DBS BYOB+SAYE
account is targeted to fresh graduates that have just started working. Account
holder can earn up to 4% for their savings! Let’s explore in detail how this
can be achieved from this account.
Account
Pre-requisites
This account is
obviously targeting young working adult
with age requirement from 18 to 30 years old. Prior to that, you must not have
salary crediting arrangement with DBS/POSB between 1 September 2016 and 28
February 2017. (Sadly, the bank does not reward their loyal customers and aim
to acquire new customers instead.)
How it works
2)
Credit your monthly salary to your saving account
3)
You must open a SAYE account (This is a separate
saving account where you set aside monthly saving amount deducted from your
current saving account)
4)
The savings in your SAYE account earn monthly interest
of 2% p.a. (Interest credited yearly to SAYE account)
5)
On top of that, by using DBS/POSB card for at least 5
transactions a month earn you another 2% p.a. for the balances in your SAYE
account (interest credited monthly to your PayLah! Account)
Interest
breakdown calculation
The above table is
taken from DBS BYOB website. This table illustrate very well how interest is
calculated.
To qualify for
the additional interest 2% p.a.
(Interest compounded monthly but credited yearly to SAYE account) and the bonus interest 2% p.a. (Interest
credited monthly to PayLah! Account):
·
Monthly salary crediting to current DBS/POSB account
·
Do not make any withdrawal from SAYE account
·
Ensure monthly contribution to SAYE account is met
·
At least 5 transactions made by POSB/DBS card monthly
(Applicable to bonus interest only)
Additional points
to note:
·
If you make any withdrawal from SAYE account at any
given month, additional interest will be forfeited from month 1 to that given
month you made withdrawal while bonus interest will be forfeited for that month
·
Additional interest will not be forfeited if at any
given month, there is no salary crediting or monthly contribution to SAYE
account (likely to happen if you are in job transition)
·
Bonus interest will be forfeited for that month if 1
of the above criteria is not met
Case study
The above table is taken from DBS BYOB website. This table illustrate very well how much interest you can earn by the end of 2 years with respective monthly contribution.
Scenario 1: A
fresh polytechnic graduate that has just started working drawing a monthly
salary of $2,200 and a take home pay of $1,760 after CPF deduction. He decided
to set aside $700 which is 40% of his take home pay to be contributed monthly
to his SAYE account. Assuming all criteria are met, he would have earned a net
interest of $735.29 and an accumulated saving of $17,535.29 by the end of 2
years. That accumulated savings can be used to finance further education into
University.
Scenario 2: A
fresh university graduate that has just started working drawing a monthly
salary of $3,000 and a take home pay of $2,400 after CPF deduction. He decided
to set aside $1,000 which is 40% of his take home pay to be contributed monthly
to his SAYE account. Assuming all criteria are met, he would have earned a net
interest of $1,062.93 and an accumulated saving of $25,062.93 by the end of 2
years. That accumulated savings can be used to finance future marriage
expenses.
How can you
maximise the return you can get from this account
·
Set a realistic
saving amount to be contributed to SAYE account monthly (Setting aside too little
will result in return not fully utilised while setting aside too much will
result in withdrawal from SAYE account which will forfeit the interest earned)
·
Do not ever make
withdrawal from your SAYE account! The objective of this account is to enforced
discipline in saving. If any withdrawal is made from SAYE account, interest
will be forfeited and return from this account will be affected greatly.
·
Park any excess
savings from your DBS/POSB saving account into higher interest account such as
CIMB FastSaver account. (Refer to saving account tab above to find out more
about this account) As you can’t make an additional deposit to your SAYE
account aside from the monthly contribution to SAYE account, you might have
some excess savings lying around in your current DBS/POSB account. On top of
that, probably on certain month, you might end up spending lesser and left with
excess savings as well. It’s best to park these excess savings to higher
interest account.
Conclusion
Comparing
against account targeting young adults such as OCBC 360 account as well as UOB
1 account, the criteria is less
stringent to qualify for bonus interest on this account. For example, both
OCBC and UOB account require salary crediting of at least $2,000 monthly while
DBS doesn’t have any minimum salary crediting amount. On top of that, to
qualify for further bonus interest, UOB & OCBC customers are required to
spend $500 monthly on their credit card while DBS only require customers to
make 5 transactions monthly. (which can be easily met)
The projected
return of this account is not exactly 4% p.a. because the interest earned is
the monthly contribution you made to SAYE account instead of your total saving.
Taking in consideration you have made a monthly contribution of $1,000 to your
SAYE, you will earn $1,062.93 by the end of the 2 year which is 4.43%
($1,062.93/$24,000) and around 2.2% per year.
Although the
2.2% interest is much lesser than the projected interest, the return of this account is extremely attractive as compared to UOB
and OCBC account. You can only achieve a return of around 1.5% p.a. with UOB
and OCBC account.
This saving
account scheme run for 2 years and after which the scheme will end and the
accumulated saving & interest from SAYE account will be transferred back to
DBS/POSB saving account. This scheme is extremely useful to help young working
adults to kickstart saving habit as well to accumulate a substantial wealth after
the 2 years. Do consider this account if you are discipline enough to set aside
savings for the next 2 years and do not make any withdrawal.
You can click on this link to sign up DBS BYOB + SAYE account. On top of that there's a current ongoing promotion of $88 cash gift if you sign up before 31 Oct!
