Posts Tagged ‘interest rates’

Now that I’m married, can we get a top-up grant and refinance to HDB loan?

Friday, July 31st, 2009

[note]In summary:

– I bought a hdb flat under singles scheme.
– Not eligible for HDB loan. Took up a bank loan
– I got married after.
– We’re eligible for Top-up Grant and for HDB loan too.
– I can transfer to HDB loan by redeeming my bank loan.
– We now own our existing flat with a HDB loan. [/note]

(Part of “The Almost Complete Goondu’s Guide to Buying a HDB Flat in Singapore” series.)

These days, Singaporeans are spending more time pursuing their careers, and as a result, getting married at a later age. So what would happen if you’ve already bought a flat with a bank loan under the Singles Scheme (35 years or older) and just happen to meet and marry your spouse 2 years later?

You cannot sell off the flat and get another one with your spouse for another 3 more years, since minimum occupation period (MOP) for resale HDB flats bought with grant is 5 years. If you and your spouse’s combined income is still $8k or less, and your spouse has never taken a grant before, you can apply for a Top-up grant. This could mean an addition of $19k-$29k depending on whether your existing flat is near either of your parents. To learn how Top-up grants are calculated, check out the examples on HDB’s website.

If you wish to include your spouse as co-owner of your flat, things get a little complicated. On the legal front, the addition of a name into an existing mortgage lease is the equivalent of redeeming your existing loan, and taking out a new loan under both your names. This involves legal costs, some stamp fees, and your interest rate might change, depending on the prevailing interest rates offered. On HDB side, you would have to fill out a transfer of ownership application too.

Image by martywindle

Why then would you want to go through all this hassle? If you are planning to sell off your flat after 5 years, than maybe it’s not worth going through all the hassle. However, if you plan to keep it for the long term, it saves the legal complication that would be necessary, if something were to happen to you.

But there is another perk really, to adding your spouse to your flat. If you already qualify for a top-up grant, this means that it is likely that you qualify too for a HDB loan. With HDB loan interest rates pegged at 0.1% higher than CPF-OA’s interest rates, this means your interest rate is only 2.6% p.a., and more likely than not, it would remain that for the term of your loan.

For the long term, this is the lowest interest rates you can probably get, and its stable interest rates means you won’t suddenly be forced to fork out cash, which you would when bank variable loan interest rates start rising. Peace of mind.

To find out if you’re eligible for a HDB loan, fill out the HLE application form.

[tip]Fun Fact

Some people are tempted to finance their HDB flats with bank loan, even though they qualify for HDB loans. This is because with most bank loans pegged to SIBOR, and with SIBOR being really low due to the recession, starting loan interest rates are currently lower than HDB’s.

However, when the recession is over and the economy recovers, there is a high chance that SIBOR will rise and all SIBOR pegged home loans will have interest rates higher than that of HDB’s. In this case, even if you earned $8k or less, you cannot go back to HDB and say ‘hey can I refinance with a HDB loan?‘, because HDB does not allow.

In normal situations, you cannot take a HDB loan once you have taken out a Bank loan. The only situation I’ve come to learn of, where taking out a HDB loan to refinance a Bank loan is possible, is in the situation listed at the beginning of this post![/tip]

Earn up to 2% 1.6% 1.38% 1.2% p.a. in a Savings Account

Tuesday, March 17th, 2009

** note, this page is currently not being updated, as bank interest rates have dipped ridiculously low, it doesn’t make much of a difference where you put your money. when banks start posting more competitive interest rates (ie, 1% and above), this page will be updated again. – jul 8, 2009 **

FISCA updates this page for bank interest rates. Check it out. – aug 28, 2009

Have some extra cash around? If you are saving for a rainy day, how about opening a high(er) interest bank account and letting your money grow even more?

Currently in Singapore, a few banks are offering accounts with higher savings. Most of them are able to do so, as these accounts are online bank accounts, and thus do not offer over-the-counter services. This means that you have to transfer funds through online banking. However, some of these banks do offer ATM Cards.

But first of all, let’s take a quick peek at the interest rates offered:

UOB High Yield Account (link)

If you had a million dollars, this account currently offers the highest interest rate of 2% 1.60% 1.2% p.a. Other than that, it’s interest rates are not as attractive as the others listed below.

UOB currently gives the highest interest rates for amounts less than $5k. Apart from that, it’s other interest rates are not very attractive compared to others.

As of March 16, UOB High Yield is really not even worth any consideration, as all other banks offer more attractive interest rates.

Maybank iSAVvy (link)

iSAVvy is a good bank account to have if you have between $5k-$50k. It’s interest rate of 1.68% 1.08% is the highest in the market for this amount range.

iSAVvy is revising their rates from April 4th. They dropped their interest rates from 1.08% to 0.88% to 0.5% for balances between $5k-$50k, and 1.28% to 1.18% to 0.75% for deposits balances $50k-$1mil.

iSAVvy upped their interest rates from Oct 20th. For balances between $5k-$50k, interest is back up to 1.08%, and for deposits balances $50k-$1mil, its now 1.38% They do provide an ATM card to allow for easy withdrawal of funds when you need them.

NTUC Fairprice Plus (link)

The Fairpriceplus is by far my personal favourite. If you currently have trouble maintaining the $500 limit most bank accounts required, and do not need to write checks, this account would be suitable for you.

– Requires no minimum balance
– ATM linked to a Debit/Credit card provided
– Cheque deposit box available for depositing pay cheques
– 0.5%/1.0% interest on balance
– Earn Linkpoints at NTUC and various merchants
– No counter services available

Banking services for Fairpriceplus is provided via OCBC.

Do note that Fairpriceplus will be dropping its interest rate to 0.5% for balances below $50k, as of March 2009. However, they still offer the highest interest rates in all categories.

Standard Chartered e$aver (link)

Standard Chartered was the first bank in Singapore to offer the concept of the high interest savings account. The reason they are able to do that is because it is a no-frills bank account. This means that counter services are not available, and since no ATM card is issued, this bank account is solely virtual, and requires no minimum balance. However, transferring your funds to and from this account is simple, as you can link it to your current bank account.

– Requires no minimum balance
– NO ATM card/passbook/cheques
– Only accessible if linked to another bank account

Standard Chartered use to offer the highest interest rates. It has since undergone several rates revision, and with it’s latest revision, it’s interest rate of 1.2% has been reduced to 0.8% 0.78% 0.5% 0.4% for amounts below $5k.

e$avers used to be my preferred account for savings, but with the revision, it makes more sense to hold a Fairpriceplus account instead, since it offers 1% and has a higher interest rate and all the necessities of functioning as a primary bank account.

Note that e$avers does have a Bonus Rate of 2.00% promo for accounts opened by end of march, but bonus interest is for a limited period only.

Which bank account do you have?
** Figures have been updated to reflect change in bank interest rates. (26Mar08)
** Figures have been updated to reflect change in bank interest rates. (12Feb08)
** Figures have been updated to reflect change in bank interest rates. (4Feb08)
** Figures have been updated to reflect change in bank interest rates. (24Jul08)
** Figures have been updated to reflect change in bank interest rates. (4Aug08)
** Figures have been updated to reflect change in bank interest rates. (20Oct08)
** Figures have been updated to reflect change in bank interest rates. (12Feb09)
** Figures have been updated to reflect change in bank interest rates. (16Feb09)

Check out The Banks’ Historical Interest Rates to see how interest rates have changed through the months.

20th October 2008
Monthly Savings Plan

It seems from the comments below, that some readers are more interested in Monthly Savings Plans, and how their interest rates fair. OCBC and POSB both have such plans.

Here are their rates:

For the moment, OCBC Monthly Savings Plans are the way to go. But if you are a POSB customer and prefer to keep it all with one bank, 0.45% is still higher than the conventional bank interest rate.

20th October 2008
Fixed Deposit “war”

With the stock market swinging more down than up recently, and banks having liquidity, people are finding safer havens for their money, and banks are looking to get more people to put money with them. Thus, the “Fixed Deposit war”. Banks have been offering higher than normal FD interests for periods as short as 3 months.

If you do not mind locking your money up for some time in return for much higher returns compared to the above mentioned stuff, check out the current fixed deposit rates at various banks, and see if there’s one that fits your tastes. Whatever you do, please do read the fine print.

Check out this blog* which tracks current promotions pertaining to Fixed Deposits.

*disclaimer: singapore watch is not related to singapore fixed deposits blog, and will not be held responsible for any content on their site.