Earning 5% per annum on deposits

The economy had been so bad that recently Singapore banks now only gives 0.125%pa on normal savings account instead of previous 0.25%pa. That is a 50% cut as if deposit interest rates were not already pathetic enough.

If I have $6000 cash in my savings account, I would only earn $7.50 for a year. If I were to put in fixed deposits at current rate of 0.55%pa, I would earn $33 a year.

I'm going to talk about the card by Standard Chartered Bank, the Manhattan Platinum card. The good thing about this card is that it is giving 5% cash rebates for spendings from $3001 onwards, capped at $300.

Consider if I have $500 bills to pay per month, it will cost $6000 a year. Should I pay per month as usual, or should I pay in one short?

The answer is pay in one short $6000. I would swipe my Manhattan card one short to pay off the whole year of $500 bill per month, which amounts to exactly $6000 per year. Reason is simple, Manhatttan card gives me $300 cash rebates which is much more than the interest of $6000 in the bank savings account that can ever generate for me.

Many people keep a lot of money in savings account. So for the portion of $6000, do you want to earn $7.50 from it, or earn $300 from it?

This illustration that I had shown here is absolutely risk-free. Of course $6000 can be higher yielding than 5%pa if you put in investments, but there are risks.

Start charging your utility bills, telephone bills, internet bills, insurance premiums yearly with this Manhattan card before the 5% rebate promotion ends. Also if you are buying big ticket items like LCD TV and furniture, do not opt for interest free monthly instalment schemes.

If you are usually hard-up, having monthly negative cashflow, or you wouldn't have $6000 to spare in your savings account, all the above does not apply to you.

Interest-free Cash loan for 30 days

While funding for my stock purchases after T+3 recently, I discovered I can pay through my credit card. It is not considered as a cash advance, but as a "swipe" card process that is equivalent to swiping your card in restaurants or retail malls.

The only bank in Singapore that allows you to do this is DBS/POSB. You go to internet banking and go to Bill Payment. As my stock broking firm is Phillips, I add a new biller Phillips, my account number is 20(broker code)(6-digit login). For eg, 20XR123456. After I do this, the amount will go into my Phillip Cash Management Account. This cash management account is your account for debiting/crediting when you buy share or sell share respectively.

The trick here is that I have tried 2 times using this bill payment method to pay for my stock purchases. As playing contra for stocks is usually T+3 to T+5, I can now extend the contra period to 1 month simply because I only need to pay back the amount 1 month later when the credit card bill comes.

If you are not buying shares, you do the same thing "swipe" the card to pay to your Phillip cash management account. Afterwhich, you can log on to phillips online and transfer the money in your account back to your POSB savings account. In this case you are actually borrowing the money free of charge. But remember to pay back when the bill comes.

Facilities required:
1) Phillips online trading account aka POEMS (no initial deposit needed for opening)
2) DBS/POSB credit card
3) POSB internet banking

Limitations: Amount you can take is limited to your credit limit which is 2 times of your monthly salary. And you have to repay in full when the bill comes, else normal credit card interest charges apply.

Additional benefit: If you can't repay in 30 days or lesser when the credit bill comes, you can do a balance transfer to other banks at 0% interest pa, but with one-time processing fee of about 6% or lesser. But afterall, this is still cheap cash loan compared to Cash Advance at 24%pa

Maybank ecard

Through lunch with neighbour banker today got to know this card which has quite good perks in my opinion. Basically, the main attraction is having free unlimited access entries to Sentosa and free unlimited Sentosa Express buses. On top of these, there are many discounts on food, hotel, places, etc within Sentosa. In a nutshell, it is a card that is for going to Sentosa. I remember when I last visited Sentosa, I need to pay entrance fee, bus fare, etc for whatever. With this card, many things are cheaper. Not bad. I'm thinking of getting this and pop by Sentosa soon for some fun. There is one more perk that is quite cool, that is able to drive a Porsche for one day as long as you charge $6000 from 1 Aug 2008 to 31 Dec 2008.

This card has no annual fee. It only comes with $10 service fee, but it can be easily waived as long as you charge to your card once every 3 months.. As per MAS rule, it can be applied with just 30k annual income with just a latest payslip.

For the full read-up, can go to http://info.maybank2u.com.sg/personal/card_services/ecard.htm

Citibank CitiPremier - Priority Pass

If you haven't got it, go get it. Not only it's the best card for airmiles, it also comes with a Priority Pass free. This card allows access to airport lounges worldwide, very useful.

I had used the card a in Singapore Changi Airport and in Tokyo Narita Airport. You can eat and drink to your fill, sleep as long as you like, or take a hot bath. It is the perfect place for you relax and sleep while waiting for your flight. Below are some pictures I took from the lounges.


Singapore Changi Airport: Skyview Lounge


Nice, cosy sofa chairs to relax or sleep


Take anything you want, from milk to wine


Japan Tokyo Narita Airport, Northwest Worldclub


Beautiful exterior



Nice chairs to chill out


My iMac station, red wine and snacks

Capitalise on your spendings

Today, many people still like to pay their bills and spendings by GIRO, Cash, NETS, etc. Especially the elder generation.

Actually to make the best of of these, we can use credit cards to pay online by using various banks' internet banking, or external websites like www.vpost.com.sg, or using AXS machines located islandwide. We occasionally have bigger transactions like getting a TV, getting a tour package, buying air tickets, or paying for studies. It would be good if we can get something out of it.

UOB ONE Card has one of the highest cash rebates, offering 3.33% net returns on spendings. For example if u spend $300 for consecutively 3 months, u get $30. If spending is $800 for 3 months in a row, u get $80. These rebates are little/insignificant, but better than nothing. Not to forget, if you spend a lot, then these small rebates may be not bad.

If you like to travel, then Citibank CitiPremier Miles is for you. It is the highest yielding card for Krisflyer miles on your spendings. I have done an anlaysis on it versus the AMEX gold card which pales in comparison to CitiPremier. One thing good also for CitiPremier, the miles u accumulate lasts forever.

Other good cards include Citibank Dividend Platinum, which gives 2% cashback on dining. If you spend a lot in Carrefour, there's this POSB Everyday card which gives 5% returns.

Personally, I carry Citibank, HSBC, UOB and OCBC cards with me only. UOB and Citibank are well known for their dining priviledges, while HSBC and OCBC sometimes have some exclusive movie treats or discounts. As for the best card for drivers, I'm not so sure because I dont drive.