Standard Chartered Bank ups maximum interest rate on savings account to record 8.05%

CNA

2 days ago

SINGAPORE: Standard Chartered Bank has raised the maximum interest rate on its flagship Bonus$aver savings account to 8.05 per cent a year – the highest ever offered by the bank.
The increase from 6.05 per cent kicked in from Sunday (Jun 1), bucking the downward trend in savings account interest rates here.
These rates typically track the monetary policy decisions of global central banks, namely the United States Federal Reserve. Since the Fed began cutting rates last year amid uncertain economic conditions, banks have duly brought down the interest rates paid to savers.
Two local banks – UOB and OCBC – lowered the interest rates on their flagship savings accounts last month, citing the need to be aligned with long-term interest rate expectations. For UOB, it was the second reduction in a year.
Standard Chartered itself had made two downward revisions over the past year amid the weaker rate environment globally – first in May 2024 when it lowered the Bonus$aver's maximum interest rate to 7.68 per cent before a second cut to 6.05 per cent in January.
Asked why it is hiking interest rates this time and whether the record-high offering is sustainable, Standard Chartered would only say that its 'headline rate matches the overall relationship value' it has with its clients, covering both daily banking and wealth solutions.
'While we continuously monitor macro trends, this holistic approach allows us to sustainably offer such a proposition rewarding clients who choose us as their primary banking partner,' Mr Usman Khalid, the bank's global and Singapore head for deposits, mortgages and payments, told CNA in an emailed response on Tuesday.
Like the flagship savings accounts offered by other banks, Standard Chartered's account holders need to fulfil several criteria to earn the bonus interest rates.
These include crediting a salary of at least S$3,000 (US$2,330), spending at least S$1,000 monthly on eligible credit and debit cards, as well as insuring and investing with the bank.
The qualifying criteria for its various categories are largely unchanged, except that equity investments of at least S$20,000 done through its online trading service will now qualify under the investment category.
The decision to include equity trades follows a 'noticeable increase' in trading interest, with new client acquisition jumping 50 per cent in 2024 compared to the year before, Standard Chartered said.
With the revision, account holders now earn a bonus interest rate of 1.5 per cent a year when they spend at least S$1,000 monthly with eligible credit and debit cards, up from 1 per cent.
The bonus interest rate for the crediting of salaries has gone up to 1.5 per cent a year, from 1 per cent previously.
Account holders also earn bonus interest of 2.5 per cent a year when they invest or insure with the bank, compared with 2 per cent before.
These bonus interest rates are offered on the first S$100,000 of savings.
While direct comparisons are difficult given the different qualifying conditions imposed by the banks, Standard Chartered now offers the highest headline interest rate among flagship savings account offerings in Singapore.
UOB One account holders will earn up to 5.3 per cent on their first S$150,000 if they credit their salary and spend a minimum of S$500 on eligible cards.
OCBC's flagship 360 account offers a maximum effective interest rate of 6.3 per cent a year on the first S$100,000 of savings when customers credit their salary, save, spend, as well as take up investment and insurance products with the bank.
DBS' flagship Multiplier account, whose rates have been unchanged since November 2022, offers a maximum interest rate of up to 4.1 per cent a year for the first S$100,000 in deposits.
Likewise, customers have to tick the boxes in terms of crediting their salary to the bank and transact in three categories with a total volume of S$30,000 or more a month.
A SURPRISE MOVE THAT MAY NOT BE SUSTAINABLE: EXPERT
Given the broader trend of banks trimming rates, Standard Chartered's latest announcement came as a surprise, said Mr Tan Chin Yu, lead of advisory at wealth advisory firm Providend.
While expectations for central banks to cut rates have slowed due to economic uncertainties, the move is unlikely due to a change in the bank's assessment of where global interest rates are headed but 'more of a strategic move to attract deposits' and grow market share, he added.
Such an offering 'may not be sustainable over the long term' if global interest rates continue to ease, Mr Tan said.
'However, this remains to be seen, depending on how the global economy pans out which would have an impact on how the Fed reacts.'
Following three rate cuts last year, the US Fed has kept monetary policy steady so far in 2025 and is expected to hold interest rates steady at its upcoming decision on Jun 18, largely due to mixed economic signals and US President Donald Trump's changing tariff policy.
Minutes from the Fed's meeting in May showed that officials prefer to wait for more clarity on fiscal and trade policy before considering lowering rates again, although recent comments by Fed officials suggest that rate cuts remain on the table.
Fed governor Christopher Waller, for instance, said on Monday that interest rate cuts are still possible later this year as a rise in inflation pressures due to the tariffs is unlikely to be persistent.
The uncertainty means that customers thinking of switching savings accounts should look beyond the headline interest rates and carefully consider the various eligibility criteria, Mr Tan said.
'Do consider whether the criteria suit your personal lifestyle and habits,' he told CNA. 'You don't want to intentionally have to spend more or buy certain financial products that you don't need just to justify meeting the various thresholds.'
Customers should also be prepared that such promotional rates may change quickly and with that, the hassle of having to change banking accounts again, Mr Tan said.