From 3.7% to 3.3%: Is the OCBC Premier Dividend+ Account Still Worth It?

I’ve been using the OCBC Premier Dividend+ Account to boost my spare cash for a while now. It used to offer a fantastic 3.7% interest rate, which rivalled Singapore Treasury bills (T-bills) without the hassle of rolling and locking in for a 6-month period.

During a recent review of my finances, I noticed the interest rate from my OCBC Premier Dividend+ Account seemed to have dropped. I used to receive two bonus interests every month:

“Bonus interest mthly no w/d” and
“Bonus interest mthly now/d&save”

But this month I only received one bonus interest.

Digging deeper, I discovered they have made some changes to the terms and conditions.

OCBC Premier Dividend+ Account Interest Rate Changes

While I knew about the interest rate cut for OCBC Premier Dividend+ Account effective April 1st, 2024, I hadn’t realized there were now additional requirements to reach the top tier.

Here’s the breakdown:

Previously, the Premier Dividend Account offered tiered interest rates, with the highest reaching 3.70% per year for balances with no withdrawals in a month. This top tier has been revised to a new high of 3.30% per year.
The minimum monthly deposit required to qualify for the highest tier (now with 3.30% interest) has also increased from S$2,000 to S$3,000.

Below is a diagram to illustrate the interest rate tier breakdown.

Singapore’s Risk-Free Rate is Coming Down

This reduction in interest rates coincides with a similar interest rate cut move by UOB for their One Account. It reflects a broader trend of lower interest rates across Singapore. The latest T-Bill auction result (BS24110T on 23 May) is only 3.65%.

Singapore’s interest rates seem to be decoupling from those in the US. Even with the US aiming to maintain high rates for an extended period, Singapore’s risk-free rate continues to fall.

Is the OCBC Premier Dividend+ Account Still Worth It?

Honestly, achieving the 3.3% rate feels a lot more demanding now.

Here’s the thing: to qualify for the Premier Dividend+ Account’s top tier, you need to be an OCBC Premier Banking customer. This means having at least S$200,000 in fresh funds deposited or invested with OCBC.

On top of that, you can’t withdraw any funds from the Premier Dividend+ Account and need to make monthly top-ups of S$3,000.

Considering these conditions, you might find that a good Money Market Fund can deliver similar returns without the hassle of high minimum balances and restrictions.

There are also other options if you can take a bit more risks. Such income instruments such as Singapore Bonds and REITs are offering good risk/rewards given the depressed prices in the past few years.

What do you think? What are your favourable income investments? Share your thoughts in the comments below!

About the Author

Ivan Guan is the author of the popular book "FIRE Your Retirement". He is an independent financial adviser with more than a decade of knowledge and experience in providing financial advisory services to both individuals and businesses. He specializes in investment planning and portfolio management for early retirement. His blog provides practical financial tips, strategies and resources to help people achieve financial freedom. Follow his Telegram Channel to join the FIRE community.
The views and opinions expressed in this article are those of the author. This does not reflect the official position of any agency, organization, employer or company. Refer to full disclaimers here.

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