The Boy who Procrastinates (TBWP): April 2019

Saving More on your Daily Commute by Public Transportation

By The Boy Who Procrastinates - April 19, 2019

I spend approximately $60 to $80 on my daily commute by public transportation on a monthly basis. Even though it does not constitute a significant portion of my expenditure, I have always thought that it will be worthwhile if we are able to earn rebate on such essential expenses.

This is especially more so with the recent fare hike for bus and train from 29 Dec 2018. The minimum transport fare is currently $0.83, which makes short-distance travelling (< 3.2km) less cost effective on a distance-based fare scheme. Familiarising ourselves with the following transfer rules has also become a crucial element to achieve greater savings on our daily transport cost:

Maximum of 5 transfers within a single journey, with 45 minutes allowance for transfer between MRT station and bus service or between different bus services, and 15 minutes allowance for transfers between different MRT stations.
Completion of journey must be within 2 hours from the time of initial boarding
Should not board the same bus service number consecutively
Should not exit and re-enter at the same MRT station, except for transferring lines at Bukit Panjang, Newton or Tampines MRT interchange stations

However, most financial institutions have excluded the topping up of Ez-Link as qualifying transactions for their credit cards. Other than the traditional method of topping up your Ez-link cards, there are a few other channels to earn rebate when travelling.

EZ-Reload

It is a service by Ez-Link that automatically tops up a user's registered Ez-Link card when it has insufficient value. Unlike the topping up of Ez-Link card via credit card payment at General Ticketing Machine, most financial institutions consider EZ-Reload charged to your credit cards as eligible retail spends.

With the removal of the $0.25 convenience fee with every top-up made using MasterCard and Visa credit or debits cards with effect from 1 Aug 2018, it is now plausible to utilise EZ-Reload to top up your Ez-Link card. Here are some of the credit cards with achievable minimum spending requirement which can earn rebates with EZ-Reload.

Citibank SMRT Card

Being the only credit card that ties up with the transport company in Singapore, it awards 2% rebates on EZ-Reload transactions over $30 with a total spend of at least $300 per month; 1.7% rebates for monthly retail purchases less than $300. The rebate comes in the form of SMRT$ which can be redeemed as shopping vouchers or cash rebate. The conversion rate is 1 SMRT$ to $1 worth of voucher/cash rebate.

Standard Chartered Unlimited Cashback Credit Card

With no minimum spending requirement, this credit card awards 1.5% cashback on EZ-Reload transactions. Plain and simple.

Complementary apps that help save money on the go

Besides EZ-Reload, I have personally used the following mobile apps/websites that can help to save money when travelling:

Ez-Link App

This is useful to keep track of the Ez-Link cards that you have. It displays the primary information of your cards such as the stored value amount and expiry date.

Even though this mobile app is able to keep track of your travel history, I personally consider the transaction log to be rather baffling. Instead of displaying the total transaction amount of the trip, it depicts lines of positive and negative amounts from which the fare calculation of a trip can be unintuitive and complicated.

Undeniably, one of the main features of the app is the reward system. Users are able to earn 1 point with every $0.10 spent with the Ez-Link card. Under the Rewards tab, there are a plethora of products which you can redeem, ranging from $3 off ComfortDelgro taxi fare to 15% off Zalora.

More often than not, I will redeem a free Curry puff from Old Chang Kee which cost 800 points. To put it into perspective, a Curry-O cost $1.50, translating to a conversion rate of approximately $53 spending on public transport to $1 worth of redemption. It is frankly not an attractive rate but I will still gladly accept it given the inescapable expense on transport.

Travel Smart Rewards (TSR)

It is basically an incentive programme by LTA that allows users to earn points for their travel on board the MRT and/or LRT. For each journey made on weekday, the user can earn 10 points. The conversion rate for cash payout is every 1,000 TSR points to $1. In other words, a user is required to complete 100 trips on rail network before he can redeem $1 cash payout.

Currently, the contactless debit or credit cards are not eligible for TSR and only one travel card is allowed to be associated with one TSR account.

[Update: The TSR portal will cease operations after 30 June 2019. TSR points will be awarded for train trips taken up to 31 May 2019]

SimplyGo

Launched on 4 April 2019, SimplyGo allows commuters to use their MasterCard contactless bank cards or mobile wallet to pay for their travel on public transport. The main idea is to reduce the need for a separate Ez-Link card in your wallet.

Excited to try out this initiative, I have swept through the credit cards I owned, only to find just one MasterCard — Standard Chartered Unlimited Cashback Credit Card. LTA has announced that Visa is expected to be part of SimplyGo later this year.

Enabling Mastercard contactless bank cards for transit

For Mastercard contactless bank cards that come with EZ-Link/NETS FlashPay functionality (with CEPAS logo at the back of the card), the EZ-Link/NETS FlashPay function will be the default payment mode for transit. Commuters will have to use the General Ticketing Machines at any MRT stations to switch to Bank card mode.

If your contactless bank card does not have the aforementioned functionality, you can already use them to pay for bus and train rides.

How would I be billed for transit payments when using the MasterCard contactless card?

When SimplyGo was first launched, this is the only burning question that I have and whether cashback can be earned with SimplyGo.

To my understanding, most financial institutions exclude the topping up of funds to prepaid cards like Ez-Link from their lists of qualifying transactions. However, the concept of SimplyGo differs from the usage of Ez-Link card in the transit payment process. It bypasses Ez-Link as an intermediary and allows the MasterCard contactless cards to pay for transport fare directly.

Fortunately, LTA has clarified that the SimplyGo transactions will be charged with the merchant descriptor name "BUS/MRT". The fare charges will be accumulated for up to 5 days or when a total of $15 is spent on transit fares, whichever is earlier, before it reflects on the credit card statements.

To validate this, I have checked on Standard Chartered t&c to ensure that transactions with description "BUS/MRT" does not appear in the exclusion list. Furthermore, I have phoned the SC hotline and have received confirmation from the customer service officer that SimplyGo transactions do qualify for cashback. My latest credit card statement has also affirmed the accuracy of LTA's statement.

Experience with SimplyGo

Up till now, I have used my credit card and Apple Pay for the payment of my transport fare.

My experience with SimplyGo has largely been smooth. Compared to using Ez-Link card, I have noticed that there is a slight delay in reading the bank card at the MRT gantry/bus but it is not so significant that you have to fret over the formation of a snaking queue of impatient commuters glaring at you.

When using Apple Pay, I would whip out my mobile phone and ensure that I am at the Apple Wallet app before making my fare payment. This method has really eliminated the need to carry a separate Ez-link or credit card.

Registering a SimplyGo account and downloading the app is optional. Whenever I tap out of the gantry, my mobile device will receive an almost instantaneous notification of the transport cost. Compared to the Ez-Link app, SimplyGo provides a clearer breakdown of the fare.

Current Promotions

Of course, what better way to incentivise Singaporeans to switch to SimplyGo than dangling promotions as carrots.

Issuers	Promotional Benefits	Validity Period	Other Conditions
ICBC	Earn 20% cashback capped at $20	1 April – 20 June	N/A
OCBC	Earn 10% rebate capped at $10	4 April – 31 May	First 10,000 registrants
UOB	Earn 20% rebate capped at $15 with at least $40 spent in a calendar month	4 April – 31 May	First 10,000 registrants
Citibank	Earn 50% cash rebate capped at $10	11 April – 11 May	First 1,000 credit card registrants and first 500 debit card registrants
Standard Chartered	Get up to $10 worth of free rides awarded in the form of cashback	4 April – 31 May	First 5,000 registrants
Youtrip	Get $3 by topping up to Youtrip account and completing a transaction on bus/train	11 April – 14 May	First 2,000 users

Best Transport Credit Card

Beyond the promotional rebate that one can earn from various financial institutions, there are a few MasterCard credit cards which offers appealing cashback rate for daily commute by public transportation. It is highly recommended to read through the respective terms and conditions before applying for any credit cards.

BOC Qoo10 World MasterCard
This credit card offers a whopping 20% on public transportation category with a minimum qualifying spend of at least $600 in a calendar month. However, instead of cashback, it awards Qmoney, a virtual currency that can be used to make payment on Qoo10.

CIMB Platinum MasterCard
This credit card offers 10% cashback on the categories of travel, transport/petrol and health/beauty/wellness, and 0.2% cashback on other retail spend. To qualify for the 10% cashback, the cardmember must spend at least $600 in a statement month.

[Update: With effect from 5 June 2019, the cashback programme for CIMB Platinum MasterCard will be revised.]

Maybank Family & Friends Card
This credit card offers 5% and 8% cashback on bus and train rides with a minimum monthly spending of $500 and $1,000 respectively.

Personally, I am most likely sticking with Standard Chartered Unlimited Cashback Card since meeting the minimum spending can be an uphill task for me. But of course, everyone has different travelling and spending patterns and it should be a key factor to consider before deciding which travel programme to opt for.

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 stated financial institutions/SimplyGo/Ez-Link 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.

4 Comments

Savings

Increment of Salary Bonus for OCBC 360 Account from 1 April 2019

By The Boy Who Procrastinates - April 13, 2019

When the SMS notification from OCBC was shown on my mobile phone on 1 April, I would have thought that this is one of the wacky pranks among other creative April Fools' Day gimmicks. This is especially so when OCBC has recently revised the interest rate for 360 Account on 1 Nov 2018, merely 6 months ago.

It was subsequently confirmed that this favourable news is here to stay and is now a permanent feature of the OCBC 360 account until further notice. With that, this article aims to find out the additional amount of interest an account holder can expect to earn, as well as to compare across different methods to fully utilise the step-up bonus. You may wish to refer to the OCBC website for more information.

Revision of Interest Rate for OCBC 360 from 1 April

From 1 April, the Salary Bonus interest for balances between $35,000 and $70,000 has been increased from 1.5% to 2% per year.

Account holders can still earn 1.2% interest on the first $35,000 and the minimum salary crediting amount has remained unaltered at $2,000.

On the whole, the effective interest rate on $70,000 balance contributed by the category of Salary Bonus has raised from 1.35% to 1.6%.

Impact of the Revision on the Interest Rate

(Click to enlarge)

For ease of comparison, let's consider the scenario in which the salary, spend and step-up bonus of OCBC 360 Account are fulfilled.

Graphically, we can observe that the revision provides a significant interest rate increment beyond $35,000 balance. At the maximum account balance of $70,000, the account holder can earn an effective interest rate of 2.55%, translating to a gain of 0.25% or $175 per year.

(Click to enlarge)

Of course one might argue that the maintenance of step-up bonus can be demanding and some would prefer the flexibility of channelling the excess funds for better use.

If the salary credited was promptly transferred out of the savings account, the step-up bonus would be unaccomplished. In such situation, the revised effective rate can reach 2.1% instead of the current 1.85% at $70,000 balance, an absolute gain of 0.25%.

As this amendment only affects the second balance tier, it would only benefit account holders who have parked more than $35,000 in their accounts.

Ways to Optimise the Step-up Bonus

In the previous post regarding the revision of interest rate for OCBC 360 Account, I have examined a hack to perpetuate the step-up bonus chiefly by utilising the mechanism of daily average balance ("ADB"). However, I understand that such method may not be as sustainable as expected due to the increasing sum to deposit in the account.

To remove the complexities from the equation, we can narrow down to the few approaches illustrated in the table below.

For ease of comparison, we assume the profile of an account holder who is able to fulfill the salary and spend bonus. To simplify the calculation for step-up bonus, he can choose to deposit $500 at the start of the month and transfer out his salary credited within the same day. This will help to maintain an incremental ADB of $500 that is easier to keep track of.

(Click to enlarge)

In order to sustain the annual cycle, the account balance will be reset in Month 1. Thus, the step-up bonus for that month will be unqualified.

The interests are computed using the calculator available on the OCBC website.

Method 1

The account holder does not intend to have excess savings beyond $70,000 and therefore only maintain the maximum balance of $70,000 for which the bonus interest is accorded.

As calculated above, he will earn an effective interest rate of 2.10% and total interest of $1,498.

Method 2

The account holder starts with a balance of $64,500 and increases it by $500 per month. The effective interest rate that he is able to earn has jumped to 2.49% with the total interest calculated to be $1,708.57.

Method 3

Similar to Method 2, the account holder starts with a balance of $70,000 instead to maximise the interest earned. Subsequently, he increases the balance by $500 each month.

The effective interest rate that he is able to earn is 2.43% with the total interest at $1,798.33.

Method 4

Beyond $70,000, the account holder has intended to recycle $500 only, which he faithfully deposits and withdraws on alternate months. The interest earned at $1,661.22 is still higher than that from Method 1.

To sum up the comparison, it would appear that Method 3 reaps the highest interest but falls marginally behind Method 2 in terms of effective interest rate.

Regardless, it would seem sensible to not overlook the significance of step-up bonus. This equates to an additional $300 interest that an account holder can earn in a year if he were to employ Method 3 instead of Method 1.

Comparison with other Active Savings Accounts

Following from the previous post on the comparison among the active savings accounts, let's see where OCBC 360 account stands with the latest revision to its salary bonus.

As a disclaimer, I have cheated a little and included Citi MaxiGain Account as one of the contenders. This is because the MaxiGain account offers competitive interest rate which rivals that of the other active savings accounts despite being a passive savings account.

(Click to enlarge)

With the addition of a new candidate, the OCBC 360 Account has been shifted to 4th placing in terms of maximum balance for which the bonus interest is accorded. The Citi MaxiGain Account leads the pack at $150,000, followed by Standard Chartered Bonus$aver Account ($100,000) and UOB One Account ($75,000).

(Click to enlarge)

According to the ABS website, the 1-Month SIBOR is currently at 1.82283. Therefore, the Citi MaxiGain Account currently offers the best bang for the buck at 2.48% with a few caveats such as the building up of 12 counters (represented by the orange bar) and a balance of at least $70,000. Additionally, its effective interest rate is subjected to the fluctuation of SIBOR.

For the sake of comparison, the Method 3 depicted above is being used as a benchmark for the computation of effective interest rate for OCBC 360 Account. With the boost from the salary bonus increment, the OCBC 360 Account has sharpened its competitive edge and is now almost on par with UOB One Account.

If we were to judge solely on the prerequisite of salary crediting of at least $2,500, the OCBC 360 offers the 2nd highest interest rate at 1.6%, behind DBS Multiplier at 1.85% (considering the credit card spending of $1 to be negligible).

(Click to enlarge)

Merging the information from the first 2 charts, we can measure the maximum bonus interest that one can potentially earn from these savings accounts.

Needless to say, Citi MaxiGain Account and the Standard Chartered Bonus$aver Account have clinched the first 2 positions, attributed to their impressively high cap on the balance that earns the additional interest.

The UOB One Account still has a slight advantage over OCBC 360 Account due to its marginally higher balance cap of $75,000.

Although it is still far from its generous 3.05% interest rate back in 2014, I must say OCBC has made a decent move in closing on the gap among its peers.

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 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.

2 Comments

Insurance

Enhanced Deposit Insurance Scheme and Policy Owners Protection Scheme from 1 April

By The Boy Who Procrastinates - April 01, 2019

This quote came from Senator Bernie Sanders when he introduced a bill to break up America's largest financial institutions in 2018. The rationale is that if a financial institution is too big to fail, it is too risky to allow it to exist as its failure would cause catastrophic risk to the economy.

In order to ensure the stability of the banking system in Singapore, the Singapore Deposit Insurance Corporation (SDIC) was incorporated in 2006 to administer the Deposit Insurance Scheme and Policy Owners' Protection Scheme, as well as to manage the underlying funds.

Starting from today (1 April), depositors and insurance policy owners will be able to enjoy enhanced protection in the event that their financial institution fails. This article will provide an overview of the 2 Schemes as well as address the recent revision made.

Deposit Insurance Scheme (DI Scheme)

First launched in April 2006, the DI scheme is designed to safeguard the core savings of small depositors, net of liabilities, in the event that their bank or finance company fails.

Unless exempted by MAS, all banks and finance companies in Singapore are members of the DI scheme. These members pay annual premium contributions to a Deposit Insurance Fund (DI Fund).

In the unfortunate event that a financial institution fails, the scheme compensates the affected depositors through the DI Fund.

DI Scheme Coverage Limit

When the DI Scheme was first launched in 2006, depositors of a failed financial institution were insured up to $20,000 of their Singapore dollar deposits only.

This limit was subsequently raised to $50,000 in May 2011. However, the percentage of fully-covered insured depositors has eventually reduced to 87% over time due to rising incomes and greater savings.

In order to restore this ratio to above 90%, the DI coverage limit has increased by 50%, to $75,000 from 1 April.

(Click to enlarge)

Scope of DI Scheme Coverage

In 2011, the protection offered by DI Scheme has broadened to cover not just individual depositors but all non-bank depositors such as sole proprietorships, partnerships, companies, as well as unincorporated entities like associations and societies. The scope of the DI coverage includes Singapore dollar deposits/monies held in the following:

Savings, fixed deposit and current accounts
CPF Investment Scheme (CPFIS) accounts
CPF Retirement Sum Scheme (CPFRS) accounts
Supplementary Retirement Scheme (SRS) accounts
Wadiah accounts (with Islamic financial institutions)
Murabaha accounts (with Islamic financial institutions)

Financial products that are excluded and not insured by SDIC are as follows:

Foreign currency deposits
Structured deposits
Investment products such as unit trusts, shares and other securities

The bank deposits in Singapore are insured up to a maximum of $75,000 for every depositor per financial institution. This is regardless of the number of savings accounts that one has with the bank. However, there are a few scenarios in which the total sum insured may differ.

Scenario 1: Savings, Current and SRS Accounts

Deposits held in a savings account, fixed deposit account, current account, Wadiah account, Murabaha account and SRS account are aggregated and insured for up to $75,000.

In the example above, Person A has a total account balance of $115,000 across all 3 accounts in Bank X, but the total sum insured is only $75,000.

Scenario 2: Savings and CPFIS Accounts

Deposits placed under CPF Investment Scheme and CPF Retirement Sum Scheme are aggregated and separately insured for up to $75,000.

That is to say that Person A will be able to enjoy a total insurance sum of $150,000 across his savings account and CPFIS account in Bank X.

Scenario 3: Joint Account

For deposit in joint account, each joint account holder is assumed to have an equal share in the account, unless stated otherwise. Each joint account holder's share of the joint account is combined with other insured deposits held in his own name.

Assuming that Person A has $50,000 in his savings account and $100,000 in a joint account with his spouse in Bank X. His share of the joint account is calculated to be $50,000 ($100,000 / 2). This amount is combined with $50,000 in his savings account to form the total balance of $100,000 but only $75,000 is insured.

Scenario 4: Sole Proprietorship Account

For sole proprietor, the deposits in his personal savings account will be combined with the firm's account to form the maximum sum insured of $75,000.

Scenario 5: Trust Accounts

Trust accounts are insured on a per account basis without aggregation. Suppose that Person A has set up a savings account for his son with $100,000 with Bank X and the same for his daughter. Personally, he has a savings account of $100,000 with Bank X. In the event that Bank X has failed, the total sum insured will be $225,000.

Policy Owners' Protection Scheme (PPF Scheme)

Similar to the DI Scheme, the PPF Scheme protects policy owners in the event that a life or general insurer fails.

All insurers registered by MAS to carry on direct life business or direct general business are members of the PPF Scheme.

They are required to pay annual levies to the PPF Life Fund and PPF General Fund which will be used for compensation to policy owners in the unfortunate event of a failure of a PPF Scheme member.

Scope of PPF Scheme Life Coverage

The PPF Scheme protect policy owners for all life insurance policies and provides 100% protection for the guaranteed benefits of these policies, subject to the applicable caps. Some of the main types of policies covered are as follows:

Individual Life and Voluntary Group Life policies: Cap of $500,000 for the aggregated guaranteed sum assured and $100,000 for aggregated guaranteed surrender value per life assured per insurer
Individual and Voluntary Group Annuities: Cap of $100,000 for the aggregated commuted value of guaranteed benefits per life assured per insurer

It is imperative to note that life insurance policies issued by overseas branches of a registered life insurer incorporated in Singapore are not covered by PPF Scheme.

Scope of PPF Scheme General Coverage

The PPF Scheme protects all compulsory insurance policies under the Motor Vehicles Act and Work Injury Compensation Act. The additional types of specific lines covered are as follows:

Personal motor insurance policies

Personal travel insurance policies

Personal property insurance policies

Foreign domestic maid insurance policies

Individual and group short-term accident and health insurance policies

From 1 April, motor and property insurance policies will be covered even if the car or property is used for commercial purposes. This revision comes at the expansion of the gig economy when more people are using their own cars or homes to generate income.

Additionally, there will be caps for own property damage motor claims of $50,000 under personal motor insurance policies and property damage claims of $300,000 under personal property insurance, on a per policy basis.

Closing Thought

Even though a decade has passed, the collapse of Lehman Brothers and AIG bailout in 2008 may still linger in some of our minds. It has served as a stark reminder that the failure of a financial institution is not completely inconceivable.

While such event might be improbable, the enhancement made to the deposit insurance scheme is definitely a desirable revision that helps to boost the confidence of depositors in Singapore.

Nevertheless, this recent improvement is likely to have limited effect on the decision to concentrate my deposit in high-yielding savings accounts that allow maximum balance amount which the bonus interest rate applies, to be greater than $75,000. E.g. Standard Chartered Bonus$aver Account ($100,000) and Citi MaxiGain Account ($150,000).

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 stated 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.

2 Comments

Saving More on your Daily Commute by Public Transportation

EZ-Reload

Complementary apps that help save money on the go

SimplyGo

Enabling Mastercard contactless bank cards for transit

How would I be billed for transit payments when using the MasterCard contactless card?

Experience with SimplyGo

Current Promotions

Best Transport Credit Card

Increment of Salary Bonus for OCBC 360 Account from 1 April 2019

Revision of Interest Rate for OCBC 360 from 1 April

Impact of the Revision on the Interest Rate

Ways to Optimise the Step-up Bonus

Comparison with other Active Savings Accounts

Enhanced Deposit Insurance Scheme and Policy Owners Protection Scheme from 1 April

Deposit Insurance Scheme (DI Scheme)

DI Scheme Coverage Limit

Scope of DI Scheme Coverage

Scenario 2: Savings and CPFIS Accounts

Scenario 3: Joint Account

Scenario 4: Sole Proprietorship Account

Scenario 5: Trust Accounts

Policy Owners' Protection Scheme (PPF Scheme)

Scope of PPF Scheme Life Coverage

Scope of PPF Scheme General Coverage

Closing Thought

Follow Me

Search This Blog

Fellow Readers

Blog Archive

Categories

Featured post

Amassing $100,000 Before The Age Of 30

Blogroll

Resources