Bonus-interest savings accounts advertise a headline “up to” rate that sounds close to an investment return. Few savers actually earn that figure on their whole balance, because bonus rates usually apply only up to a balance cap and only in months when you meet each condition.
The rate you really earn depends on four things: the base rate, which bonus conditions you meet each month, how much of your balance the bonus covers, and what meeting those conditions costs you. Once you can work out that number, comparing accounts is quick.
This guide explains the mechanics with a hypothetical account. For which real accounts pay what right now, see our comparison of the best savings accounts in Singapore; if you are new to bank accounts, start with what a savings account is.
The Anatomy of an “Up To” Rate
Most bonus-interest accounts are built in layers:
- A base rate paid on your whole balance whatever you do. It is usually very low.
- Bonus categories, each switched on by a condition. Common ones are crediting your salary, spending a minimum amount on the bank’s card, paying bills, growing your balance month on month, or buying an insurance or investment product.
- A balance cap. Bonus rates usually apply only to the first portion of your balance. Above the cap, you earn the base rate.
- Sometimes, balance tiers. Different slices of the balance can earn different bonus rates.
The “up to” figure is what you would earn if you met every condition, every month, with a balance at or below the cap. Miss one condition for a month and that layer is usually gone for that month.
The short version: The “up to” rate is a ceiling, not a promise. Work out your own effective rate: the interest you would really earn in a year divided by your average balance.
A Worked Example With a Hypothetical Account
The figures below are invented for illustration. They are not any bank’s current rates. Imagine “Account A”:
| Layer | Condition (hypothetical) | Rate (hypothetical, p.a.) |
|---|---|---|
| Base | None | 0.05% |
| Salary bonus | Credit a salary of S$3,000 or more | 1.00% |
| Card bonus | Spend $500 or more on the bank’s card | 0.50% |
| Growth bonus | Grow your average balance by $500 or more on last month | 0.50% |
| Wealth bonus | Buy an eligible insurance or investment product | 1.20% |
| Advertised | All conditions met | “Up to 3.25%” |
Bonus rates apply only to the first $100,000. Interest figures below are simplified annual amounts that ignore monthly crediting.
Saver 1: $60,000, salary and card spend only
The rate on the whole balance is 0.05% + 1.00% + 0.50% = 1.55%. That gives about $930 a year. The effective rate is 1.55%, well under half the advertised 3.25%.
Saver 2: $150,000, every condition met
The first $100,000 earns 3.25%, or $3,250. The remaining $50,000 earns the 0.05% base rate, or $25. The total is $3,275 on $150,000, an effective rate of about 2.18%.
Saver 2 met every condition and still earned well below the headline rate, because a third of the money sat above the cap.
Saver 1 again: a month with no salary credit
Suppose Saver 1 is between jobs for a month. For that month, the salary layer drops away and the rate on $60,000 falls to 0.55%. Over a year, one or two months like that pull the effective rate down noticeably.
You can test your own balance and conditions in our savings account effective interest calculator.
Count the Cost of Each Condition
A bonus is only worth having if meeting the condition costs less than it earns.
- Card spend. If you would spend $500 a month on that card anyway, the card bonus costs nothing. If you move spending from a card that earns better rewards, count what you give up. Our guide to cashback versus miles cards shows how to value those rewards. If you spend more than you planned just to qualify, count that too.
- Insurance or investment purchase. The wealth bonus in Account A is worth up to $1,200 a year on $100,000. A product bought only to qualify may carry fees, lock-ins or surrender charges that cost more. Judge the product on its own merits first.
- Fees. MoneySense suggests asking what fees apply, what happens if your balance falls below the minimum, and whether there is an early closure fee.
Questions to Ask Before You Open a Bonus Interest Savings Account
Before opening an account, check these points in the bank’s terms:
- How is interest calculated (for example, on the daily balance or the average daily balance) and when is it credited?
- Does the bonus apply to the whole balance or to tiers, and where is the cap?
- What exactly counts as a “salary credit” or “eligible spend”? Some transaction types may be excluded.
- Does a promotional rate end after a set period?
- What is the minimum balance, and what fee applies if you fall below it?
Interest on deposits with approved banks and licensed finance companies in Singapore is not taxable for individuals, according to IRAS. The effective rate you calculate is therefore what you keep.
If the conditions do not suit you, see how T-bills, Savings Bonds and fixed deposits compare. Our emergency fund calculator helps you decide how much to keep instantly accessible.
Deposit Insurance: What Is and Is Not Covered
Singapore’s Deposit Insurance Scheme, run by the Singapore Deposit Insurance Corporation (SDIC), protects Singapore-dollar deposits up to $100,000 per depositor per Scheme member. MAS raised the limit from $75,000 with effect from 1 April 2024.
According to MoneySense, the scheme:
- Covers Singapore-dollar deposits in standard savings, current and fixed deposit accounts. It also covers Singapore-dollar money placed with Scheme members under the Supplementary Retirement Scheme (SRS), the CPF Retirement Sum Scheme and the CPF Investment Scheme.
- Does not cover foreign currency deposits, structured deposits, structured notes, or investment products such as shares and unit trusts.
The limit applies per bank, not per account or branch. Accounts at different branches of the same bank are added together and insured up to $100,000 in total. CPF Retirement Sum Scheme and CPF Investment Scheme money is insured separately, up to its own $100,000.
All full banks and finance companies in Singapore must be Scheme members. Banks must also tell you which products are insured, in account opening forms, statements and marketing materials.
What To Do Next
- Take your last three statements and calculate your effective rate: interest received divided by average balance, then annualised.
- List each bonus condition and ask honestly whether you would meet it anyway, every month.
- Once you know which conditions you meet, compare real accounts on our best savings accounts page, which works out what each pays on the same balance.
- If you hold more than $100,000 at one bank, check how much falls outside deposit insurance on MoneySense’s deposit insurance page.
