Digital banks have sprung up in Singapore with the likes of GXS and Trust Bank, which offer no minimum balance and attractive interest rates that accrue daily.
Talk about compound interest!
But what exactly are digital banks? Should you open an account with one?
Read on to find out!
TL;DR: Best Digital Bank Accounts (2024)
| Account | GXS Savings Account | Trust Bank Savings Account | Mari Savings Account |
|---|---|---|---|
| Base interest rate (p.a., accrued daily) | 2.38% for deposits up to $75k | 1.50% for deposits up to $125k
0.05% for deposits above $125k |
2.88% till 31 March 2024 for deposits up to $75k
2.50% thereafter |
| Bonus interest (p.a., accrued daily) | Get up to 2.68% for saving money in GXS Saving Pockets (up to 8) | Additional 0.5% (with 5 eligible purchases on the Trust Link card on deposits up to $125k)
Additional 1% (with 5 eligible purchases on the NTUC Link card on deposits up to $125k) Additional 0.5% when you maintain min. $100K Average Daily Balance (ADB) for the month on deposit balance up to $500K. |
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Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised financial advice. Readers should always do their own due diligence and consider their financial goals before committing to any financial product.
What is a Digital Bank? Digital Banks vs Traditional Banks
You might be wondering…
What exactly is a digital bank? Don’t traditional banks like DBS already offer digital banking?
Simply put, digital banks offer the same kind of banking services as traditional banks, except that they operate entirely online. This means there are no physical bank branches, and all your regular bank services will only be available through your smartphone or smart device.
Some services such as GIRO and cashing in cheques are unavailable.
On the bright side, there are perks that come with digital banks such as the absence of pesky fees (fall-below fees or monthly fees). Moreover, they often offer attractive interest rates with little to no conditions (minimum salary crediting for example).
Retail Vs. Wholesale Vs. Full Digital Bank Licenses
Now, when we talk about digital banks, there are two classifications – digital full banks and digital wholesale banks.
For the uninitiated, digital full banks are able to take deposits from retail customers, while digital wholesale banks will generally cater to SMEs and other non-retail segments.
In December 2020, the MAS issued two players a digital full bank license to the GXS Bank (by Grab & Singtel) and the MariBank (by Sea Group).
Singapore’s other digital banks – Anext Bank and Green Link Digital Bank – are wholesale banks that can serve micro, small and medium-sized enterprises and non-retail clients.
On the other hand, there is also Trust Bank, which is another digital bank and operates online only.
However, it possesses a full banking license which allows it to operate similarly to conventional financial institutions. It is supported by two prominent entities, Standard Chartered Bank and FairPrice Group.
Are Digital Banks Safe?
Digital banks also have the same deposit protection as traditional banks as they are part of the Singapore Deposit Insurance Corporation’s (SDIC) Deposit Insurance (DI) Scheme.
All full banks and finance companies in Singapore are members of the DI Scheme, except those exempted by the MAS.
Under the DI Scheme, if any member bank or finance company fails, all of your insured deposits with that member are aggregated and insured up to $75,000 by the SDIC.
As your insured deposits are covered under the DI Scheme, SDIC will pay you the insured amounts in the event that a digital bank fails.
The digital banks listed in this article have met all relevant prudential requirements and licensing preconditions before MAS grants them their respective banking licences.
The applications were assessed based on the following:
- The value proposition of the business model, incorporating innovative use of technology to serve customer needs and reach under-served segments;
- Capacity to run a responsible and long-lasting digital banking business;
- Reviews of the business plans and assumptions underpinning their financial projections arising from the impact of COVID-19;
- Expected to establish that they will be profitable based on a five-year financial projection, according to criteria from MAS;
- Growth prospects and other contributions to Singapore’s financial centre.
In other words, your deposits are safe with digital banks as they are meant to be long-term businesses.
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Trust Bank
First, let’s talk about Trust Bank, a digital bank backed by Standard Chartered and FairPrice Group.
The Trust Bank Savings Account lets you earn up to 3 per cent p.a., alongside a popular overseas spending card, the NTUC/Trust Link Card.
Everything related to Trust Bank is managed in the “Trust App”, which can be downloaded from the Google Play Store and Apple App Store.
Trust Bank Savings Account Interest Rates
| Trust Bank Savings Account | |
|---|---|
| Base interest rate (p.a., accrued daily) | 1.50% for deposits up to $125k
0.05% for deposits above $125k |
| Bonus interest (p.a., accrued daily) | Additional 0.5% to 1.0% (with 5 eligible purchases on the Trust card as a non-NTUC Union Member on deposits up to $125k)
Additional 1% (with 5 eligible purchases on the Trust card as an NTUC Union Member on deposits up to $125k) Additional 0.5% when you maintain min. $100K Average Daily Balance (ADB) for the month on deposit balance up to $500K. |
The interest in your Trust Savings Account is accrued daily and credited at the end of the month.
Trust Bank Savings Account Key Information
Eligibility: Singapore citizen, Singapore permanent resident or foreigner; and 18 years old and above
Minimum initial deposit: None
Minimum monthly balance: None
Maximum deposit amount: N.A.
Ability to use FAST and Paynow: Yes
Ability to withdraw cash: Yes. From Trust / Standard Chartered Bank (SCB)’s ATM located across the island as well as overseas ATM with Visa enabled.
Trust Bank Cards
Trust Bank offers two cards: the Trust Link card (for everyone) and the NTUC Link card (exclusively for NTUC Union members).
The cards are VISA Signature cards that offer dual functionality as credit and debit cards. They come with no annual fees or foreign transaction fees.
Aside from that, the main selling point of these cards is that they are used to earn NTUC Linkpoints, which grants you up to 21% savings so long as you hit the required minimum spending.
Trust Bank Referral Promo
From now till 29 Feb 2024:
- Get $10 FairPrice Group E-Voucher upon successful sign up with use of referral code.
- S$25 FairPrice Group E-Voucher will be issued upon first Trust credit card spend or a single deposit of a minimum of $500 into your Trust savings account, within 90 days of approval of your first Trust credit card or first Trust savings account respectively.
GXS Bank
Founded by Grab and Singtel, GXS Bank is one of the first two digital banks to be serving retail customers.
Recently, GXS has rolled out the GXS Debit Card, which is a welcome addition to its banking ecosystem.
GXS Savings Account Interest Rates
GXS Savings Account has a simple 2.38 per cent p.a. base interest rate accrued daily on deposits up to $75,000.
But if you transfer your money into the GXS Saving Pockets, this interest is increased to 2.68 per cent p.a.
GXS Savings Account Key Information
Eligibility: Singapore citizen, Singapore permanent resident; and 16 years old and above
Minimum initial deposit: None
Maximum deposit amount: $75,000
GXS Saving Pockets
Aside from the main savings account, you can set your money aside in eight pockets to help you get into the habit of saving.
These pockets are great as you can personalise them to help you visualise your goals better, all while earning 2.68 per cent p.a. on each pocket. If you’re concerned about being locked in, don’t worry as you can instantly transfer money out from one pocket to your main account, which you can then transfer out.
Pro tip: Keep all your money in pockets for the extra interest and transfer it to your main account when you need to spend. A slight hassle for an extra 0.3 per cent p.a.
Open GXS Savings Account
Due to the popularity of GXS when it first opened, all GXS Savings Account slots are now full. For early access to new slots, register via the GXS app!
MariBank
Launched by Sea Group, Maribank is the latest digital bank to hit our shores. Like GXS with the Grab ecosystem, Maribank will greatly benefit those within the Shopee ecosystem.
Maribank Savings Account Interest Rates
MariBank has extended the Mari Savings Account interest rate promotion of 2.88 per cent p.a. till 31 Mar 2024.
The base interest rate would be 2.50 per cent p.a. otherwise.
The interest is accrued daily and calculated based on the previous day’s balance.
Maribank Savings Account Key Information
Eligibility: Singapore citizen, Singapore permanent resident; and 18 years old and above
Minimum initial deposit: None
Maximum deposit amount: $75,000
Ability to use FAST and Paynow: Yes
Mari Savings Account users may also opt to top up your ShopeePay balance.
Maribank Sign Up Promo
Maribank has some pretty enticing sign up promotions if you are a frequent shopper on Shopee. Here are the existing promotions:
Exclusively for new users
- Sign up and get a S$10 Shopee voucher with no minimum spend when you enter a promo code found on MariBank’s socials. Promo valid for a limited time only.
For new MariBank users, get 88% upsized cashback voucher
- 88% Shopee Cashback voucher with no minimum spend, capped at 500 Shopee coins. Promo valid from 15 Jan – 14 Feb 2024.
Other exciting cashback vouchers
- 20% Shopee Cashback voucher with no minimum spend, capped at 500 Shopee coins.
- $3 off Shopee Cashback voucher, with minimum spend of $20. Promo valid from 1 Jan – 31 Jan 2024.
You can register for a MariBank account using a valid Singapore mobile number and open a savings account using Singpass Myinfo.
Should You Consider Opening an Account with a Digital Bank?
If you own a savings account with a traditional bank
The first thing most of us would look at is the interest rates offered. Digital banks currently offer 2.5 to 3 per cent p.a.. For comparison, here are the realistic interest rates that banks are offering based on our criteria:
Realistic interest rates are based on a minimum account balance of $10,000, $2,000 in salary credited into the savings account, a minimum of $500 card spent a month and paying at least three bills.
| Savings Account | Interest Earned (p.a.) |
|---|---|
| Bank of China SmartSaver | 3.50% |
| CIMB FastSaver | 1.50% (3.5% for new customers for 6 months) |
| DBS Multiplier | 1.80% |
| Hong Leong iSavings | 0.88% |
| Maybank Save Up | 1.25% |
| OCBC 360 | 2.65% |
| RHB High Yield Savings Plus Account | 1.50% |
| SCB JumpStart* | 2.00% |
| SCB Bonus$aver | 1.63% (4.13% if salary credit is $3,000 & above) |
| UOB One | 3.85% |
All digital banks offer pretty competitive interest rates compared to the realistic interest rates that Seedly has set out.
Personally, I believe that digital banks are great secondary savings accounts that you can take advantage of.
Why secondary?
Firstly, digital banks are completely online, which is a double-edged sword.
While you can enjoy lower or no fees for using their services, it also means that they are more susceptible to technological issues or cyber-attacks.
There are also other pros and cons that you need to take note of:
| Pros | Cons |
|---|---|
| Interest accrued daily (i.e. interest compounds faster than traditional banks that credits interest monthly) | No physical bank branches. |
| Little to no fees compared to traditional banks | Limited number of ATMs and CDMs. |
| No minimum monthly balance! | Services are maintained online and hence more susceptible to technological issues. |
| 24/7 helplines and support services | |
| More efficient and flexible than traditional banks due to use of technology |
After all, it’s not a good idea to put all your eggs into one basket.
If you do not own a savings account with a traditional bank
For those of us who are unbanked or are unable to qualify for traditional savings accounts, digital banks are a life-saver as you can now enjoy the perks of banking to grow your savings, maximise your spending with credit cards (responsibly) and take advantage of other financial products available!
If you are an NTUC Union member or shop at Fairprice frequently
For NTUC Union members who have been using the OCBC NTUC Plus! Visa Credit Card, applying for the NTUC Link Card is a no-brainer if you want to continue earning Linkpoints and saving when you shop at FairPrice Group (aka NTUC grocery stores and Cheers).
For non-union members who shop at Fairprice, applying for the Trust Link Card is a great option to help you save too.