Grab-Singtel digital bank to launch savings account offering daily interest on Sept 5

SINGAPORE – Singapore’s digital retail banking scene is set to sizzle as players fight to roll out their offerings with GXS Bank firing the first salvo.

Backed by Grab and Singtel, the digital bank, which is allowed to serve retail and corporate clients, on Wednesday unveiled its first financial product – the GXS Savings Account.

To encourage users to save, it will not require a minimum sum as traditional lenders do and will offer an interest to be earned daily.

Interest will be credited to the account with every one cent earned.

For a start, GXS Bank customers can deposit up to only $5,000 into the savings account and earn daily interest of 0.08 per cent per annum. 

Traditional lenders’ savings accounts typically give out interest on a monthly or quarterly basis, usually only at the end of the month.

If a customer wants to save up for specific purposes such as for studies or a vacation, they can create up to eight savings pockets under the GXS account. Each pocket fund can earn daily interest of up to 1.58 per cent per annum. 

In recent months, local banks have raised interests rates to woo customers on the back of a rising rate environment, with OCBC Bank the latest lender to do so.

“There are high headline rates for a lot of banking accounts but to achieve that, you need to spend on credit cards, buy their insurance products, you need to have a payroll account. We do not have such conditions,” said GXS chief executive Charles Wong.

Speaking at a briefing, he added that the digital bank will calibrate the conditions, including the cap on deposits, based on customers’ behaviour and demand.

Mr Wong said the bank aims to support the needs of entrepreneurs, gig economy workers and first jobbers.

“Over the coming months, we will also tackle other obstacles that hinder consumers and small businesses from reaching their goals sooner, such as growing their wealth or accessing credit,” he said.

While local lenders can offer high interest rates, “if I cannot withdraw my money, my pain point is cashflow”, Mr Wong said. “So, solving customers’ pain points and making sense to them is critical.”