As value investors, we like to have a simple and easy way to get most value out of our money. Today, we will be won’t be touching on value investing. We will be touching on something that most of us already have. That is your bank account.
Warning: Promotion come and go. The best interest and benefits now might not be the best in future. Companies are known to outbeat each other in terms of benefits over time. This represents my personal opinion and we do not have any vested interest for people to open this account.
Introducing the DBS multiplier account.
How Does This Work
Enjoy up to 3.5% p.a. with the DBS Multiplier Account. Just do at least 2 things.
1) Credit your salary. No minimum salary credit.
2) Transact in 1 or more of the following categories: credit card spend, home loan instalment, insurance, and investments. No minimum credit card spend. The more categories you spend in, the higher the interest.
How Much Will You Make
Let’s say you are a typical Singaporean and would like to find out how much interest you can get.
According to the Ministry of Manpower report, a median pay (after CPF) in 2016 is $3244.80.
According to Singstat, the average food expenses in Singapore is $1188. Let’s assume that 50% of the expenses are done using credit cards since some expenses are at hawker centre that have no credit card facilities. That will be $594.
With these 2 assumptions, you would be able to get 1.85% p.a. on your first $50,000 in your bank account. That would mean getting $925 a year worth of interest (if you have $50,000 in your bank account). Not too bad for just saving and spending money.
To put it in context, it is like getting 33% extra monthly pay.
If you want to try your hand on your own computation, go to their website DBS Multiplier to see how much you can get.
Now, there you have it. 1.85% per year. Now if you intend to go for something that is 10% to 15% a year, that is when you need to research more into it. One way to do it is via value investing.
In Journey with money, we want to empower individuals to retire early and avoid financial pitfalls such as this. Such a financial pitfall will delay retirement by at least a decade if not forever. Here is a video to explain why compounding is beautiful.