Which is the best CDA account?

I gave birth to my baby girl in mid 2009 and had to decide which bank to open my Child Development Account (CDA)* with.






In Singapore, there are only 2 banks that offer CDA accounts, OCBC and Standard Chartered Bank. I did a quick comparison between the benefits provided by the two banks and came to realize that they are actually pretty similar.


To share, the following are some of the factors which I had deliberated upon.

Interest Rate on CDA Account:
- Both banks give interest of 1% [ No vote to either one]

Branches / ATMs :
- OCBC certainly has more branches and ATM than StanChart, given that it is a local banking outfit.
[To me, this factor is not important because I will not be able to withdraw cash from the CDA account anyway. Depositing cash into the account is only on very periodic basis. No vote to either one]

Exclusive Merchant Offers:
- Both banks have tie-up with selected merchants to offer discounts.
[None of the merchant discounts caught my eyes. Furthermore, I did not foresee that I will be making use of the offers as baby will mostly likely be at home in the first 6 months. So the offers are not really important to me yet. No vote to either one as well].

Free Insurance:
- StanChart offers free insurance for the parents & child. It gives S$25k in personal accident plan if maximum contribution is not reached and S$50k if maximum contribution is reached. It also provides free hospitalization cash if child is hospitalized due to Hand, Foot, Mouth Disease, up to 365 days.

- OCBC have similar free insurance, offering S$20k for death & TPD if there is contribution to the CDA account.
[One vote goes to StanChart for higher insurance coverage].

Additional Interest on Account
- OCBC offers CDA Time Deposit with minimum deposit of S$5k, for 12 months period at 1.2%.
- StanChart offer 1% p.a. for a second account for your child or family, in addition to your CDA.

[This is an important factor to me. Normal savings rate at local banks is only about 0.125%. For every $10,000 that I deposit into this designated StanChart Family account, I’ll earn an extra $87.50 per year. (Multiply that by how much you intend to maintain in the Family Account).

I would rather use the extra cash from StanChart to buy diapers for my baby than to have it deposited in local banks for the paltry 0.125% .What’s more is that there is no minimum amount to maintain the account and no tie-down period, so the funds are liquid in case I need the cash for emergency or for investment purpose.

As such, another vote goes to StanChart].

Other Perks
- StanChart also offers cash back on purchases where new card members can enjoy 20% cash back on all your retail spending for the first 2 months when you sign up for a StanChart Platinum card by 31 Dec 09.

[Those who are currently not holding StanChart card may want to consider this favorably. However, this is not important to me as I already have a SCB card and therefore, this promotion is not applicable to me.]


FINAL VERDICT
Overall, the choice is clear - Standard Chartered, notwithstanding that the interest rates might change over time.

Despite the fact that some of my friends commented that SCB’s customer service is quite bad. To me, it does not really matter as I won’t be using the counter service or telephone service frequently anyway. This is but a debit card which I’ll only be able to use rather sparingly.