DBS Multiplier Major Changes (Feb 1 2020) – Solution

If you can spot the suggested solution already detailed in my prior article here this morning, then all the upcoming changes on Feb 1 2020 will not affect you. Yes, all these changes will be transparent to you if you implement this solution before 15 Feb 2020.

What is the suggested solution again?

Simply start a Regular Savings Plan (RSP) of $100 per month before Feb 15 2020 to qualify for the Investment Category from Feb 2020 onwards, valid for 12 months.

What is RSP?

You can read all about RSP here at DBSwebsite.

I provide a summary below:

1. Objective of RSP: The primary purpose/objective of this RSP is just to help you earn bonus interest on the Multiplier Account. It is not meant to be an investment of monies for long term gain.
2. You can either invest in ETFs or Unit Trusts. Read the link above for the 4 ETFs and the list of Unit Trusts eligible for RSP.
3. Because my objective is just to earn interest, I will have to choose a fund which is stable, not subject to much market volatility/uncertainties, to minimise the risk of potential capital loss. One such type of fund is Fixed Income Unit Trust, my preference.
4. DBS charges a small fee whenever you invest $100 per month, less than $1 for Unit Trust RSP. So if the additional multiplier interest you can earn is much more than $1 per, it covers the cost of this investment.
5. The RSP is only “valid” for 12 months, ie it will only help you earn bonus interest for 12 mths. To continue to earn bonus interest for the next 12 months, you have to start a new RSP on a different fund (say B), ie different from the first RSP (say A). If you want to buy the same fund (say A) for the next RSP, you have to terminate the old RSP ( A) at least 6 months before and must fully redeem/sell the units.
6. You must start the RSP before the 15^th of the month to qualify for bonus interest for the current month onwards. DBS will then deduct $100 per month on the 15^th (next business day if 15^th is non-business day). $100 will be posted to your investment account 3 business days later. It will be updated in the Bank and Earn Summary (BNE) another 3 business days later. You should always check your BNE to confirm updates and the interest rate awarded.

If the benefit (additional Multiplier Interest) is not worth the effort/cost/risk of the RSP investment, then explore other high interest savings account with other banks which can give you higher interest with less/easier criteria to meet.

Eg OCBC360 - How to Hack! (Boost Your OCBC360 Interest Rate to 3.55%pa from April 2019!)