[SINGAPORE] OCBC will cut interest rates for its 360 Account, in line with lower interest rate expectations.
With effect from Aug 1, the maximum interest rate of the local lender’s flagship savings account will be lowered to 5.45 per cent per annum on the first S$100,000, from the current 6.3 per cent, based on an e-mail the bank sent to customers on Friday (Jun 27).
It is the second time this year that OCBC has trimmed rates for the 360 Account.
The bank previously announced in March it would cut the maximum rate to 6.3 per cent per annum for the first S$100,000, from 7.65 per cent, on May 1.
Both OCBC and UOB have cut interest rates on their flagship savings accounts two times in a row.
The maximum interest rate of UOB’s flagship One Account was cut to 4 per cent per annum on the first S$150,000, from 5 per cent on the first S$100,000, in May 2024. Subsequently, the bank trimmed it to 3.3 per cent on the first S$150,000 from May 1, 2025.
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DBS is the only local lender that has not cut interest rates on its flagship deposits account.
The maximum rate of DBS’ flagship Multiplier savings account has remained at 4.1 per cent per annum for the first S$100,000, since it was revised up from 3.5 per cent in November 2022.
Despite inflation concerns and market volatilities driven by geopolitical tensions, analysts still expect at least two more rate cuts for the rest of 2025.
OCBC’s head of forex and rates strategy Frances Cheung and forex strategist Christopher Wong noted on Thursday that the bank’s base case is still for US rates to be cut by a total of 76 basis points by the Federal Reserve before the year ends.
Specifically, the team expects one 25 basis-point cut in the third quarter and two 25 basis-point cuts in the fourth quarter.
“This base-case represents a no-recession scenario. Triggers for rate cuts will likely need to come from the labour market or growth front. Continued cooling in the labour market will justify rates at less restrictive levels as long as there is no strong rebound in inflation,” said Cheung.
She added that the 2025 median dot on the Fed’s June summary of economic projections continues to point to two cuts (considering 25 basis points each) before end-2025. “We do however note the distribution of individual dots is very dispersed, covering scenarios of no cut, one cut, two cuts and three cuts for this year, plainly reflecting a divided FOMC (Federal Open Market Committee) amid high uncertainty in the economic outlook.”
Key risks to the rate-cut expectation stems from inflation pressure, with trade policies and geopolitics being the main swing factors, Cheung noted.
Shares of OCBC closed up 0.7 per cent or S$0.12 at S$16.35 on Friday, before the rate revision announcement.
