United Overseas Bank (UOB) Limited is a Singaporean banking organization that is willing to provide you some decent interests.
To add on, they spare you the headache of executing a number of actions need to be done to achieve higher interest rates! Up to 3.88%!
A saving account that has provide more than 1% of interests does warrant a hard look at it.
In this blog post, we will be discussing:
- How UOB One Account works?
- Is UOB safe?
- Who is it for?
- Is it worth it?
HOW UOB ONE ACCOUNT WORKS?
The actions you need to achieve higher interests are:
- Use your UOB credit card and spend at least $500 per month
- And credit your Salary into the bank account or you have 3 GIRO debit transaction
And then next is depend on your account balance. For each $15000 interval, they will earn respective interest rates.
For example, let’s assume your $16000 in your bank account, and you have spent $500 on your credit card.
So your annual interest rate will be:
1st $15000 will entitled for 1.85% ($277.5)
The next $1000 will be 2% ($20)
In total, you get $297.5 interest.
IS UOB SAFE?
Although Singapore banking industry has yet to face serious crisis before, it still pays to be extra caution.
It is comforting to know that all bank deposits are insured by Singapore Deposit Insurance Corporation Limited (SDIC) up $75000 per depositor.
As such, in case any banks fail and that includes UOB, their depositor can get back maximum $75000.
Unfortunately if your bank account is more than $75000, SDIC will not insure any amount beyond $75000.
Which in this case, even if you have more than $75000, those money excess of $75000 will only get 0.05% interest rate under One Account.
So if you are richer than $75000, you might want to consider doing something productive instead of putting here.
Apart from that, our objective is to see if the bank is safe. One simple way to check is the bank’s Assets to Equity Ratio.
Based on UOB’s 2018 Annual report, their Assets stands at $388,092,355,000 and their Equity at $37,812,792,000.
Then their Assets to Equity Ratio are at 10.26! That’s quite good!
WHAT IS ASSETS TO EQUITY RATIO?
The Asset to Equity Ratio is the ratio of total assets divided by equity.
This ratio shows how much of the assets actually belong to the shareholders (aka owner).
A high ratio means the company is using a lot of debt to keep the company function.
If it is too high, investors need to know what is going on. Although there is no ideal ratio, but it is a good idea how much does the company, and in our case, the bank actually owns the assets.
For banks, it is most ideally to have a ratio of less than 15.
WHO IS IT FOR?
IS UOB ONE ACCOUNT WORTH IT?
SIDE NOTE: WHY I COMPARE AGAINST SINGAPORE SAVING BONDS?
DISCLOSURE
The above article is for educational purposes only. Under no circumstances does any information provided in the article represent a recommendation to buy, sell or hold any stocks/asset. In no event shall ViA or any Author be liable to any viewers, guests or third party for any damages of any kind arising out of the use of any content shared here including, without limitation, use of such content outside of its intended purpose of investor education, and any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages resulting from such unintended use.
