SINGAPORE: OCBC customers will soon be able to hold up to RM50,000 (US$12,000 or S$15,700) in a Singapore-based personal savings account and earn interest on those cash balances, the bank said on Wednesday (Oct 21).
From Oct 23, customers who have an OCBC Global Savings Account or Premier Global Savings Account will be able to convert Singapore dollars into Malaysian ringgit.
OCBC said the exchange rate will be competitive and there will be no foreign currency transaction fees or high mark-ups. Customers can then spend the ringgit using OCBC debit cards or withdraw the currency at ATMs in Malaysia.
It will become the first non-Malaysian bank to allow customers to hold ringgit in a Singapore-based savings account, following in the footsteps of fintech companies such as YouTrip and Wise that also allow ringgit to be held in their multi-currency e-wallets.
"As (Malaysian ringgit) is a tightly controlled non-internationalised currency, opportunities for individuals to hold the currency in bank accounts outside Malaysia are limited," said OCBC.
An internationalised currency refers to a currency that is widely used outside of its own borders, such as the US dollar.
OCBC said customers can earn 1 per cent interest per annum until Jun 30 next year, and 0.5 per cent per annum thereafter, noting that e-wallets do not pay interest on cash balances. No minimum balance is required.
The bank said customers are increasingly conscious of currency movements and buy foreign exchange when the Singapore dollar strengthens, citing data that showed consumers built up yen balances when the Japanese currency weakened.
OCBC also noted that the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link is expected to further drive cross-border travel and consumer spending in Malaysia.
Head of group wealth management Tan Siew Lee said many Singaporeans already make frequent trips to Malaysia for work and leisure.
"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.