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Anonymous

Asked on 02 Jul 2020

Should I forego the investment category for DBS Multiplier account?

Hi, I’m currently DCA $300 monthly into StashAway and planning to DCA into Syfe REIT as well. Currently I’m hitting 2% p.a for my DBS multiplier account with transactions in 2 category (credit card + rsp into sti etf). As the investment category only is eligible for 12 months, I was thinking to RSP into NikkoAM REIT ETF for the investment category.

However, with the changes to the multiplier account interest, should I ignore the investment category and invest into Syfe REIT instead?

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Hi anon,

If what you are doing is currently in line with your objectives (i.e. DCA SA/Syfe is what you had wanted to do, bonus interest or not) then treat the extra bonus interest as just that, a bonus. You won't get much anyway and it is not something that will make or break your retirement etc.

The 'ingenious' thing about such eco systems is that you can already tell the bonus interest is not forever. You'll might be invited to drop by the bank to hear about other options to continue enjoying your bonus interest once the 12 month period ends, which might end up with you getting something else that you actually don't need.

There are definitely better options than the STI ETF, and investing in the STI ETF for a mere few dollars extra a month while forgoing better returns in other markets isn't really how anyone should invest. Personally I prefer just a no-frills account where I get bonus interest for salary crediting and that's it. I won't want to be under any pressure to maximize the theoretical highest possible interest.

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I strongly believe you shouldn't be investing for the sake of some bonus interest on cash holdings.

Investment is about risk, portfolio, and asset allocation.

Jumping around different funds every 12 months, taking on investment risk, for like a few hundred dollars extra at max, is ridiculous, sorry.

Recognise that the bank wants you to spend and become more entrenched in their eco system when you really don't have to. We've seen that overnight, future interest can be taken away.

Invest in something because it adds to your portfolio or is part of an overall plan of money management.

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