With a blink of an eye, we have zoomed past the first quarter of the year. One of the significant events that have taken place thus far would include the Trump-Kim summit that has occurred for the second time in Feb 2019. The meeting was however cut short with no agreement reached.

The US Fed has recently indicated on 20 March that the interest rate will be held steady with no rate hike this year, putting the range of fed fund rate at 2.25% to 2.5%. Even though it may have been a welcoming reprieve for investors in the REITS market, the Fed has signalled signs of weakening economic activity and global growth uncertainty.

In the local context, the STI has surged from 3038.89 at the start of the year to 3212.88 in March, ending the first quarter with a rise of 5.73%.

Similarly, the SGX S-REIT 20 Index has been on a steady rise from 1212.436 in January to 1346.046 in March, recording a gain of 11.02% in just three months. 

Action in Q1

Portfolio

The off-loading of M1 has been indicated by a different colour ⎼ red to represent capital outflow from the portfolio. This should provide a clearer picture on the movement of the portfolio value. 

The first quarter has been marked with preponderance of positive sentiment in market's favour. Despite the divestment of M1 and the lack of capital injection, I am thankful that the market value of my portfolio has increased by 2.38% to $102,417.61 in the first three months of 2019. 

Against the backdrop of STI ETF's YTD time-weighted return of 3.14%, the portfolio has returned 7.43%, a margin of 4.29%. 

Dividend

Total Dividend Collected : $1,235.21
Average Dividend/Month : $412.74 (over 3-months period)

* Exchange Rate 
1 EUR : 1.5225 SGD

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First launched in 2016, Maybank will be revising the terms and conditions on the Maybank SaveUp Account for the second time with effect from 1 April 2019. 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 revised Terms and Conditions and FAQ for more information. 

Summary of the Current Interest Rate mechanism for Maybank SaveUp Account 

Before examining the upcoming revision to the Maybank SaveUp Account, it is probably beneficial to have a good understanding and recap to its current interest rate mechanism. For ease of reference, I will briefly summarize on how an account holder can earn interest with this savings account. 

• Base Interest: It is awarded according to the different balance tiers. Other than the minimum daily average balance of $1,000 (to avoid the fall below fee), there is no other requirement imposed to earn the base interest. 

• Bonus Interest: The account holder receives bonus interest based on the number of qualifying products taken up. The huge jump in the bonus interest (1.95%) comes from satisfying the 3rd prerequisite. 

There are a total of 9 qualifying products. The conventional categories are the crediting of salary, GIRO transaction and credit card spending while the remaining 6 products involve loans, unit trust or insurance. 

The maximum account balance that earns the bonus interest is capped at first $60,000.

Revision of Terms and Conditions for Maybank SaveUp Account from 1 April 2019

• Structured Deposits will be replacing Unit Trust Regular Subscription Plan as a Qualifying Product. There is a minimum investment amount of at least $30,000 and the reward period is 3 months. 

This change would probably not be affecting the masses unless you are relying on Unit Trust Subscription Plan as one of your qualifying products. In any case, it may be unwise to initiate a structured deposit placement for the sole purpose of achieving high interest on the SaveUp Account for 3 months. 

• All loan and life insurance will earn bonus interest for 12 months following the month of loan disbursement / policy inception. 

This revision certainly spells bad news for account holders who have taken loan or purchased insurance from Maybank (e.g. mortgage/education/car/renovation loan). For existing loan/insurance arrangement, they will continue to be eligible as qualifying products until 31 March 2020. Purchasing new insurance or applying for new loan just to earn the bonus interest is definitely imprudent since these are long-term commitments.  

Maybank Privilege SaveUp Programme

In addition, Maybank will be introducing the revised Maybank Privilege SaveUp Programme concurrently from 1 April 2019. The targeted group will be Maybank Privilege customers with the SaveUp Account. You may also wish to refer to the revised Terms and Conditions and FAQ for more information. 

According to Maybank's website, the eligibility to become a Maybank Privilege customer is to have at least $50,000 of deposits/investments. 

Similar to the regular SaveUp Account, the Privilege version offers the same base interest rate according to balance tiers and bonus interest rate based on the number of qualifying products taken up. 

However, the maximum account balance that can earn the bonus interest will be revised to the first $100,000. 

The other main difference lies in the details of the qualifying products. It offers 10 different categories of which 7 are related to Insurance/Investment/Loan. The remaining 3 options are as follows: 



As illustrated, the salary crediting/GIRO and credit card spending would require a greater transaction amount in order to satisfy as qualifying products.

Interestingly, there is a new category to maintain an average daily balance of $200,000 per month. However, with this being a princely sum, it can come as an arduous challenge for most account holders. Furthermore, even if you have such fortune at your disposal, it begs the question: Is it worth it to deposit in the SaveUp Account? 

If the Privilege SaveUp Programme does not address your needs, you may request to opt out of it and remain with the regular SaveUp Account.

Overview of the Revision

Let's assume the profile of an account holder who credits his salary to the Maybank SaveUp Account, performs GIRO transaction and achieves the required credit card spending. Like most people, he does not have an existing loan/insurance arrangement and has no intention of doing so. 

Graphically, it is evident that the revision of the terms and conditions for the savings account creates an unfavourable situation for this average account holder.

The revised effective interest rate has plunged approximately 1.95% as he can only fulfill 2 criteria instead of 3. From 1 April onwards, he will be reaping approximately 1.05% for the first $50,000.

If he has opted for the Privilege SaveUp Programme and increased his credit card spending and GIRO transaction, he would still be earning 1.08% on the first $100,000. Even if he has managed to accumulate $200,000 balance, the effective interest rate only peaks at a meagre 1.38%. 

Comparison with other Active Savings Accounts

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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.

Prospect Theory

If you do not wish to miss out on any articles, you may consider following the facebook page for timely update. 

Disclaimer: Kindly note that this is not a sponsored post. The author is in no way affiliated with the publisher/author 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.