Bank of China savings account interest rate review: Inconvenient but rewarding

When you think of putting your life savings in a bank, chances are DBS Multiplier, OCBC 360, or UOB One savings accounts would come to mind first.

You're familiar with the banks, probably already have an existing account, and trust that your savings would be safe with them. It's also the most accessible.

However, when you take a step out of your comfort zone, you'd see that foreign banks in Singapore might actually be worth your attention. Bank of China's SmartSaver savings account is one such example. If you can get past the inconvenience, its interest rates are rather rewarding.

While there might not be that many Bank of China outlets sprawled across town as there are the more popular banks, the hassle might be worth it after all. Here's a breakdown of everything you need to do before you decide if you're willing to go the extra mile or nah.

1. Bank of China savings account interest rate

Once upon a time, Bank of China's SmartSaver savings account offered the best interest rate in all of the land. We're talking a whopping 3.15 per cent! Those were the good old days.

Today, the maximum interest rate you can hit with the Bank of China SmartSaver account might still be a generous three per cent p.a. but there's a catch. It's not nearly as easy to hit the three per cent p.a. interest rate as it once was.

As with most banks, the Bank of China SmartSaver savings account now requires you to jump through multiple hoops to earn a higher bonus interest rate. Here's the breakdown of the transactions and the respective interest rate you can earn:

Bank of China savings account	Interest rate
None (base interest)	0.1 per cent
Salary credit	0.3 per cent ($2,000 to $6,000) OR  0.5 per cent ($6,000 & above)
Credit card spending	0.3 per cent ($500 to $1,500) OR  0.5% ($1,500 & above)
Three x bill payments (min. $30)	+0.3 per cent
Extra savings (above $80,000)	+0.4 per cent
Insure with BOC (min $12,000)	+1.5 per cent

As you can see from the table above, the Bank of China SmartSaver account rewards those who have money to spend.

If you're a regular sally, earning less than $6,000, cannot afford monthly credit card spend of $1,500, don't have savings above $80,000, nor extra cash to spend $12,000 on insurance, you won't be able to make the most out of the Bank of China SmartSaver account.

So, realistically, if you deposit your salary of anywhere between $2,000 to $6,000 every month, hit $500 credit card spend, and pay three bills of at least $30, you'd only be able to earn a total of 0.3 per cent + 0.3 per cent + 0.3 per cent + 0.1 per cent in interest. That's realistically one per cent altogether including the base interest rate.

Compared to other savings account, Bank of China's SmartSaver account's realistic bonus interest rate of one per cent is still higher than the 0.05 per cent to 0.5 per cent interest that most other banks offer. However, you have to work quite hard for it.

2. Who is the Bank of China SmartSaver account for?

Bank of China's SmartSaver account is most suitable for high earners and spenders. Especially, if you have enough cash to buy insurance products from the Bank of China, you'd earn an additional 1.5 per cent bonus interest for 12 consecutive months.

When you qualify for the other bonus interest categories, you can earn up to a whopping three per cent in interest on your first $80,000. Given all the interest rate cuts that have happened in the last two years, three per cent is about as generous as it gets.

If you're neither a high earner or a lavish spender and qualify for the one per cent p.a. interest rate at best, you are better off looking elsewhere that does not require you to jump through multiple hoops to earn a comparable interest rate.

Let's compare against the more popular local banks to see if the inconvenience is really worth it:

3. Bank of China SmartSaver account vs POSB SAYE savings account

POSB needs no introduction. If you're a Singaporean, you probably already have an account with POSB. Should you then open a separate account with the Bank of China?

The POSB SAYE savings account is great if you already have a DBS/POSB account you're crediting your monthly salary to. Every month, POSB SAYE automatically deducts a stipulated amount of anywhere between $50 to $3,000.

	Bank of China SmartSaver	POSB SAYE
Interest Rate	0.1 percent – three percent	Two per cent p.a. (after two years)
Salary Crediting	$2,000 upwards	No
Credit Card Spend	$500 upwards	No
Bill Payments	Three bills (minimum $30)	No
Extra Savings	$80,000 above	No
Insurance	$12,000 upwards	No
Monthly Deposit	No	$50 – $3,000

If you don't make any withdrawals for two years, you'd earn a cash gift interest of two per cent p.a. without lifting a finger.

Plus, there's no minimum salary amount that you need to hit unlike BOC which requires a salary credit of at least $2,000. Needless to say, there are no other hoops you have to jump through either.

As long as you're able to carefully decide how much in savings you can set aside each month and forget about it for two years, the two per cent p.a. is very easily attainable.

With a higher interest rate and no hoops than the realistic interest rate you can earn with BOC's SmartSaver account and no hoops to jump through at all, it's definitely one to consider.

4. Bank of China SmartSaver account vs DBS multiplier account

Like BOC's SmartSaver account, you can earn a maximum interest rate of three per cent with the DBS Multiplier account if you jump through all the hoops. The DBS Multiplier account demands a compulsory income credit of at least $2,000 in the form of salary or dividends.

On top of that you have to do all the following to qualify for the maximum interest rate:

	Bank of China SmartSaver	DBS multiplier
Interest Rate	0.1 per cent – three percent	Two per cent p.a. (after two years)
Salary Crediting	$2,000 upwards	$2,000 upwards
Credit Card Spend	$500 upwards	Yes
PayLah! Spend	No	Yes
Home Loan	No	Yes
Bill Payments	Three bills (minimum $30)	No
Extra Savings	$80,000 above	No
Insurance	$12,000 upwards	Yes, yearly
Invest	No	Yes, yearly

It's even more of a hassle than BOC's SmartSaver savings account given that you have to get a home loan, invest and insure with DBS.

Most of us don't have that kind of money to spend. However, if you're looking to get a home loan, the DBS Multiplier account would make sense as you'd be able to hit at least two of the additional categories on top of salary crediting.

If not, you'll only be able to earn a realistic 0.4 per cent for income credit and meeting the requirements of one of the four listed categories. So, to conclude, skippity hop onto Bank of China's SmartSaver account!

5. Bank of China SmartSaver account vs OCBC 360 account

The OCBC 360 account, like the DBS Multiplier account is made for the LeBron James of the world. By that, I mean you need to be able to get through multiple hoops to earn the highest interest rate possible.

With the OCBC 360 account, you can earn bonus interest of up to 1.2 per cent on the first $75,000 of your account balance if you do any or all of these:

	Bank of China SmartSaver	OCBC 360
Interest Rate	0.1 per cent – three per cent	Two percent p.a. (after two years)
Salary Crediting	$2,000 upwards	$1,800 upwards
Credit Card Spend	$500 upwards	No
Bill Payments	Three bills (minimum $30)	No
Extra Savings	$80,000 above	$500 more than previous month/ $200,000 balance
Insurance	$12,000 upwards	Yes
Invest	No	Yes

That's the dream but welcome to the real world where most of us regular folks can at best only credit our salary of at least $1,800.

If that's you, you can earn up to 0.3 per cent in bonus interest with the OCBC 360 account which is on par with BOC SmartSaver account's 0.3 per cent for salary crediting.

However, the latter demands a minimum salary credit of $2,000. The former might be an option for you if you don't meet BOC SmartSaver's minimum salary credit requirements.

However, if you do meet the minimum and have at least three bills of at least $30 to pay, you would earn better interest rate over at BOC's SmartSaver account. BOC's base interest is also twice that of OCBC's measly 0.05 per cent.

By now, you should have your mind almost made up about whether the BOC SmartSaver account is worth jumping onto. Here are some final details you should know before you sign up for an account.

6. Bank of China SmartSaver account minimum balance (and other things to know)

Before you open any savings account, you must take note of a few things: minimum deposit, minimum balance, the fall below fee, and any account closure fees.

Bank of China's SmartSaver savings account has a very reasonable and affordable initial minimum deposit of $1,500 that you need to fork out when you open your savings account with them.

Afterwards, do take note that you must always have at least $1,500 in your account at any given time. Anytime you decide to buy an expensive Playstation 5, end up with only $1,000 in your BOC savings account, you'll be charged $3 for that month. Ok la, $3 per month sounds negligible right?

• Minimum age: 18 years old
• Nationality: Singaporeans, PRs, foreigners
• Initial deposit: $1,500
• Minimum balance (monthly): $1,500
• Fall-below fee (monthly): $3
• Early account closure fee: Not applicable
• Bonus interest cap: Maximum of three per cent p.a. on the first $80,000 in account

ALSO READ: 5 best regular savings plans in Singapore 2022: Invest with $100 a month

This article was first published in MoneySmart.