Singapore Savings Bond Ladder, you lost one category. You will qualify for Investment if you purchase their product. This is NOT GOOD.
Your effective interest might be reduced. This is a bit vague because they did not say what happens if you satisfy salary credit + more than 1 category of transaction ? Do you earn a different bonus interest on the first $25,000 and the next $25,000 or the same bonus interest on $50,000?
There is some good news for you, and yet for some, this is not good news.
If you have a home loan mortgage with DBS, insurance or investment, plus credit card spend with them but do not have salary credit, you could have a way to engineer the income with the Singapore Savings Bond ladder.
You can now earn higher interest on $25,000 to $100,000 of your money.
However, if you are like me, who qualifies for the Investment category due to dividends and interest income, you just lost one category. This means that DBS Multiplier will still work but the interest is applied only on $50,000 instead of $100,000.
My sensing is that this move would push me to try and qualify for one more category that is tougher.
These categories would either be home loans, investment (the Manulife products kind) and insurance (the Manulife products kind). It pushes us to their higher-value products.
If this is too much for you, its time to look for some alternatives. Personally I am disappointed with the change in my situation and the timing of it.
I invested in a diversified portfolio of exchange-traded funds (ETF) and stocks listed in the US, Hong Kong and London.
My preferred broker to trade and custodize my investments is Interactive Brokers. Interactive Brokers allow you to trade in the US, UK, Europe, Singapore, Hong Kong and many other markets. Options as well. There are no minimum monthly charges, very low forex fees for currency exchange, very low commissions for various markets.
To find out more visit Interactive Brokers today.
Join the Investment Moats Telegram channel here. I will share the materials, research, investment data, deals that I come across that enable me to run Investment Moats.
Do Like Me on Facebook. I share some tidbits that are not on the blog post there often. You can also choose to subscribe to my content via the email below.
I break down my resources according to these topics:
- Building Your Wealth Foundation – If you know and apply these simple financial concepts, your long term wealth should be pretty well managed. Find out what they are
- Active Investing – For active stock investors. My deeper thoughts from my stock investing experience
- Learning about REITs – My Free “Course” on REIT Investing for Beginners and Seasoned Investors
- Dividend Stock Tracker – Track all the common 4-10% yielding dividend stocks in SG
- Free Stock Portfolio Tracking Google Sheets that many love
- Retirement Planning, Financial Independence and Spending down money – My deep dive into how much you need to achieve these, and the different ways you can be financially free
- Providend – Where I currently work doing research. Fee-Only Advisory. No Commissions. Financial Independence Advisers and Retirement Specialists. No charge for the first meeting to understand how it works
- New 6-Month Singapore T-Bill Yield in Late-September 2023 Should Stick to 3.75% (for the Singaporean Savers) - September 21, 2023
- A Concentrated, High-Quality Fixed Income Financial Independence Income Strategy Has Enough Uncertainty - September 20, 2023
- Why Do We Save Money After We Reached Financial Independent Status? - September 18, 2023