Wednesday, 1 March 2017

Revised OCBC 360

So today marks the first day of March. The moment I woke up and looked at my phone, I saw a message indicating that OCBC is updating its interest rates from 1st Apr 17. So I went to the web immediately to take a look at it and found that it is reducing/increasing interest rates for 4 /5 components.

Links to the Current OCBC 360 account and the Updated OCBC 360 can be found here.

Below is the summarised version of the reduction.
  1. Payment section from 0.5% to 03% with a total of >$150 from >/= 3 bills
  2. Spend section from 0.5% to 0.3%
  3. Save section from 1% on incremental balance to 1% if your balance is  >$200K (this is not technically a reduction but to me, it is a reduction compared to its previous deal)
Below is the summarised version of the increase. 
  1. Wealth section from 1% to 0.6% or 1.2% depending on qualifying amount
  2. Increased balance cap from $60k to $70k

Overall, there is an expected interest rate decrease from 3.25% to 3.05%.

My thoughts:

So when I first saw the interest rate decrease, my idea was that the reduction was not so bad (drop from 3.25% to 3.05% only mah). When I read more into it, I realised what a bad deal this was going to be. The target of such account has evolved to accommodate people who have
  1. More than $200k and
  2. Invest or insures of eligible products within the wealth section of the account.

Honestly, if I had $200k, I would rather invest in the market than hold in cash at a bank earning such paltry interest rates. The eligible products are also products which does not have a good track record or which commands a huge annual premium. 

The majority of us would only benefit from the first 3 sections and an extra bonus section on the incremental balance in the current deal which awards us 0.05%+1.2%+0.5%+0.5%+1% (on incremental balance) netting us a 2.25% +1% incremental balance. With the revised update, we would only get 0.05%+1.2%+0.3%+0.3%, netting us a 1.85% interest rate...

So the summary is that I would be looking at other banks to put my emergency cash with easier criteria.

Investing Wolf 

Disclaimer: This is not a recommendation to buy or sell any mentioned stocks or securities in this blog. 

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