I’ve talked about how we could use more innovation in terms of miles earning opportunities in Singapore. To that end, we’ve recently seen banks start to offer customers new ways of earning miles, like Standard Chartered’s miles earning time deposit.
Now UOB has launched an interesting product of its own- UOB’s new Krisflyer UOB Account was launched today, and allows you to earn miles on your savings account (I’m assuming in lieu of interest. It’s not actually specified).
Details are scarce at the moment, but from what I gather your savings don’t earn you miles per se. You have to (1) put money in an account and (2) spend money on the debit card that comes with your account to earn miles.
Here’s the breakdown of how you’ll earn miles on your debit card, depending on your overall account balance
- S$3,000- S$100,000: 1.4 mpd
- S$100,000- S$350,000: 3.4 mpd
- >$350,000: 5.4 mpd
On the surface, this seems great for students and those without a fixed income who want to earn miles. Students just need a minimum of S$3K in their account and they can earn 1.4 mpd for spend on their debit card, which matches the best general spending cards on the market now.
However, there is a catch- you need to spend a minimum of S$500 per month to earn any miles at all. I don’t know about you, but when I was a student I didn’t approach that level.
Besides, we don’t know yet if there are any caps involved or what the fine print reads. Will the 5.4 mpd only be on certain categories of spending (an “up to” type of marketing puffery)? Even if there were no caps, 5.4 mpd may sound great, but are you really willing to tie up $350K in a (potentially) 0 interest earning account just to earn it? Surely you’d be better off investing that $350K across a low to moderate risk portfolio generating 4-5% returns per annum?
I like sgdividend’s take on HWZ–
Even their wealth premium account ( wealth banking) need 350k above then 0.35% pa.
I think u can bet the interest is at MOST 0.35% p a …
Basically exchanging interest for krisflyer miles at 1.4mpd, which could actually have easily been gotten by using other cc for 4milespd ( 1.4 + 4 = 5.4). And debit fraud you eat. CC fraud your liability is 100 bucks.
Quite smart of UOB. They eradicated totally their risk of fraud, tranferring the risk to you , airmiles are dirt cheap for them and yet earn fees for transactions Master/visa/amex , earn more from redemption of points to krisflyer miles and also expiry of orphan miles.
I’ll wait to see the full details before taking a call on this, but let’s remember 5.4 mpd will only sound unbelievably attractive to people who are not aware of specialized spending cards with 4 mpd earning opportunities (and believe me, there are a lot of them). If you’re already maximising your 4 mpd opportunities, there’s no compelling reason to open one of these accounts and tie up $350K.
Perhaps I’m wrong and UOB will count higher interest earning investments towards the $350K balance (and in that sense the UOB Krisflyer account becomes more like a program unto itself), but let’s see what the T&C say before deciding.
Whatever the case, it’s clear UOB expects this to be big- the Business Times is reporting they expect the UOB Krisflyer accounts to bring in S$1.5B of deposits. They’re targeting 200,000 accounts in the next 5 years, which implies an average deposit size of S$7.5K.
I’ll update you as more details become available.