All Singaporeans love free things. Who wouldn't want to travel around the world for free using air miles? If you have been keeping up with the news online or if you flipped old-school newspapers in print, you may have come across this enticing new product from UOB and Singapore Airlines, better known as the KrisFlyer UOB account and KrisFlyer UOB debit card.

Basically, the KrisFlyer UOB account is the latest savings account from UOB. As its name suggests, it is a tie-up between Singapore Airlines and UOB, and this savings account showers you with KrisFlyer miles as you save and spend using the linked KrisFlyer UOB debit card. The KrisFlyer UOB debit card also gives cardholders travel-related privileges on Tigerair and Scoot, the two sister budget airlines under the wings of parent company Singapore Airlines.

Before you get lured into moving your money into this account and cutting up your credit cards hastily, you need to know that the grass isn't necessarily greener on the other side. Let's cut the chase and dive right into it. Below, we at GET.com share with you three important things you ought to know about this new banking product, especially if you are already 90% sold.

3 Crucial Things To Know About The New KrisFlyer UOB Account

1. A Cap Actually Exists On How Many Bonus Miles You Can Earn

This is how you can earn KrisFlyer miles. Image source: UOB

Although the spanking new KrisFlyer UOB account provides a pretty attractive proposition towards helping account holders earn KrisFlyer miles for spending and saving at first glance, the key to getting the most mileage here lies in the amount of money that you have in your account balance.

In order to start earning miles, you need to spend at least $500 on your KrisFlyer UOB debit card in a month. At only 0.4 KrisFlyer miles per $1 spent, this base-miles earning rate isn't that generous to begin with. You are also required to maintain a minimum deposit of $3,000 in your account to earn bonus miles.

Any bonus KrisFlyer miles earned per $1 spent (refer to image above) is subject to a cap of 5% of the monthly average balance in your KrisFlyer UOB account. This is a complete game changer because you'll only get to benefit from potentially earning a lot more bonus KrisFlyer miles if you maintain a considerably fat monthly-average balance month after month.

In simpler terms, just know that the larger the deposit you have in your account, the more bonus KrisFlyer miles you stand to earn, potentially.

Here's a simple illustration to make things a little clearer for you:

If you maintain $10,000 as your monthly average balance and spend $500 a month, you'll earn 200 base miles (0.4 mile*$500) and 500 bonus miles (1 mile*$500). However, if you spend say $1,000 a month, you'll earn 400 base miles and still only 500 bonus miles because of the 5% cap placed on your monthly average balance (5% of 10,000= 500).

2. You Don't Earn Interest On Your Deposits

While the KrisFlyer UOB account is essentially a savings account, it is not your regular savings account where you get to earn interest on your account balance unlike other savings accounts that come with debit cards.

Although some consumers might be okay with not earning interest on their deposits, those who put in sizeable sums of money in the KrisFlyer UOB account stand to lose a lot in the long run, especially when you take into account compound interest.

3. KrisFlyer Miles Expire

Before you get all excited about accumulating air miles for free travel, there are things you need to know about KrisFlyer miles if you want to play your game right.

One important thing that UOB and Singapore Airlines haven't mentioned in their ads and press releases is the fact that your KrisFlyer miles expire 3 years from the month in which they are posted into your KrisFlyer account.

What Are Our Thoughts?

A debit card has its merits and is great for people who have trouble keeping themselves away from accumulating credit card debt. A debit card like the said KrisFlyer UOB debit card can also be useful for people who are simply too afraid to own a credit card despite the fact that credit cards can help you save money if used responsibly and correctly.

If you want to get more for your money, you are probably better off racking up miles at a faster rate using the right air miles credit cards (read here: how to pick the right travel credit card) and at the same time, earn interest on your deposits in a savings account or alternative investment.

Besides, the majority of air miles credit cards reward cardholders based on the amount and type of spend on the card. Some credit cards give you miles or reward points that don't expire while most travel credit cards also come packed with attractive perks and travel benefits such as free airport lounge access and free travel insurance.

Credit CardFeaturesIntro Interest p.a.Standard Interest p.a.Annual FeeMinimum IncomeWe least likeRelated links
The American Express<sup>®</sup> Singapore Airlines KrisFlyer Credit Card

The American Express® Singapore Airlines KrisFlyer Credit Card

APPLY NOWAt American Express' secure website
  • Spend S$5,000 in first 3 months of Card approval and receive 8000 miles.
APPLY NOWAt American Express' secure website
24.99% per annum$176.55 (waived 1 year)$30,000 for Singapore Citizens and Permanent Residents ($60,000 for expatriates)

Case in point, The American Express® Singapore Airlines KrisFlyer Credit Card lets you earn KrisFlyer miles on eligible purchases which are credited directly into your KrisFlyer account for free.

While not the highest rewards rate, every SGD$1 spent on eligible purchases will earn you 1.1 KrisFlyer miles, no minimum spend required, unlike the 0.4 base miles you'll earn from the KrisFlyer UOB debit card, provided that you meet the minimum spend of $500 in a calendar month in addition to putting at least $3,000 in deposits in the KrisFlyer UOB account.

Additionally, even if you earn Amex Membership Rewards points from other American Express credit cards that you hold, you can also redeem Amex Membership Rewards points for KrisFlyer miles if you want to.

Credit CardFeaturesIntro Interest p.a.Standard Interest p.a.Annual FeeMinimum IncomeWe least likeRelated links
Citi PremierMiles Card

Citi PremierMiles Card

APPLY NOWAt Citibank's secure website
  • Earn up to 37,300 miles when you apply for a Citi PremierMiles Card and spend S$9,000 within 3 months from date of card approval. Valid till 30 June 2020. Terms and conditions apply.
APPLY NOWAt Citibank's secure website
Transfer your outstanding balances on any other bank's credit card or credit line to Citibank at 0% nominal interest rate for 3/6/12 months with upfront service fee from 1.58%. Eligible for new Citibank customers who apply for Citibank Ready Credit account with minimum $500 loan.26% per annum$192.60 (first year annual fee waiver)S$30,000 for Singaporean, Singapore PR; and S$42,000 for Foreigners

Want another example? Citi PremierMiles Card lets you earn 1.2 Citi miles for every $1 spent locally and 2 Citi miles for every $1 spent in foreign currency. You can also earn up to 10 Citi miles for every SGD$1 you spend on online travel bookings. Citi miles do not expire and here's how you can redeem Citi miles for KrisFlyer miles.