New BOC Family Card 7% Dinning Rebate

Looks like its time to take out the BOC Family Card from our cupboards. Effective from 17th April 2016 onward, the amount of cash rebates you earn from this card will be revised for the better. For the full terms and condition you can click here.

You can either opt to change to the new card(picture above) or use your old existing BOC Family Card. The terms will be the same just that the new card will have an inbuild ATU Nets Flashpay function. The new card is not free though, you will need to pay $20 for it.

You will get the usual 0.5% cash rebate if you spend less than $500 for each billing cycle(for all retail purchase). The good part is that you will get 7% cash rebate(not including the 0.5% base thanks to a notification from one of my readers) on dinning for all Singapore and overseas transactions made at all restaurants, cafes and fast food restaurants excluding all food and beverage spend within hotels and wedding banquet held in hotels. The rebate per billing cycle is capped $100. You can spend between $500- $1333 on dinning to get the 7% rebate.

Besides that, you will also get 5% rebate for all supermarket and hospital bill spending. Do note though that for hospital bill, you will need to pay over the counter and not online. I don't really need another supermarket rebate card as I am currently getting a much better rebate percentage(will do another post on this).

Another good addition is the 5% cash rebate on Nets FlashPay ATU. The rebate is awarded for up to four top ups per card account per billing cycle. Do note however there is a total ATU fee of 50 cts for each ATU transaction. A $50 top up will incur a 1% fee which means effectively, you will be getting a 4% net rebate from ATU.

There is also a 1% Telecommunication rebate which is not as good as just paying online and getting the 7% straight from SCB Singpost card.

All in all, I think this new revised BOC Family Card has just killed OCBC 365, CIMB Signature and other existing dining rebate card, mainly because of the 7% rebate and their non stringent terms and condition. Do note you can spend $100 on dinning, $100 on hospital bill, $300 on supermarket and get 7% for your dinning and 5% for both your hospital and supermarket bills.

I will be using this card for dinning from 17th of April onward.

Maybank SaveUp Account vs BOC SmartSaver

There is a new player in town who is trying to compete with BOC SmartSaver, called Maybank SaveUp Account. It lets you enjoy up to 3% p.a(cap at $50k) if you are able to complete 3 sets of action out of a choice of 9. You can click here to view their website.

The interest setup looks pretty similar to BOC Smartsaver. It has a separate base interest rate tier and a special interest rate tier. From the diagram above, your first S$3k deposit gives you a base rate of 0.1875% p.a, the next S$47k gives you 0.25% p.a and anything above S$50k gives you 0.3125% p.a. If you manage to fulfill all three requirements and have $50k deposit in this account you will get (2.75% + 0.1875% for the $3k) and (2.75% + 0.25% for the $47k). Which adds up to be close to 3% for your $50k deposit.

In comparison with BOC Smartsaver, the base interest rate tiers for Maybank SaveUp is definitely lower and more 'sliced up'. The Smartsaver gives you 0.4% base rate for the whole S$50k portion once you hit the $50k mark. So in my view BOC Smartsaver wins hands down in regards to base rate interest. Now lets compare their 'bonus' interest.

Maybank SaveUp Qualifying Products

From the first look, you can see that Maybank SaveUp has 9 qualifying products which gives you much more 'choices' compared to BOC Smartsaver(which is only limited to 3). If you have many different loans with Maybank or bought life insurance/unit trust with them, you can theoretically use this together with BOC Smartsaver since they are mostly non overlapping except for the salary crediting part. For me personally, I don't have any loans with them and have never bought any life insurance or unit trust before.

I would guess that a majority of us would only be looking at the credit card spending, salary crediting and giro services requirements. If we base the comparison solely on these three requirements, BOC Smartsaver will be easier to fulfill. Since their pay bill function is basically just paying $5 to any bills including any credit cards.

Credit card wise, the BOC's shop card is better than Maybank Platinum Visa Card in my view. I find the Maybank card to be quite similar to the UOB One card(which i stopped using). Its basically a quarterly 3.33% rebate if you spend a min of $300 monthly for three consecutive month. As for the BOC 5.5% rebate Shop card for online spending, there are many ways to use it(will explain more indepth in the future).

So to conclude, the Maybank SaveUp account is a good attempt by Maybank to break into the 'high' interest with requirements savings account market which is getting more and more crowded now(OCBC360, UOB One, BOC Smartsaver, etc). If you have a deep relationship with Maybank in regards to loans, financing, insurance and uni trust, this savings account would be a good addition for you to park your cash.

Do note that if you are able to complete the requirements for both accounts, the effective interest rate for BOC Smartsaver is higher(3.55% vs close to 3%). The deposit cap for BOC Smartsaver is also higher($60k vs $50k). In my view, BOC Smartsaver > Maybank SaveUp > UOB One > OCBC360. So if you are currently parking your cash in UOB One or OCBC 360, this Maybank SaveUp account will be a better upgrade(unless you have certain insurance or investment with OCBC that enables you to get the additional 1% for OCBC360).

I personally will most likely continue to stick to my BOC Smartsaver and give this one a miss.

Posb $50 Cash Gift Promotion

The promotion period is from 8th March 2016 to 31st March 2016

If you have $4,800 of spare cash and you are considering to put into a safe fix deposit, you can consider this. In my view this currently gives you the best rate for a "6 month tenor fix deposit" in the market.

All you need to do is to click here and open a new deposit and eMSA account(via ibanking will be the easiest)

1) Before 25th April 2016 deposit at least $3,000 into the new deposit account for at least 6 consecutive months.

2) Maintain a monthly contribution amount of at least S$300 for a 6 month period, have the first contribution before 25th April and not withdraw from the eMSA account during the 6 month period. Which means the total amount you need for this account is 300 x 6 = $1800.

Fulfilling either 1) or 2) gives you only $20, which will be credited to your new deposit or eMSA account before 13th May 2016.

Fulfilling both 1) and 2) will give you $50 which is more worth it percentage wise.

Which means you  get a $50 cash gift for depositing a total of $4,800 within 6 months. That is an effective yield of 2.0833% p.a for your $4800. Not bad at all for a risk free investment. Do note that the eMSA and deposit account should also accrued interest within the 6 months of holding in addition to the $50 gift that you will be getting

If you think that you don't need too many accounts, you should be able to cancel both accounts once you receive the cash offer.

New Citi MaxiGain Savings Account

This new savings account from Citibank is quite interesting. The base interest rate that you get, is tagged to 80% of 1 month SIBOR. Which means, it acts as a good hedge against a potential rising interest rate environment.

For example if 1 month SIBOR were to surge to 2%, you will get a 1.6% base interest rate p.a. Do note that this account is in similar grouping as CIMB starsaver, where you don't need to fulfill any salary crediting or credit card spending. In my view it is more attractive than the starsaver.

The second portion of the interest rate is an initial step up mechanism. The first month of account opening you will have zero counter. Then every month onward you will get 1 counter each month. Each counter gives you 0.1%, cap at 1.2%. Which means once you accumulate 12 counters, your interest will be 1.2% thereafter in perpetuity(Which means total interest will be 1.2% + 80% of 1 month SIBOR= 2%++).

The only catch is that you have to make sure that your saving amount is increasing every month even if its an increment of $1. Many assumes that the interest that you get every month will be counted as an increment, but I called Citi bank to check and they say yes. You can leave a min sum of $15k there without injecting anymore fund and just let it grow over time.

Do note you have to be 18 years old and above to open and you need to deposit and initial amount of $15,000(prevent fall below fee). From now till 31st Dec 2016 you will receive a $200 reward if you credit new funds of $50k within 1 month of account opening for a 6 months duration. For those who are currently using CIMB Fastsaver/Starsaver, this will be a better alternative for you in my view.

The base rate tagging to SIBOR is really useful. As historically, we have seen 1 month SIBOR rate between near 0% to 7+%. So there is a potential to get really high base interest if 1 month SIBOR rate were to suddenly rise. For the full info you can click here. Do note you can only open this account by going down to a Citi bank branch.

BOC 3.55% Smart Saver Update And Tips

Please read the disclaimer at the bottom of my blog if you wish to continue with the contents below.

I think I was one of the few who opened the BOC 3.55% Smart Saver Account on the month of its released and so far it has been very rewarding. Besides the $177.50 interest I get monthly, they have also rewarded me with a $100 limited edition cash card:

BOC $100 cash card

From what I know, only a small percentage of users can get this card as it was given to those that credited their salary to the BOC account on the first month of its release. I ended up selling it for $120 on carousell(apparently there are people there who are willing to pay a premium for it).
In addition to that, I realize that I don't need to spend on my BOC Shop credit card(it gives only 5.5% rebate) to get the 1.55% interest. I can instead use the free Great Wall International Debit Card to pay off my other credit cards and as long I pay more than $500 a month, I will be entitled to the 1.55%. This debit card gives a 0.1% rebate for any spending, which means I get an additional 0.1% rebate for paying off my other credit card loans. I use better credit cards like SCB Singpost 7%, DBS live fresh 6%(defunct this month onward) and Amex Imagine now for my daily spending.

I have been sticking to the same philosophy for spending since the beginning. Always maximize your spending rebates using the best credit cards and always pay up on payment date, never ever owe the credit card company. In regards to my new credit cards rebate routine I will talk more about it in my future post.

BOC's ibanking platform needs a bit of time to get use to, but once you get the hang of it, it will be pretty straightforward. After many months of using it I think this account is a great place to store my cash. It gives me $177.50 monthly which means I do not need to rush into an investment position. What I usually do now is, if my cash position exceeds $60k, I will invest the excess into FCL 3.65% or CMT 3.08% retail bonds. But if the market hits the fan like these past few months, I would tend to enter a bigger percentage into STI ETF. To each his/her own.

STI ETF And A Well Diversified Portfolio

Please read the disclaimer at the bottom of my blog if you wish to continue with the contents below.

I am starting to really like STI ETF(ES3) recently after accumulating it solely during the downturn(although not enough!). This is just my own personal opinion as I am sure many people out there still prefer to pick individual blue chips in hopes to beat the market and get better yield. 

STI ETF has a low expense ratio, and it drastically reduces unsystematic risk(One would get expose to that if they have concentration of a few individual stocks). I always believe in having a diversified portfolio both breadth(different uncorrelated asset classes) and depth(different kinds in the same asset class). Of course one cannot assume a complete -1 correlation between any two asset classes, but a bond asset class and an equity asset class would make a good cookie cutter to start with.

A well diversified portfolio is important as if a specific asset class goes awry, it may be offset by profits earned from other asset classes. Investing in only a single asset class could be very detrimental. A good example will be 2015. Those who invested purely in equities got hit pretty badly, compared to those who invested purely in investment graded bonds.

Another advantage of STI ETF is its self correcting mechanism.The 30 basket of stocks you hold in the ETF today might be completely different 10 years later. Recently Noble was removed from the index and replaced with CapitaCom Trust instead. This is a self weeding out function that is very beneficial for STI ETF investors. It weeds out the 'troubled' stocks and replace them with 'better' ones.

Not to mention, it gives almost close to 4% yield p.a at $2.60, One has to know that the yield might not be fixed as its highly dependent on the basket of stocks it has. STI ETF is also cash based and non synthetic which I personally prefer. This means it is likely to have most if not all of its investable assets in the actual shares of the STI's constituents. I like the fact that it does not use derivatives and that the $2.++ per share is divided into actual 30 stock components. This makes my purchase in a per share perspective very efficient in my view.

STI ETF Daily Chart

The market did rebound very quickly these few days and basing on technical indicators, it does look like its going to continue to be bullish for the short term. I am most likely going to stop accumulating this ETF and continue to go back to my boring bond hunting again. Why aren't I doing dollar cost averaging for STI ETF you might wonder? I will tell you why in my future post. Till next time!