The Krisflyer UOB Account promises so much, but can it deliver?

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.

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31 thoughts on “The Krisflyer UOB Account promises so much, but can it deliver?”

  1. Base miles are 0.4mpd. The bonus miles are in tier of 1, 3 and 5mpd according to your deposit amount. Bonus miles capped at 5% of deposit amount. That’s all I know for now. Doesn’t seem extremely impressive.
    For an account with ~$100k, u will max out the bonus with approx $1670 in spend.

    1. If bonus miles are capped at 5% of deposit, shouldn’t an account with ~$100k in deposits max out the bonus with $5k in spend?

      I think an interesting point to note is whether the miles cap is a monthly one or an annual one based on the average annual account balance.

    2. Woah thats horrendous… bonus miles capped at 5%. Did not see that anywhere, where did you get that?

      Even taking people’s 2c per mile valuation, and an interpretation that the 5% cap applies to the spend amount (and not the miles which is even worse):
      $10,000 x 5% = $500 cap (using a $10k balance as an example)
      $500 x 1.4mpd = 700 miles cap
      700 miles = $14 (at 2c per mile)
      I assume there is no interest on this account (or the negligible 0.1% stuff which I disregard), and so the “interest” in miles on a $10k deposit is $14 per month, or using simple interest 1.68%. Even if you are one of those types who cannot get a credit card, you can generate similar returns from a FD or an interest bearing account… let’s see the details

      Also note that the 5% cap on $10k deposit would be $500 per month spend, which is the minimum spend to generate any miles….

  2. I am lacking in knowledge. Only know of two credit cards which have 4mpd. One is woman’s card (capped at $2000) and the other is UOB PPV (capped at $1000 with millions of exclusions. Ha).

    May I know what other credit cards offer 4mpd ?

    1. HSBC Advance, online spent. Requires opening Advance account, but I’d rather do my root canal without anesthesia then deal with HSBC.

      DBS Altitude Amex for first three month after opening account with overseas transactions, but take into consideration of 3.5% FCT fee.

      Couple of other cards with specialized categories – Citi PremierMiles, OCBC – have not tried them.

  3. This account is curious. The potential is quite interesting, but I suspect UOB with their track record will hobble this into something useless.
    Without the published details, some items I want to find out are:
    – Is this debit card MC or Visa?
    – Exclusions on mile earning spend
    – Mile earn caps
    – Is this direct convert to miles or UNI$, so have to pay the stupid $25

    By the way, noticed that some news outlets just reworded SQ’s press release on this item, even including website links which SQ gave but are dead. Don’t journalist in Singapore bother to check a little before regurgitating pressers?

  4. Think I would only be interested in using this to pay “obligatory” bills (such as loans, etc that normally do not earn you points/miles) via AXS e-station if it is a MC debit card, and earn the 1.4 mpd (Better than nothing i guess). Otherwise, better off using 4 MPD CCs and invest/deposit your cash somewhere else to grow your retirement egg…

    1. thats a great point. in DBS, you can set up a multiplier account and transfer most funds there. not sure if UOB has a similar feature.

  5. famous just because of you!

    Anyway, its disastrous! No interest and they are targetting millenials earning up to $30000 per annnum. Most likely they will have only 1.4 mpd spent then….

    Its a fake seriously.. a fake promotion…sad

  6. I got excited when I heard about this product launch yesterday, but now that the terms and conditions are released it’s a pretty big dud.

    I agree firstly that carrying a debit card with $350k balance can be a pretty ugly situation if you lose a wallet or fall victim to fraud!

    However, for someone miles focused, the 5% miles cap really makes this worthless to tie up so much cash in an account that pays zero interest. The UOB website example shows someone with a $350k balance with monthly debit card expense of $2,500 (so the illustration stays below the 5% cap)…I think most people with $350k would likely spend more than $2,500/mo. With the bonus miles structure, a $350k balance holder can spend maximum of $3,240/mo before you hit your cap. Definitely no way to tie up that much capital to be limited to that minimal cap.

    1. I’m not sure I understand how this 5% miles cap works. Can someone clarify? If my monthly avg Balance is 350k, then 5% is 17.5k. Does that mean I can earn 5.4mpd up to 17.5k of spending?

      1. No. If your monthly avg balance is $350k, the max bonus miles you can earn is 17,500 miles. That’s according to the ‘example’ scenarios from the official website. Strange way of calculating..

      2. My understanding based on the “Example” on the Krisflyer UOB website is the MILES cap is 5% of the account balance. So a $350,000 account balance means your cap is at 17,500 miles. It’s a bit non-intuitive the 5% cap is in miles while the account deposit is in dollars.

        If I’m mistaken and it’s actually $17,500 in spend as the cap which can get you 94,500 miles/mo ($17,500 * 5.4 miles/dollar) then that is a completely different story and this starts to look very compelling as an alternate/replacement to HSBC Advance.

        1. no, you’re not mistaken. the cap per month in this case would be 17.5k miles. i’ve been playing around with the calculator and can confirm this. man, what a rip off.

    2. You could have 2 bank accounts to make this work. DBS Multipler for example only gives you the higher interest rates for the first $50k of deposits. So if you have more sitting in such an account move it over to this UOB account (ideally at least 100k) and use the debit card for general spend (instead of getting the 1.2/1.4 mpd on general things with Citi PremierMiles/DBS Altitude/UOB PRVI miles) and get 3.4 mpd. This of course is assuming you are sitting with an additional 100k and do not currently have an investment opportunity.

      1. If you had an excess 100k open a CIMB Fastsaver account for 1% (Max 50k) per annum no hoops to jump through.
        And depending on your inclination to jump through hoops either the UOB One account with One card or OCBC 360 account.
        Otherwise CIMB Starsaver gets you 0.8% per annum, also no hoops.

  7. Hi Aaron,

    I like your analysis on this matter – clear, concise and logical. As someone who’s been a gatekeeper for the new product approval process in a bank, I must say that the UOB folks dropped the ball on this – they may have de-risked the product and made it a deposit generator to boost their LDR but they absolutely did not do right by their customers – the way the product is structured is so unclear that it could be construed as misselling.

    Just to point out that the HWZ quote is a little inaccurate though – debit cards and credit cards have the same liability of up to $100 (c.f. ABS Code of Practice for Banks – Credit Cards, paragraphs 5a and 5e on Cardholders’ Liability):

    “5) Cardholders’ Liability
    To give cardholders more certainty about their credit card liability, card issuers should put in place the following measures to limit credit cardholders’ liability for unauthorised transactions:

    a) Prior to notification of credit card loss to card issuers, the maximum liability for cardholders due to unauthorised charges is $100 unless the cardholder has acted fraudulently, or has been grossly negligent, or has failed to inform the card issuers as soon as reasonably practicable after becoming aware that his or her card has been lost or stolen. Card issuers will investigate and may consider waiving at their discretion the $100 liability for unauthorised charges on a case by case basis. Interest charges and late fees will not be levied during the period when investigations are being carried out.

    e) The $100 liability limit for unauthorised transactions also applies to all debit cards which function like credit cards, allowing cardholders to pay for purchases locally, overseas and online.”

    Thank you again for educating us on the ins and outs of mileage hacking – I follow Lucky’s site avidly but there never was a local take on the Singapore card market till your site came along – great work!

    1. thanks! i suspect what they were referring to was the withdrawal limit on the debit card. if you don’t set a sufficiently low limit then losing your card could lead to large withdrawals of cash before you manage to cancel it. I think the ABS code of practice is referring to the liability for transactions made through the visa/mastercard feature on the debit card. someone correct me if i’m wrong.

  8. well here is a take. Just a little contribution to thank you for all your efforts to write up articles that will help people.

    The product is not bad.

    Before i get stoned!

    It just serves a different market from what they say and from most readers of this blog.

    It looks to be a great private banking product to the private banking clients (many of who just keep cash. millions just sitting there earning very low rates because it just feels safe. believe it or not), to the kids of rich clients(part of their trust money?), to many successful hawkers, self employed ppl out there who cannot get a credit card due to bad credit but made good or declared income (or tax declaration) unlike what most employees could. This list is not exhaustive but these type of ppl do exist. Yes many in spore.

    Perhaps this is the real target market instead and they could not say it?

    Looking at the economics, it is also not too bad. Let’s just say you are one of the above in category and you have 1mm in the account. If you spend 10k a month (and i guess one should calculate their spending if at all possible and topping up), they should be able to get 50,000 bonus pts +4000 base pts = 54k or 648k per year of krisflyer pts.

    based on that, one can fly 4.98 times first class to tokyo based on 130k redemption. so using 5 x 8467.5= 42337 sgd.
    Compare this to 2% interest (which is very good for cash) of 20k per year on 1mm dollars, it almost twice that. opportunity cost would be 20k cash and 1.4 miles per dollar on 120k spent and that is 168k miles (at least without privi miles bonus etc etc)but that may still work out to be about 1 first class trip (totally average of 28 to 30k cash and cash alternative benefits)

    For some people they may appreciate the miles more than the interest after all. One man’s meat is another’s poison. But hey all are made differently and all people have different values. For those who fly a lot on their own accts, this may make good sense.

    Alas most of us, may not be in this category but lets not make haste to say this is a bad product if it doesnt apply to us (i dont work in any bank by the way, and uob need not confirm i am not one of their staff) but for once, hawkers, self employed, business ppl can have something interesting for them if they meet the criteria as alot are shut off to credit cards. More products is better than none, and this is one category, banks have ignored for a while. And perhaps over time, things will tweak for the better.

    So Uob may hit their targets for other reasons than what they said. You will be surprised.

    Only thing, that said the front is gonna get more crowded after this.

    Hope we wont be dragged off. 🙂

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