When GXS Bank first launched in Singapore, it had limited appeal due to its $5,000 deposit cap and exclusivity to selected customers. However, things have changed since then, as GXS has opened up the GXS Savings Account to new customers, allowing more people to benefit from its offerings.
Now, with an increased maximum deposit of S$75,000 per account, the GXS Savings Account has become a more attractive option. With the revised deposit cap, is it worth switching over?
In this comprehensive review, we will explore why GXS Bank is gaining popularity and why you should consider switching to the GXS Savings Account.
Table of Contents
What is GXS Bank?
GXS Bank is a digital bank jointly owned by Grab Holdings Inc. and Singtel. In case you’re still wondering, this explains its name GXS (or Grab x Singtel). It obtained a full banking license from the Monetary Authority of Singapore (MAS) in December 2020. While initially, the savings account was restricted to selected Grab and Singtel customers, it is now open to all eligible individuals in Singapore.
What is the GXS Savings Account?
Last year, GXS Bank introduced its savings account to the market. However, due to a regulatory cap of $50 million on retail deposits imposed by MAS during the lender’s first two years of operation to protect consumers’ interests, the bank had to limit its services to selected Grab and Singtel customers, with a maximum deposit limit of $5,000 per user.
At present, the GXS Savings Account offers an attractive interest rate of 3.48% per annum on its “Savings Pockets” feature. The interest is credited daily, ensuring faster compounding and more substantial returns. Moreover, there’s no need to worry about losing interest if you need to withdraw your savings. Like all other banks, there may be potential for the interest rate to decrease in the future especially if the Fed begins to reduce its interest rate hikes. There is an extremely low switching cost and I don’t see why anyone would refuse to take advantage of the lucrative rates available now.
Looking ahead, GXS Bank has exciting plans in store. They are set to launch a debit card that offers rewards and cashback to incentivize customers to spend through their savings account.
Additionally, users who spend with GXS on Grab and Singtel (including Singtel Dash) will also earn bonus points. Although specific details on GXS Bank’s reward program remain limited at this point, the prospect of earning extra benefits for managing finances through their platform is undoubtedly enticing.
Key Features of GXS Bank:
1. High-Interest Rates
GXS Bank offers an attractive interest rate of 3.48% per annum on its savings accounts through “Savings Pockets.” The interest is credited daily, allowing for faster compounding. I would say this is one of the core benefits of the GXS Savings Account as interest compounded daily can put a little more money in our pockets. If you’re still unsure, find out the benefits of compounding interest in Singapore.
Also, with the daily interest, this means that you do not have to worry about losing out on the interest if you need to withdraw your savings at any point in time.
If you put S$75,000 in your Savings Pockets, you will earn an interest of S$2,655 per year, or about S$7.15 per day!
If you put S$25,000 in your Savings Pockets, you will earn an interest of S$885 per year, of S$2.38 per day!
However, do take note that you will only be earning 0.08% p.a. On your savings if you leave your money in the main account.
2. No Minimum Balance & Lock-in Period
Unlike many other banks, GXS Bank does not require a minimum account balance nor lock-in period, making it accessible to everyone, regardless of their savings amount. This also gives the individual the flexibility to withdraw their funds whenever needed without penalties.
3. No Hoops to Jump Through, No Complexity
There are no complex requirements to earn higher interest, such as salary crediting, GIRO arrangements, bill payments, or credit card spending. My current favourite is the UOB One high interest savings account. However, it does have quite a lot of complex requirements as compared to the GXS Savings Account.
4. No Tiered Interest
One of the standout features of the GXS Savings Account is its straightforward approach to interest calculation, as it does not employ tiered interest levels like many traditional banks. This is a significant advantage for account holders, offering greater transparency and simplicity in understanding how their interest is calculated.
In traditional banking systems, tiered interest rates mean that different portions of your savings receive varying interest rates depending on the amount deposited. Generally, the higher the balance, the higher the interest rate applied to that portion of the savings. However, this can become quite complex and may result in account holders receiving lower interest rates on larger portions of their savings, even if the overall balance is substantial.
With GXS Bank’s no tiered interest approach, account holders can enjoy a uniform interest rate on their entire savings balance, from the first dollar to the last. This means that no matter how much you save, every dollar in your account earns the same competitive interest rate of 3.48% per annum.
What users may not like about GXS
1. Account limit of S$75,000
At the moment, the GXS Savings account has a maximum deposit of S$75,000 per account.
Consequently, if you have savings exceeding this amount, you will only benefit from the attractive interest rate of 3.48% per annum on the first $75,000 of deposits.
For individuals that have larger savings, it may not be the best option due to the account limit.
2. Limited functions and benefit
Being a recently established digital bank, GXS currently offers customers relatively limited functions.
For instance, ATM deposits and withdrawals for your savings account in Singapore are not supported. Additionally, setting up GIRO arrangements to facilitate automatic bill payments from your account is not available at this time.
It’s essential to be aware of these limitations while considering GXS Bank for your banking needs. Although I am sure that they will be launching new benefits and functions soon to catch up with the competition such as debit cards etc.
3. Lack of referral program
Many traditional and digital banks offer additional perks and sign-up benefits such as cash bonus, technology goods to reward users. However, as of 19th July 2023, GXS Bank does not have any referral code or ongoing promotion available.
The absence of a GXS referral code offering sign-up benefits removes the incentive for people to open an account solely to receive attractive rewards.
How does the interest rate for GXS Savings Account compare to other instruments?
The 3.48% p.a. interest credited daily by GXS Bank is truly a game-changer.
If compared to other digital banks, GXS Savings Account 3.48% p.a. Interest rate surpasses its competitor Trust Bank’s rates of 2% p.a. for non-union members and 2.5% p.a. For union members. Compared between the two, GXS is no doubt the obvious winner.
Additionally, compared to fixed deposits, GXS Bank’s 3.48% p.a. interest rate, with no lock-up period, outperforms other fixed deposits that currently offer rates ranging from 2.9% to 3.88%, often with minimum sums and lock-in periods.
If we consider MAS T-bills, the latest offering came with a 3.85% p.a. interest rate for a 6-month tenure. However, for those who missed that opportunity or prefer more flexibility with their funds, GXS Bank’s 3.48% p.a. becomes a highly attractive option.
Curious about how the interest rate on the GXS Savings Account stacks up against other banks in Singapore?
|Savings Account||Realistic interest rate (p.a.) for S$75k of deposits with no hoops|
|GXS Savings Account (Savings Pockets)||3.48%|
|CIMB FastSaver (existing customers)||2.50%|
|Standard Chartered JumpStart||1.35%|
While CIMB FastSaver account does offer a 3.50% per annum interest rate for new customers who sign up before 31st July 2023. However, it’s important to note that this promotion is exclusively for new customers, and the 3.50% interest rate will only apply for the first six months after opening the account.
For those seeking a hassle-free savings account with S$75,000 of savings, the GXS Savings Account stands out with one of the highest interest rates available. However, do take note that the realistic interest rate in the table excludes hoops and traditional banks could potentially offer a high interest with simple hoops such as the UOB One Account.
My Verdict on GXS Savings Account
With its attractive 3.48% p.a. interest rate and hassle-free experience, GXS Bank emerges as an excellent choice, particularly for fresh graduates and young working adults. It proves to be a suitable option, especially for those who struggle to meet minimum spend requirements on credit cards.
Moreover, GXS Bank offers a perfect solution for parking short-term emergency funds (e.g., 3-6 months) without compromising on interest. Even for those with investment plans in stocks or options, GXS Bank’s savings account can serve as a reliable investment war-chest, ready to seize opportunities in the market.
While GXS Bank currently has limited functions, it has exciting plans in the pipeline to expand its offerings. In the near future, GXS Bank is set to release new features, including a debit card with rewards and cashback benefits for customers who spend via their savings account. Additionally, the bank aims to introduce more attractive rewards programs to further entice users.
Now the question is, will YOU be entrusting your money to GXS Bank? The competition is on, and it will be intriguing to witness how local banks respond to this emerging digital bank’s popularity!