Unfortunately, many good things eventually come to an end. DBS announced today that there will be policy changes to their Multiplier account which will take effect from 1 Feb 2020.
In essence, the changes are as follows:
- Creation of new Income category, made up of either Salary credit via GIRO or Dividend Income from CDP via GIRO
- Dividend credits will no longer be considered under Investment category, but new Income category instead
- Balance cap for salary credit + 1 qualifying transaction category will be capped at $25K, down from $50K
What it means
For those who have been using CDP dividends or interest from SSB bond ladders to fulfill the Investment category of DBS Multiplier, then bad news for you – you will need to find an alternative to meet the Investment criteria.
This is definitely a move from DBS to encourage people to sign up for their Invest Saver and Regular Savings plans instead of exploiting a loophole that has been around that allowed customers to avoid using DBS services but still qualify for the Investment category.
If you have been building a SSB bond ladder over the past six months like me, then your efforts would have been wasted from this sudden but predictable move from DBS.
Qualifying investment criteria
There are now 3 ways to clock the investment criteria –
- Unit Trust purchases from DBS or POSB
- Regular Savings Plans via Invest Saver
- Buy equity trades from DBS Vickers
For retirees or freelancers who do not have an salary credit before, they can use CDP dividends to qualify for the income category and gain access to DBS Multiplier’s benefits.
All in all, for most of us in general, the policy changes would result in a slightly lower interest tier compared to before. But before you complain, lower interest rates around the world mean banks have greater difficulty earning profits from interest margins.