## Revision of Interest Rates for UOB One Account

By The Boy Who Procrastinates - July 22, 2018

In the relentless onslaught of time, one could argue that the only constant to the landscape of our world is change. First launched in April 2015, UOB will be revising the interest rates on the UOB One Account for the first time, in less than 2 weeks with effect from 1 August 2018. This article aims to provide an overview of the upcoming changes and whether the existing account holders stand to benefit from the revision. You may also wish to refer to the t&c for more information.

## Revision of Interest Rates for UOB One Account

*Interest Rate is inclusive of the base interest rate of 0.05%

The most striking change to the interest rate for the UOB One Account is the increment in the maximum account balance for which bonus interest is accorded. You may now earn higher interest on your first $75,000 instead of the current $50,000 cap. It appears that the revision would align with the upcoming increase to the deposit insurance coverage to $75,000 per depositor from 1 April 2019.

The criteria to earn interest on the UOB One Account have remained unchanged with the minimum spending of $500 on UOB credit cards as the primary requirement. The secondary prerequisite to earn additional interest continues to offer an option between the salary crediting of at least $2,000 or the payment of 3 bills via GIRO on a monthly basis.

You would probably have noticed that the revised account balance for the interest rate are broken down into smaller tranches of $15,000 instead of the current $20,000. Even though the revised interest rate will now start from 1.85%, the interest step-up for each tranche (up to the first $60,000) has been drastically reduced to 0.15%.

If we were to assess the current and revised effective interest rates for each $10,000 accumulated, it will be apparent that the revision of interest rate creates an unfavourable situation for account holders with $40,000 to $50,000 balance in their accounts. At this balance amount, they would face an interest rate decline of 0.23% to 0.40%. The juicy interest rate of 3.88% will only be applying to the greater balance amount of between $60,000 to $75,000.

By plotting the trends of the current and revised interest rates, we can observe that the current interest rate is higher between the account balance of $32,500 and $57,500. For someone with the balance that falls between this range in his bank account (e.g., $50,000), placing his savings in either Maybank SaveUp Account (3%) or BOC SmartSaver (2.35%) would probably be a better choice to maximise the effective interest rate at this balance amount. Of course, this would also depend on his savings/spending/earning pattern to fulfill the relevant criteria.

Overall, the effective interest rate over the maximum account balance has raised by a paltry 0.01%. (0.004% to be exact; the difference of 0.01% is derived from the rounding down of the current effective interest rate and the rounding up of revised effective interest rate). This is evidenced from the peaks of the current and revised interest rate trends which appears to be of similar values.

Nevertheless, I would still regard this as a positive change due to the cap increment for the higher interest rate. The additional $25,000 will be put to work harder if you have spare cash lying around.

## Comparison with other Active Savings Accounts

Following up from the previous post on the comparison of active savings accounts, let's see where does UOB One Account stand with the upcoming revision.

With the 50% increment in the maximum account balance for which the bonus interest are accorded, the UOB One Account has clinched the second place in this segment, with a slight lead ahead of OCBC 360 Account. For the greatest maximum account balance, the Standard Chartered Bonus$aver Account still leads the pack at $100,000.

Given the meagre 0.01% raise in the effective interest rate for UOB One Account, there is insignificant change to the effective interest rate ranking corresponding to each bank's respective maximum account balance as previously discussed.

Maybank SaveUp Account still offers the best bang for the buck at 3% effective interest rate, with a rather taxing requirement of at least $300 GIRO payment or the qualification of any of the other 6 products/services. UOB One Account still retains the runner-up at 2.44% with comparatively relaxed criteria.

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**Disclaimer:**Kindly note that this is not a sponsored post. The author is in no way affiliated with the stated financial institution and does not receive any form of remuneration for this post.**The Boy who Procrastinates**has compiled the information for his own reference, with the hope that it will benefit others as well.