SINGAPORE: United Overseas Bank ( UOB ) will be cutting the interest rates for its flagship savings account from May 1 to “align with long-term interest rate environment expectations”.
The move comes hot on the heels of a similar shift announced by OCBC next year.
Flagship saving accounts offered by banks usually provide tiered interest rates that go up as customers grow their account balance, invest a minimum on limited cards and do other transactions with the lender such as taking up a cover product.
In later 2022, the bankers made violent excursions to the interest rates offered to savings in the midst of a rising rate environment.
However, that changed as objectives built up for central banks to begin cutting costs, with UOB making the first move to cut interest rates last May.
With the latest move, the tiered interest rates for UOB One account holders with balances of up to S$ 150, 000, credit their salary to the bank and meet a minimum spend of S$ 500 a month on an eligible bank card will range from 2.3 per cent to 5.3 per cent.
This translates to a maximum effective interest rate of 3.3 per cent, based on a notice posted on its website on Tuesday ( Apr 1 ).
These rates are down from the current range of 3 per cent to 6 per cent, and a maximum effective interest rate of 4 per cent for the same qualifying conditions.
A downward revision in interest rates is also in store for OCBC’s 360 account holders from May 1.
In an email to customers on Mar 24, OCBC noted that “interest rates have been lower this past year” so it is making the changes to be “in line with prevailing market conditions”.
The change means that customers will earn a maximum effective interest rate of 6.3 per cent a year on the first S$ 100, 000 in their account when they credit their salary, save, spend, as well as take up investment and insurance products with the bank.
This is down from the current 7.65 per cent.