Just started work? Go forth and multiply
If you're excited about getting your first salary and how far it will take you…well, here's what we have to say about it: go forth and multiply.
If you don’t know how to get started, here's 6 tips to help you start multiplying your salary.
#1: Adulting 101: Know where your money’s going
No one really likes adulting, but it is a part of growing up. Fearing that you are not maximising your salary? One of the ways to start is by saving before you spend. Try to set aside at least 10% of your salary as soon as it is credited into your bank account.
You should also set budgets and track your expenses, no matter how small. One tip to consider is that you should set a larger monthly budget as compared to your schooling days. That’s because when you're "adulting”, your expenses are likely to be higher than when you were a student. For instance, a new phone plan, increased transport costs (arising from overtime and cab fares), lunch and dinner out with your new colleagues. Perhaps you might even rent your own place.
We’ve got your back. To help you navigate these changes, we’ve developed the NAV Planner, a financial planning tool that helps you keep track of where your money’s going.
#2: Upgrade your childhood savings account
When you're venturing deeper into the world of "adulting", you're bound to transact or even invest more – you probably won't have a choice.
But you might have a choice is in the interest rates you can earn. For example, your childhood account is probably earning near-zero interest.
But if you have a DBS Multiplier account and credit your salary into any DBS or POSB account, it works extra hard in the interest department. Even if you’re a freelancer in the gig economy, you can join the higher-interest category by crediting your dividends into any DBS or POSB account. This is just the “entry pass”.
Here’s how you can get more interest by adding on one of these - credit card spend, home loan instalments, insurance payments or investments. When you do any of those, the interest rate on your account jumps…especially when your total eligible transactions pass S$2,000 per month.
The more you add on, the more interest you earn. Interest game strong.
Applying for the Multiplier is basic. Everything can be done online. You never have to visit a branch or make 1,001 declarations over your identity and what you want to achieve in life.
If you’re 29 or younger, you get even more. That’s because the “fall-below” service fee is waived for you. This feature is important because in your early years of working, there will be times you might fall short or need a little bit of extra cash. It’s frustrating – we know.
In addition, if your retail spending with PayLah! and monthly income contribution add up to S$500 or more monthly, you get to enjoy 0.55% p.a. interest rates on your first S$10,000. This comes in handy as you might not have transactions in the other categories as you get your finances sorted out in the first few months of working.
So, this is our way of recognising your life's stages and helping you along the way.
#3: Upgrade to your own credit card
You probably own a debit card. And you might have gotten a supplementary credit card from your parents when you were on your overseas exchange.
One of the most exciting #adulting things about getting your own pay is… getting your FIRST credit card.
To make the most of it, use your DBS credit card as long as you're paying for something. For one, you earn points, cashback or miles. Two, it makes it so much easier to reach the next level of monthly transactions to qualify for the next level of interest rates with the Multiplier account.
There are so many ways to do this: hotpot dinner with your squad, mom's birthday present, the monthly donation to the children's charity or even when you fill up petrol.
Meet Jack. He’s a first jobber who credits his monthly salary of S$3,500 into his DBS/POSB savings account and transacts in one category.
With Jack’s current balance of S$30,000 in his DBS Multiplier Account and a total eligible transaction of S$3,700, he qualifies for an interest of:
- 0.90% p.a. for his first S$25,000 and
- Prevailing base interest rate for the balances above S$25,000
To unlock higher interest rates he needs to transact in more categories.
For example, Jack adds on S$100 investment a month, bringing his total eligible transactions to S$3,800 a month. His interest rate increases from 0.90% to 1.30% p.a.
It doesn't stop there. If he has already decided to get a home with his partner, his interest rate would increase from 1.30% p.a. to at least 2.20% p.a. and potentially even more.
He could also open a joint account with his partner and credit their income into the joint account. This maximises both of their benefits as the Multiplier account will recognise the combined income and calculate interest based on this amount.
#4: Stay protected
You've probably heard that it's never too early to start an insurance policy. That sounds about right.
While you might only be in your 20s, this is the perfect time to choose from life or term insurance policies. That’s because you pay less premiums when you’re younger and healthier. If you decide on an Endowment policy, you reap the benefits of compound interest, and get nearer to your marriage and first home goals.
#5: Have a ‘lit’ break
You may have just started work, but it won't be long before you'll be whispering these four words: "I need a break." The struggle is real.
Have a ‘lit’ vacation by using the multi-currency feature that comes with your bank account. If you have the Multiplier account, it’s simple: lock in your preferred exchange rate, link it to a Visa debit card, and you’re set to pay like a local.
It’s super useful if you are travelling to a few countries, because there’s no need to call and brief us on your itinerary.
Pay in London and Pounds are deducted; pay in Amsterdam and Euros are deducted. The system’s smart that way.
#6: Grow with the flow
A major coming-of-age concept is when you begin investing for the long-term. A regular (monthly) savings plan is the surest, steadiest way to multiply, but there is also the option to trade stocks via your DBS Vickers account. (Your stock purchases and dividends count towards the Multiplier.)
Alternatively, using DBS Invest-Saver to trade in equities online or to contribute a lump-sum to unit-trusts qualifies you for the investment category in the months you make the purchase. The first 12 consecutive months are also recognized should you choose to make monthly contributions to your investments via DBS Invest-Saver.
Disclaimers and Important Notice
This article is meant for information only and should not be relied upon as financial advice. Before making any decision to buy, sell or hold any investment or insurance product, you should seek advice from a financial adviser regarding its suitability.
All investments come with risks and you can lose money on your investment. Invest only if you understand and can monitor your investment. Diversify your investments and avoid investing a large portion of your money in a single product issuer.
Deposit Insurance Scheme
Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Monies and deposits denominated in Singapore dollars under the CPF Investment Scheme and CPF Retirement Sum Scheme are aggregated and separately insured up to S$75,000 for each depositor per Scheme member. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.