Is the 6.15% interest rate on Standard Chartered Bank's Privilege Saver savings account for real?

On 1st February 2023, Standard Chartered Bank revised their Privilege$aver savings account terms and conditions, touting a 6.15% interest rate for this conditional yield savings account. Out of this 6.15%, only 0.05% is guaranteed as the base interest rate. The remaining bonus rates require you to perform deposit, save, spend and invest/insure tasks. Note that the bonus rates is also only applicable to the first RM100,000 in the account. 

At 6.15%, it begs the question - is this for real? If everyone could get 6.15% on their savings account then who would still park money in fixed deposits, unit trusts, or EPF? We try to answer this exact question in this post.

Let's start of with analyzing each of these conditional bonus rates. The first one to look out for when we spot high rates being promised is to check for product bundling (cross-selling). Bundled financial products, like the "FD + Insurance" or "FD + Investment" bundles, are almost never a good idea unless the product on offer happens to be exactly what you already wanted to purchase in the first place. 

In this case, you actually do need to purchase at least RM40,000 of unit trust investments or insurance premiums to qualify for the 2% bonus rate. RM40,000 is a huge sum! There are significant fees involved when purchasing such investment or insurance products, and the additional 2% rate is only valid for 3 months even if you went ahead. For most of us, that's hardly worth it. 

Excluding this investment requirement and 2% bonus rate leaves us with 4.15% p.a. as shown below: 

Now, 3 of the 4 remaining conditions imposed by SCB to qualify for these additional rates are easy, in fact they are as easy to fulfil as OCBC 360 and RHB Smart savings accounts. However, fulfilling those 3 conditions only give a total interest rate of 2.15%, which is quite inferior to OCBC's 3.1%, RHB's 3.35%, and the cash fund returns offered by TNG Go+, KDI, Versa Cash, StashAway, FSMOne, etc. whose returns ranges 3.3% to 4%.

The tricky criteria to fulfil here is the final condition - the loyalty bonus worth 2%, which gives the total of 4.15% when added to the above 2.15%. Note that this loyalty bonus is not a permanent product feature, as it is only offered between Feb'23 and Jan'24. 

To achieve 4.15% p.a. for all 12 months of the campaign, you need to have a monthly average balance (MAB) that's increasing by RM3,000 every month for the next 12 months (from Feb'23 until Jan'24). 

The concept of Incremental Average Balance (IAB) is not good for us as customers, because:

1. We need to add RM3,000 nett every month for 12 months, totaling a whopping RM36,000.
2. In effect, we need to lock our money within this account if we want to get that 2% loyalty interest.
3. If we face any emergencies and need to take money out, causing us to fail the IAB criteria, we end up not getting the bonus interest for at least 3 entire months.

Verdict - A conditional savings account that doesn't give you more flexibility than FDs, should provide superior rates to compensate you for all the conditions imposed. In this case, after all the time and effort you would need to put in every month, the 4.15% rate offered by SCB Privilege Saver still ends up being lower than a 12-month FD placed in a most other banks in Malaysia today! What's the point? Why bother? This product is definitely not recommended.