Savings

Revision of Terms and Conditions for Maybank SaveUp Account

By The Boy Who Procrastinates - March 22, 2019


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.

Therefore, the total interest an account holder can expect to earn on the Maybank SaveUp Account is the sum of the base interest and the bonus interest. 

 Currently, the Maybank SaveUp Account offers the best bang for the buck among the active savings accounts, at approximately 3% for the first $60,000 balance. This is taking into assumption that the account holder is able to fulfill 3 qualifying products. 

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

  • The maximum account balance that can earn the bonus interest will be revised to the first $50,000. 
This is a distasteful revision as the maximum amount of bonus interest one can earn will be scaled down considerably. Any balance above $50,000 will now earn the paltry base interest of 0.3125% only. As such, it probably does not make sense to have any amount beyond the first $50,000 in the savings account.

  • Meeting the requirements of either/both of the services of GIRO and Salary Crediting will now be considered as 1 Qualifying Product.
Now, this is definitely a deal-breaker! Merging the only few attainable criteria into one is most certainly an off-putting revision for most of the account holders. With the plummet of bonus interest rate from the dissatisfaction of the 3rd qualifying product, the Maybank SaveUp Account will likely lose its allure as a high-yielding savings account. 

  • 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


 The table summarizes the 3 main areas of alteration made to the savings account. All in all, it is apparent that all these changes are unwelcome and would be detrimental to the interests of the account holders. 

 Personally, I find these negative changes appalling (especially the merging of GIRO transaction and salary crediting into 1 qualifying product) which may cause Maybank to lose its competitive edge and appeal in the domain of bank deposits. 

 For account holders who have existing loan/insurance arrangement with Maybank, they will still be able to enjoy 3% effective interest rate on the first $50,000 which is relatively substantial if you ask me. The reasonable course of action for them is to enjoy the bonus interest for a year before looking out for better alternative. 
If you are not tied down by such arrangement, the steep decline in effective interest rate is probably a strong justification to start looking out for better substitute. Neither the revised SaveUp Account nor the Privilege SaveUp Programme is as rewarding as the other savings products that are being offered on the market. 1 April may be a cue to switch to a high-yielding active savings accounts or passive savings accounts. 

Impact of the Revision on Interest Rate

(Click to enlarge)

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

Following from the previous post on the comparison on active savings accounts, let's see where does Maybank SaveUp Account stand with the upcoming revision. 


With a 16.67% decline in the maximum account balance for which the bonus interest is accorded, the Maybank SaveUp Account has dropped to the last place in this segment, tied with DBS Multiplier Account. Comparatively, It is lagging far behind Standard Chartered Bonus$aver Account ($100,000) and UOB One Account ($75,000). 


With the dissatisfaction of the 3rd qualifying product, the effective interest rate that one can expect to earn on Maybank SaveUp Account has taken a nosedive to 1.05%, fallen far behind that of its peers on the chart. 

Currently, you can get your money's worth with UOB One Account at 2.44% effective interest rate. OCBC 360 Account is the runner-up at 2.3% but with the sustainability of the Step-Up Bonus a cause for concern. 


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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.

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3 comments

  1. Anonymous25 March 2019 at 22:04

    TLDR: F**k off Maybank with your ridiculous revisions...

    ReplyDelete
  2. Pyroxene1 April 2019 at 21:36

    Nice writeup. Not sure what Maybank is doing here, shooting themselves in the foot with these changes.

    ReplyDelete
    Replies
    1. The Boy Who Procrastinates2 April 2019 at 08:56

      I know right! In this current interest rate environment, most banks are making their products more competitive but Maybank seems to be doing the opposite...

      Delete