Here’s Why Couples in Singapore Decided to Have a Joint Account to Maximize Interest Earned on DBS Multiplier

They say that two are better than one because they will get more for their effort or investment. That couldn’t be truer with the DBS multiplier account, a joint account designed with couples in mind. Prior to going out and opening this account, it is important for you to sit down with your partner and have a discussion on what your financial goals are, and what benefits are to be enjoyed by opening such an account together.

It is important for couples to create a financial vision for themselves so that they are working off the same page. In addition, it is advisable to set goals to help you achieve that vision, and then find financial services that can assist in the fulfilment of it.

Working with goals in mind is important because it helps you take charge of your life, helps in creating the future that you hope for, allows you to clarify your values, and also enables you to measure the progress that you are making in the attainment of the vision you have for yourselves. A joint account then becomes a tool for you and your partner. It is a shared account, and it helps you maximize on the interest you can earn. With DBS, to make the most of the interest given, you should consider having a joint account, and a DBS multiplier account too. Here is how to get started!

First step: Both of you open an individual DBS multiplier account

This is an individual savings account offering very attractive interest rates. This is important because you want your money to work for you by earning interest while it is at the bank. This account has very reasonable eligibility requirements, which means that just about anybody can open one. They are only available for individuals as personal accounts and cannot be used as joint accounts. The interest rates are not as good when more than one person signs up for this account.

It is very easy to open this account since one is able to open an account online. The goal of opening this account should be to maximize how much money you can earn with individual accounts, which is currently as much as $100,000, while at the same time earning even more in interest rates through the joint account.

Second step: When you open a joint account, both you and your partner will appear as the holders of the account. Since you will have opened a DPS multiplier account, this account will also be with DBS/ POSB. DBS offers two different joint accounts, namely Joint-Alternate and Joint-All.

• Joint Alternate – This account allows for both you and your partner to carry out transactions individually. This includes withdrawal of money. This means that it is possible for you or your partner to transact independently of one another. The acknowledgement or permission of the second partner is not necessary. An example of this is the issuance of two separate ATM cards for each person, and either one is allowed to withdraw money from the account.
• Joint All – This account demands full transparency from both partners, which means that any transaction carried out will require the permission or acknowledgement of the other account holder.

You need to sit down as a couple and figure out which account best serves your goals as a team working towards a specific financial future.

Third step: Salary processing through the joint account

Even though each one of you has a DBS multiplier account, salaries should not be credited to these accounts but to your joint account. The DBS multiplier account actually recognizes any salary crediting done to any of your other DBS/POSB accounts, which means that your salary doesn’t have to go through this account in order for you to realize the high interest rates promised. As such, even though your salary is credited through the joint account you have created, it still satisfies the requirement of the DBS multiplier account for salary crediting.

As soon as your salary and that of your partner is credited into your joint account, the figure is totaled and this amount is recognized as the crediting of a salary, which then pushes both you and your partner to the next DBS multiplier tier. So your salary boosts that of your partner, and your partner’s salary boosts yours to get you over into the next tier. Here is an example to illustrate this:

Your salary + your partner’s salary = Combined salary credited

Assuming that you earn $3,000 and your partner also earns an additional $3,000, even if you combined investments and spending, you would most likely both fall individually within the tier of those earning more than $2,500 and less than $5,000 per month (>$2500 – <$5000).

However, when you open a joint account and credit both salaries into the said account, the amount of your combined salaries will be $3,000 + $3,000 = $6,000. As such, both individual DBS multiplier accounts will recognize a salary of $6,000 for each one of you. With this, each one of you is bumped up to the next tier, which is that of those earning more than $5,000 and less than $15,000 per month (>$5000 – <$15,000). This opens you up to more benefits because you are able to earn more interest.

Here is how the accrual of interest works in DBS multiplier accounts:

For an account balance of $50,000 and under:

For the next $50,000:

This means that whereas you would have been earning 1.85% or 2.00% per annum in interest for the first $50,000, depending on the transactions carried out in various categories, and 2.20% for the next $50,000 in your DBS multiplier account without the benefit of the joint account, you are now pushed into the next tier and can enjoy 1.90% or 2.20% for the first $50,000 depending on the transactions carried out in various categories, and for the next $50,000 you qualify to earn 2.4% per annum.

Fourth step: Credit dividends into the joint account

To maximize the advantages of this account further, you should consider crediting your dividends to this account. This means that you and your partner need to change the account listed for direct crediting in your CDP account and replace it with the joint account. The benefits of this are similar to those of salary crediting as follows:

Assuming you have invested in stocks that will be paying dividends in the months of January and February, and your partner has dividends due in the months of May and November. Should you credit these dividends into your DBS multiplier accounts, then you would have transactions only in January and February, and your partner would have transactions only in May and in November.

However, if both of you route your dividends to the joint account, then you will both register investment transactions in the four months. That is in January, February, May, and November. If you are looking at a significant figure from the dividends, the amount can actually bump you both into the tier above just as salary crediting does. To take advantage of this, you can do one of two things:

• You can log into your CDP account and make changes in Direct Crediting Service.
• You can speak to DBS and use their DCS (Direct Crediting Service).

Fifth step: Make transfers from your joint account to the individual DBS multiplier account

Once the salaries have been credited to the account you both share, the joint account, each one has access to the other person’s salary. You should now transfer monies to the individual accounts because the interest you earn is calculated based on how much your DBS multiplier account is holding as an average daily balance.

This will allow you to have your own funds to use, and you can now enjoy greater returns. As such, if you are looking to earn as much interest as possible, you will need to make this transfer earlier on in the month. Remember that this account also has a credit card spending requirement. To maximize on the interest earned, be sure to use the card during the month as well.

Even though transferring money from one account to the other may feel like a hassle, set your eyes on the benefits to be gained by starting up a joint account. As you combine your salaries and dividends, you will be able to make sure that you enjoy the maximum benefits of this account and put your money to work.

This account will require a high level of trust between you and your partner, so make sure you are both comfortable with this before taking the next step. If you can agree on opening a joint account, you will be taking the best route to maximizing on the interest to be earned by both of you. This means that the money you have saved up at the bank will be working for you, and you will earn more money that can be used to secure your future.