Wednesday, January 01, 2020

DBS multiplier account NERFED

It's the first day of the 3rd decade of the 3rd millennium and I received some news that DBS is going to nerf their multiplier account. I first heard it from Kyith (here) and the new changes, which will take effect from 1st Feb 2020 is listed here.

The major changes are that instead of dividends being under the "Investment" category, it is now grouped under a new "Income" category, which combines both the salary credit component together with all dividends received. This sucks because now, most people will have one less category to fight for the highest interest of 3.8%. I really don't want to get into some long term commitment, like buying a regular savings plan or DCA into sti etf, for something that is short term and fickle like the terms and conditions for the DBS multiplier account. I guess I'll have to contend with less interest.

The other major change is that the higher interest for the salary credit + transactions in 1 category is now applied up to a new cap of 25k only, down from the current 50k. It's not clear what they meant by this.

I take the liberty to include two scenario. But first, this is what is like currently (click if it's too small to zoom in):


This is what I think it'll be like after the changes to the cap from 50k to 25k:

Scenario 1

This is what I think it could be if they are kinder:

Scenario 2
Scenario 1 will introduce 2 tiers, first tier of 25k, next tier of 25k, then final tier of 50k. For this scenario, if you hit 3 categories including the new income category, and you also hit the max transactions per month of 30k and above, you'll get a blended interest of 2.79% pa ([2.08*25 + 3.50*25]/50 = 2.79) for the first 50k.

Initially it's 3.50% for first 50k, so that's a drop of $145/mth to $116/mth after 1st Feb. Say bye bye to the next 50k unless you buy their insurance and investment, which I am very repulsed to do so.

I don't think they are going to be kind so screw scenario 2. Ironically, in my mind, I just wanted to do scenario 2, until I actually do out the jpg to realise that it's too nice to have scenario 1 where there is a first 25k tier, next 25k tier, and final 50k and above tier.

Maybe just bloody buy their stocks and get a dividend of more than 5% pa lol

4 comments :

la papillion said...

Some updates.

Surprise surprise, I got confirmation that it is afterall the 2nd scenario that I listed out. Which means if you hit the requirements, your first 50k will be at most 3.5% pa rather than the blended rate of 2.79% pa from the 1st scenario. They are kinder than I thought.

Quite hard to reach 3.8% for the max and highest tier, but at least 3.5% for first 50k is not bad.

Unknown said...

What are the 3 categories? Can you please elaborate?

la papillion said...

Hi unknown,

Sorry for the extremely late reply. You can really look up their websites to look at the different categories you know. But i'll feed it to you:

a) salary + dividends, known from 1st Feb 2020 as Income category
b) Credit card spending
c) home loan installments
d) insurance
e) investments

Alan Curtis said...
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