My dad, a retiree who is 69 years old was lamenting about the petite interest rate that he is currently receiving from 100K that is sitting in his savings account. I tried to recommend CIMB fixed deposit to him as CIMB currently offers the highest interest rate of 1.75% p.a.
I have also told him that I have done a fixed deposit placement recently via internet banking. Being not so technology savvy, he is very resistant to open an account via the internet. He is the kind who still prefers to make a trip down to the bank and queue. He became even more reluctant when he heard CIMB only has two branches, one at Raffles Place and the other at Orchard. He prefers banks where there are branches near your neighbourhood like POSB, OCBC and UOB. These are bank names known to old folks like him.
He asked me if it is better to put his 100K in OCBC fixed deposit which now offers 1.55% p.a. for a 12 months placement or open a UOB Stash Account as he heard UOB Stash offers an interest rate of 1% p.a. and there is no lock in period.
UOB Stash Account
Below is how UOB Stash Account interest is computed. You can check out their website.
| Account Balance | Base Interest (p.a.) | Bonus Interest (p.a.) | Total Interest (p.a.) |
| First S$10,000 | 0.05% | 0.00% | 0.05% |
| Next S$40,000 | 0.05% | 0.75% | 0.80% |
| Next S$50,000 | 0.05% | 0.95% | 1.00% |
| Above S$100,000 | 0.05% | 0.00% | 0.05% |
Using the calculator available on UOB Stash Account website, I entered 100K every month.
The total interest that my dad will earn if he put 100K into the UOB Stash Account from February 2020 to January 2021 is S$825.12.
OCBC Fixed Deposit at 1.55% (12 Months)
The interest that you will earn if you place 100K in OCBC fixed deposit at 1.55% p.a. for 12 months is S$1,550.00.
The conclusion is that my dad should park his S$100K with OCBC fixed deposit for 12 months at an interest rate of 1.55% p.a. as he will receive S$1,550 when his fixed deposit matures instead of UOB Stash Account.