POSB
has just recently launched a new cashback programme called POSB Cashback Bonus.
It claims that “it’s cashback with more kick. POSB Cashback Bonus gives you up
to S$130 a month, for the banking that you do.”
Ok
so let’s see how do you get that “up to S$130” a month? So I went to POSB’s
Cashback Bonus’s landing page for that. How it works according to the page:
Well,
sounds good. But which three among these five should I choose? How exactly do I
calculate that? There are no mentions of any percentage or methodology of how
you get to that desired cashback?
Ok,
so there is a calculator. “Use our Calculator to uncover how much you can earn.”
You
can plug in various numbers and it will tell you how much cashback you will
earn. But it still doesn’t tell you how it get to those numbers.
So
I went on to check the FAQs. And then the full terms and conditions. STILL
NOTHING. There are no mentions of what are the percentages of rebate for each
category. Of course I know I can reverse engineer by using the calculator, but then this kind of defeats the purpose right?
From the full TnCs: “We
will accord you the Cashback based on your Eligible Transactions in each calendar
month, subject to the applicable minimum transaction amount (if any) and
monthly Cashback cap (“Cashback Cap”). Details of the Cashback rate, minimum amount
requirements and Cashback Cap will be published on our website, which we may
revise from time to time at our discretion and without prior notice.”
Yeah,
at your discretion and of which I can’t find. (Would be glad for anyone to
actually point out that I am wrong in this.)
Now
that is really bugging me.
Lack of transparency
If
this isn’t a POSB page, I would be saying “RUN!! RUN!! RUN!!!” My red flags are
all raised here. Always be aware of investment plans or financials schemes that
promise you “up to whatever whatever” but never tell you exactly how you can
get that.
To me, that’s not transparent at all, probably deceitful and borderline dishonest. Hey that’s just my personal opinion. But my rule of thumb to myself is to be aware and beware of schemes that sound overpromising because they usually are.
To me, that’s not transparent at all, probably deceitful and borderline dishonest. Hey that’s just my personal opinion. But my rule of thumb to myself is to be aware and beware of schemes that sound overpromising because they usually are.
Now to be clear I am not saying that this is a scam. Because it’s POSB. But still,
I am pretty disappointed.
Now
to be clear that I am not targeting POSB unfairly, let’s check OCBC’s 360 account and UOB’s One account. As you can see, the percentage of rebates for
each category is clearly stated.
So, I can easily compare it with other products and choose one that is the best
suited for me. Transparency wise, OCBC 1, UOB 1, POSB 0.
Well,
the only reason I can think of for you to hide your exact cashback percentages
is because it is nowhere near as good as your competitors.
Well,
I can also refer to Mothership’s article on this cashback programme, and since Mothership’s
article was paid and sponsored by POSB, so I can only
assume that the math is correct.
Here are the two examples provided by Mothership:
Scenario A: Early-Career Individual
Salary
Credit: $3,000
Credit
Card Spend: $1,000
Home
Loan Instalments: $1,000
Insurance:
$300
Investments:
$300
Total
Cashback: $9 + $3 + $30 + $9 + $9 = $60 / month = $720 / year
Scenario
B: Mid-Career Individual
Salary
Credit: $6,500
Credit
Card Spend: $2,500
Home
Loan Instalments: $1,000
Insurance:
$500
Investments:
$1,000
Total
Cashback: $19.50 + $7.50 + $30 + $15 + $30 = $102 / month = $1,224 / year
In both cases, it seems like the rebate percentages (for now?) are:
Salary
Credit: 0.3% (cap at $20, meaning take home pay of $6,666.67)
Credit
Card Spend: 0.3% (cap at $20, meaning credit card spend of $6,666.67)
Home
Loan Instalments: 3% (cap at $30, meaning monthly instalments of $1,000.00)
Insurance:
3% (cap at $30, meaning monthly insurance payment of $1,000.00)
Investments:
3% (cap at $30, meaning monthly investment amount of $1,000.00)
Ok this is simply lame
1) POSB’s salary crediting require minimum of
$2,500 and cashback rate is 0.3%. OCBC’s salary crediting minimum if $2,000 and
gives you 1.2%. So POSB has a higher requirement and yet only gives a quarter
of the rebates? And you still need to do another two things before you get this 0.3%? Yawn.
2) OCBC offers 0.5% while POSB’s only 0.3%. But
OCBC has a minimum spend requirement of $500 per month, while POSB’s minimum
spend on the credit card is <unknown value>, so this is probably good for those who aren't in a habit of spending at least $500 on their credit card.
3) Ok, getting 3% back from your monthly home loan
instalments does seem like a good deal. But, it probably only makes sense if
you have already getting your mortgage through DBS/POSB. For those who already
have a home loan with other banks, you will have to calculate the difference in
interest rates that you already have vs what DBS/POSB can give you, then the
potential savings you might get from this cashback programme by switching to
DBS/POSB, and also the cost required in switching / refinancing your home loan.
Oh, and did I mention, they may have the discretion to change that cashback
percentage anytime they want? So your true savings by moving your mortgage to
them is most likely nowhere near 3%.
4) Pay your POSB/DBS insurance premiums and you get
3% cashback. But the catch is that it will only be recognised on the first 12
months of your purchase. And it is only valid for new plans purchased after
signing up for the POSB Cashback Bonus,
not existing insurance plans. First of all, I personally would not advise my
friends to purchase insurance through banks. The best is still to purchase
insurance through a financial advisor that you are sure you can trust, or
purchase term insurance through a DIY platform. And, are you likely to purchase
a new insurance plan each year? Otherwise, not quite realistic to make this one
of the three items you need to maintain in order to enjoy the cashback.
5) Invest through POSB/DBS and you get 3% cashback.
Same as point 4 above. Your investment amount will only be recognised on the
first 12 months. Your existing investments don’t count – only new ones do. Are
you going to buy a new investment plan through POSB each year? Well, at least
for me, I don’t think I will be able to do this either. Also, within the
choices available, I would perhaps only be attracted to POSB Invest-Saver,
which allows me to buy into the Nikko AM Singapore STI ETF (SGX:G3B) or ABF SingaporeBond Index Fund (SGX:A35); but I will not be interested in buying a new mutual fund
through its Unit Trust Regular Savings Plan every year.
Personally I already maintain a POSB Invest Saver plan with them but hey, this is not eligible! Since it is existing and not new. Ouch!
OCBC only gives you 1% for items (4) and (5) for 12 months, but at least it isn't conditional upon that for you to enjoy cashbacks from other categories. That is an important distinction to remember.
So, how am I going to pick three out of these five
categories in order to enjoy “up to $130” cashback each month? Well, you tell
me.