Iโve talked about how we could use more innovation in terms of miles earning opportunities in Singapore. To that end, weโve recently seen banks start to offer customers new ways of earning miles, like Standard Charteredโs miles earning time deposit.
Now UOB has launched an interesting product of its own- UOBโs new Krisflyer UOB Account was launched today, and allows you to earn miles on your savings account (Iโm assuming in lieu of interest. Itโs not actually specified).
Details are scarce at the moment, but from what I gather your savings donโt 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.
Hereโs the breakdown of how youโll 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 donโt know about you, but when I was a student I didnโt approach that level.
Besides, we donโt 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 โup toโ 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 youโd be better off investing that $350K across a low to moderate risk portfolio generating 4-5% returns per annum?
I like sgdividendโs take on HWZโ
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 โฆ
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.
Iโll wait to see the full details before taking a call on this, but letโs 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 youโre already maximising your 4 mpd opportunities, thereโs no compelling reason to open one of these accounts and tie up $350K.
Perhaps Iโm 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 letโs see what the T&C say before deciding.
Whatever the case, itโs 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. Theyโre targeting 200,000 accounts in the next 5 years, which implies an average deposit size of S$7.5K.
Iโll update you as more details become available.
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. Thatโs all I know for now. Doesnโt seem extremely impressive.
For an account with ~$100k, u will max out the bonus with approx $1670 in spend.
If bonus miles are capped at 5% of deposit, shouldnโt 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.
Woah thats horrendousโฆ bonus miles capped at 5%. Did not see that anywhere, where did you get that? Even taking peopleโs 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 โinterestโ in miles on a $10k depositโฆ Read more ยป
Full details:
http://www.uob.com.sg/personal/deposits/chequeing/kris-flyer-uob-account/applynow.html
I am lacking in knowledge. Only know of two credit cards which have 4mpd. One is womanโs 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 ?
HSBC Advance, online spent. Requires opening Advance account, but Iโd 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 โ Citi PremierMiles, OCBC โ have not tried them.
Citi rewards and OCBC titanium for shopping
UOB Visa Signature. Min $1k max $2k per statement period for foreign spend.
UOB PP Amex (might be dead). Dining.
UOB PP Amex is 100% dead. I have already pestered multiple CSOโs about it ๐
Any alternative to the UOB PP Amex for dining ?
This account is curious. The potential is quite interesting, but I suspect UOB with their track record will hobble this into something useless. Without the published details, some items I want to find out are: โ Is this debit card MC or Visa? โ Exclusions on mile earning spend โ Mile earn caps โ Is this direct convert to miles or UNI$, so have to pay the stupid $25 By the way, noticed that some news outlets just reworded SQโs press release on this item, even including website links which SQ gave but are dead. Donโt journalist in Singapore botherโฆ Read more ยป
Think I would only be interested in using this to pay โobligatoryโ 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 eggโฆ
pretty sure those transactions will be excluded in what will be a long list of exclusions.
I am dead scared to carry a debit card with 100k to 350k in it.
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.
Not sure if anyone is aware, there seem to be some benefits for account/card holders for Scoot/Tiger.
http://www.flyscoot.com/en/plan-your-trip/krisflyer/krisflyer-uob
Aaron..im 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 thenโฆ.
Its a fake promotion..no seriously.. a fake promotionโฆsad
I got excited when I heard about this product launch yesterday, but now that the terms and conditions are released itโs 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 belowโฆ Read more ยป
Iโm 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?
No. If your monthly avg balance is $350k, the max bonus miles you can earn is 17,500 miles. Thatโs according to the โexampleโ scenarios from the official website. Strange way of calculating..
ah thank you. iโm puzzling over this on a spreadsheet now. expect some thoughts soonโฆ
Which I believe is $3500 spend cap per month (if you maintain $350k). Hope my math is right.
My understanding based on the โExampleโ 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. Itโs a bit non-intuitive the 5% cap is in miles while the account deposit is in dollars.
If Iโm mistaken and itโs 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.
no, youโre not mistaken. the cap per month in this case would be 17.5k miles. iโve been playing around with the calculator and can confirm this. man, what a rip off.
Just as a note, the 5% cap only applies to earning of bonus miles.
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.
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.
Hi Aaron, I like your analysis on this matter โ clear, concise and logical. As someone whoโs been a gatekeeper for the new product approval process in a bank, I must say that the UOB folks dropped the ball on this โ 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 โ 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 โ debitโฆ Read more ยป
thanks! i suspect what they were referring to was the withdrawal limit on the debit card. if you donโt 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 iโm wrong.
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 successfulโฆ Read more ยป
Oh yes, retirees too. so hard for them to get credit cards.