Amid a weakened interest rate environment and a challenging macro climate, Oversea-Chinese Banking Corporation (OCBC) Bank on Monday announced that it will reduce the salary credit bonus interest for customers on the OCBC 360 savings account from July 1.
For balances up to $35,000, the salary credit bonus interest will be halved to 0.6 per cent, down from the current 1.2 per cent. Balances between $35,000 and $70,000 will earn 1.2 per cent interest, down from 2.4 per cent.
The base interest is calculated at the end of each day, based on the daily balance and credited to the 360 account at the end of the month.
The bank will also stop offering the credit card spend bonus interest – currently at 0.2 per cent for the first $35,000 and 0.4 per cent for the next $35,000 – on the 360 account from July 1.
“Unfortunately, the macro interest rate environment has been deteriorating since last year and has declined steeply since March 2020. While we hoped to continue offering our customers the best proposition possible, the current macro-economic environment has made it impossible to do so. We will continue to monitor the macroeconomic environment and improve our product offering(s) once it becomes viable to do so,” said the lender in a statement on its website.
This latest announcement comes about a month after an earlier set of rate revisions for the 360 account took effect on May 2.
In May, OCBC had also lowered the minimum salary requirement to qualify for the 360 account’s salary bonus interest to $1,800, from $2,000 previously.
“Half of the new accounts opened in May will now be able to earn the salary bonus interest, especially customers who are just entering the workforce”, said OCBC head of deposits Gregory Cher in a statement.
Amid the current climate, close to half of the bank’s customers continue to grow their balances by $500 or more each month to qualify for the Save bonus interest of 0.2 per cent for the first $35,000, and 0.4 per cent for the next $35,000 – a trend towards saving as the economy “prepares for tougher days ahead”, said Cher.
He noted that the base for the 360 account has continued to grow steadily at 10 per cent year on year over the past three years. Year on year, customers under 25 who saved $500 or more a month grew three times, while those who earned the Wealth bonus interest grew 2½ times.
“We want to support our loyal customers in this aspect and hence there is no change to the Save or Wealth bonus categories,” Cher said.