OCBC to let Singapore savings accounts hold ringgit from Oct 23
Customers can keep up to RM50,000 and earn interest of 1 per cent a year until Jun 30 next year, then 0.5 per cent, with no minimum balance, the bank said.
OCBC will let Singapore-based personal savings accounts hold Malaysian ringgit from Oct 23, the bank said on Wednesday (Oct 21).
Up to RM50,000, with interest
Customers will be able to keep up to RM50,000 (US$12,000 or S$15,700) in the account and earn interest on the balance. The account carries no requirement to maintain a minimum amount. According to OCBC, the interest rate is 1 per cent a year until Jun 30 next year, then 0.5 per cent a year after that. Cash held in e-wallets, the bank pointed out, earns no interest.
The option is open to holders of the OCBC Global Savings Account or the Premier Global Savings Account, who can swap Singapore dollars for ringgit. According to OCBC, customers will get a competitive exchange rate, and the conversion will carry neither foreign currency transaction charges nor steep mark-ups.
Once converted, the ringgit can be spent with OCBC debit cards or taken out at ATMs in Malaysia.
First among non-Malaysian banks
CNA reported that no other bank outside Malaysia has previously offered ringgit holdings in a Singapore-based savings account, which would make OCBC the first. Fintech firms such as YouTrip and Wise already let customers hold ringgit in their multi-currency e-wallets.
OCBC said: "As (Malaysian ringgit) is a tightly controlled non-internationalised currency, opportunities for individuals to hold the currency in bank accounts outside Malaysia are limited."
Customers are becoming more attuned to how currencies move, the bank said, and they purchase foreign exchange once the Singapore dollar gains strength. The bank cited figures indicating that when the Japanese currency lost value, consumers accumulated yen holdings. The bank further observed that cross-border travel and consumer spending in Malaysia are expected to get a further boost from the Johor Bahru-Singapore Rapid Transit System (RTS) Link, which is on the way.
Many Singaporeans already travel to Malaysia often for work and leisure, according to Tan Siew Lee, who heads group wealth management. "Singaporeans are savvy and rate-conscious. They keep a close eye on FX (foreign exchange) because they want to get the most value from every dollar they exchange," she said.
"A small difference in exchange rates may seem insignificant, but over dozens of trips and years of spending, the savings can add up quickly," Ms Tan added.
