I’m going to first address the updates to the OCBC 360 bank account from 1 Apr 2017. As bank profits fall, one of the ways they can reduce expenses is by lowering the interest payments on the high interest bank accounts. This can be done easily by adjusting the interest rate tiers downwards that are earned on the various requirements to be met with one month’s notice and especially after they have captured the customer market share. After all, individual customers are less likely to switch bank accounts the longer they hold on to them or have existing relationships with the specific banks.
As a bank employee, I can assure you that protecting bank profits come first and protecting customer interests come second. Which is why it was always a matter of time before the interest rate tiers on high interest bank accounts are reduced or the requirements to earn them become more stringent. Hence, the importance of being willing to shop around for better deals when these negative changes become unreasonable. This is the impact to us from the updates to the OCBC 360 bank account from 1 Apr 2017:
- I will have to increase the balance in my OCBC 360 bank account to S$70,000 from S$60,000 to maximise the bonus interest earned. I can redirect the required S$10,000 from my Stan Chart or CIMB bank account. But I don’t like increasing my cash holdings with any one particular bank just to get to a worse outcome of earning less interest income than before.
- No change to salary crediting bonus interest of 1.2%p.a.
- Reduction of both the payment of 3 bills online/GIRO bonus interest and OCBC credit card spend of at least S$500 bonus interest from 0.5%p.a. to 0.3%p.a.
- Monthly interest earned from OCBC 360 bank account will decrease from S$110 to S$105 i.e. by S$5 with the above changes.
It’s annoying but not enough to make me switch from my OCBC 360 bank account to another high interest bank account. After all, we already have 2 UOB One bank accounts earning the maximum bonus interest. Plus I like the OCBC 365 credit card since the higher cash rebates on dining, groceries and online spending suit our lifestyle. In conclusion, we probably won’t make any changes for now but I will be monitoring this situation closely.
Time to get back on track about the regular monthly post on investment transactions made for the month of Feb 2017. Nothing eventful happened other than me watching our portfolio value rise from the run-up in the global and local stock markets. This hurts our automated investing buying prices of the ETFs, which were higher than the previous month. A good reminder that we will be net buyers of equities for as long as we remain employed and will benefit more from downward trends in stock markets. Nothing to be happy or rejoice about with the recent bull run.
Maybank Kim Eng Monthly Investment Plan
- Buy 31 units of SPDR STI ETF (ES3 on SGX) at S$3.07 per unit on 8 Feb 2017
- Transaction cost of S$1
- Buy 31 units of Nikko AM STI ETF (G3B on SGX) at S$3.14 per unit on 14 Feb 2017
- Transaction cost of S$1
OCBC Blue Chip Investment Plan
- Buy 470 units of Nikko AM STI ETF (G3B on SGX) at S$3.18 per unit on 22 Feb 2017
- Transaction cost of S$5
- Buy 86 units of ABF SG Bond ETF (A35 on SGX) at S$1.148 per unit on 27 Feb 2017
- Transaction cost of S$0.50
Total invested amount in ETFs of about S$1,800 using Automated Investing for Feb 2017. All of which goes into growing my wife’s ETF portfolio.
Nil for Feb 2017.