UOB’s move comes on the heels of a similar announcement by Oversea-Chinese Banking Corp (OCBC) this week.
OCBC on Tuesday said it would be raising the interest rates on its flagship 360 savings account from Thursday, allowing customers to earn interest of up to 4.05 per cent per annum on the first S$100,000 of their account balances.
Previously, account holders could earn a maximum of 2.38 per cent a year of interest on balances of up to S$75,000.
The bank also said it would reinstate a bonus interest category, which would allow customers to earn an additional 0.35 per cent a year of bonus interest for spending at least S$500 on their OCBC 365 credit card.
It had halted this bonus interest in 2020, given the prolonged low interest rate environment then and an uncertain environment due to the COVID-19 pandemic.
“In a rising interest rate environment, we want to reward our OCBC 360 account customers for their savings and banking behaviours, and for doing more with us, to enable them to grow their wealth and savings,” said Ms Tan Siew Lee, the bank’s head of wealth management in Singapore.
She added that the reinstatement of the bonus category also marked “a tighter integration” between the OCBC 360 Account and the OCBC 365 credit card. These are the bank’s flagship products, with one in four 360 account holders having a 365 credit card, according to Ms Tan.
DBS Bank, Singapore’s largest lender, has increased rates for its signature Multiplier account earlier this month, up to as much as 3.5 per cent on savings of up to S$100,000.
Like those offered by other local banks, the Multiplier account offers tiered interest rates based on customers’ account balances. Interest rates go up when customers conduct more transactions with the bank in eligible categories, such as crediting one’s salary to DBS, spending with the bank’s credit or debit cards, and investments.