Digital Bank Comparison: Trustbank vs GXS

You’ve probably heard about the new digital banks Trustbank and GXS by now. With no minimum balance requirement and competitive interest rates, they are really gaining some traction.

Today, I’d like to go over the specifics of both banks so that we can determine whether you should switch to one of them and, if so, which one is superior. Alternatively, you may wait for Maribank (By SEA Ltd).

What are Digital Banks?

To begin, perhaps for the sake of completeness, let us define digital banks. Simply put, they are similar to traditional local banks but lack physical branches. This allows such banks to save on overhead costs, which they might pass on to customers through higher interest rates.

At the moment, two digital full bank licenses have been granted. One goes to Singtel and Grab (GXS), while the other goes to Sea Limited (Maribank).

Trustbank, which is supported by Standard Chartered and FairPrice Group, was not a contender for a digital bank license. Instead, it relies on a Standard Charted full banking license, which provides them far more flexibility in its offerings.

Trustbank

Let us begin with Trustbank, which I believe had a rather successful debut. Trustbank is backed by Standard Chartered and FairPrice Group.

At launch, Trust offerings include a credit card, savings account, and family personal accident insurance. This is in addition to the loyalty program that is integrated into the FairPrice Group ecosystem. Trust also has supplementary offers through collaborations with businesses like KFC, Starbucks, Viu, and Caltex.

As noted by a reader, the post has been amended to distinguish between NTUC Union members and FairPrice members. Note: To be eligible for FairPrice membership, you must first be a member of the NTUC union and purchase 20 FairPrice shares at $1 each.

Trustbank Savings Account

	Interest (Up to 1.4% p.a.)
Base rate	1% p.a. (up to S$50,000) 0.05%p.a. (any amount above S$50,000)
+Bonus (Make 5 purchases within the month)	0.2% p.a. (Non-NTUC Union Members) 0.4% p.a. (NTUC Union Members)

Earning 1% each year would be really easy, and I believe getting an extra 0.2% or 0.4%, depending on whether you are an NTUC Union member, would be equally simple. Furthermore, this interest rate is accrued every day and credited at the end of the month.

Other features of this savings account include:

• No Lock in period
• No Monthly fee
• No Minimum balance
• No Account closure fee
• No Foreign transaction fee
• No Card replacement fee
• No Fall below Fee

The drawback, like with any digital bank, would be the limited avenue to withdraw your cash. The good thing about Trustbank however is that you could at least tap on Standard Chartered Bank ATM located at Bedok Mall, Bugis Junction, Vivocity, Sixth Avenue, Clementi Mall, NEX Serangoon, Serangoon Garden, Marin Parade, Changi Business Park, Tampines, Marina Bay Financial Centre and Battery Road.

Thoughts

With interest rates ranging from 1% to 1.40%, I would say Trust bank interest rates are good but not particularly appealing. With the current high interest rate environment, most banks are already giving similar rates for their savings accounts. If you prefer a somewhat higher percentage, there are alternative options, such as Singlife, which offers 1.5% (for the first $10,000) with no loopholes.

Overall, I believe Trustbank savings accounts are excellent as a secondary account, especially if you have extra cash but don’t know where to park it. Okay, if you have a lot of excess money, you should first consider parking in Singapore Savings Bonds, which has a much greater interest rate.

That said, can its credit and debit card rewards make it more appealing? Continue reading on.

Credit and Debit Card

On top of the savings accounts, Trust bank has also introduced credit and debit cards. Over here, I’ll go over each one individually to explain how you can maximise your earnings. It may be repetitive, so just go to the cards you are planning to get.

• Credit Card (NTUC Union Member)
• Debit Card (NTUC Union Member)
• Credit Card (Non-NTUC Union Member)
• Debit Card (Non-NTUC Union Member)

*Please keep in mind that there are fundamentally two types of cards. Non-NTUC Union members will use the Trust Link card, while NTUC Union members will use the NTUC Link card (exclusively for NTUC Union Members). These two cards would function as both a debit and credit card (Assuming you apply for both). You can control it by going to your app and toggling.

Other features of your cards:

• No annual fee
• No foreign transaction fee (not even 1% Visa charges)
• No cash advance fee
• No card replacement fee

Before we begin, we also need to explain linkpoints, which are essentially what you would receive as rebates. These are essentially points that you accumulate when you shop at FairPrice Group Outlets. You will receive 0.5 link points for every $1 spent. And it takes 100 linkpoints to redeem one dollar. In other words, for every $200 spent, you receive $1 in-store credit.

Credit Card (NTUC Union Member)

As a Credit Card holder with an NTUC Union membership, you would receive the highest reward of up to 21% off groceries and food at FairPrice.

2.5% base rate	Base savings of 0.5% on FPG groceries and 0.22% on all other eligible spending. If you are also a Fairprice Member (On top of your NTUC Union membership), you will also get to earn an additional 2% on FPG groceries, capped at 12,000 Linkpoints a year.
8.5% monthly bonus	Earn 8.5% on FPG spending when you meet a monthly minimum eligible spend of S$350 outside of FPG, capped at 5,500 Linkpoints.
8.0% quarterly bonus	Earn 8% on FPG spend when you meet your monthly minimum eligible spend for 3 consecutive months, capped at 7,500 Linkpoints.
2.0% FairPrice annual member bonus	Earn 2% once a year on FPG groceries, capped at 12,000 Linkpoints. (For Fairprice members only)

The offer is certainly appealing at 21%. However, keep in mind that this is a promotional deal, and Trustbank has indicated that the rate may be revised to 14% after 31 December 2022. This has surely diminished the card’s desirability. To add more cold water to the situation, I’d like to point out that the additional 2% off FPG foods and the 2% yearly member incentive are already available to all Fairprice members, so this isn’t a new perk. The monthly and quarterly bonuses of 8.5% and 8% respectively are certainly appealing, but a hard ceiling of 13,000 Linkpoints in total means your rebates are also limited.

Having said that, I still think it’s a great bargain, especially if you’re already an NTUC Union member (Best if you are already a FairPrice member). The Trustbank credit card is an excellent addition that will increase your savings when shopping at FairPrice.

Debit Card (NTUC Union Member)

When compared to a credit card, your incentives as a Debit card holder with NTUC Union membership are cut in half (promo rate). This is also less than individuals who have a credit card but do not have an NTUC Union membership (promo rate).

However, after the promotional period, the difference between a credit card holder and a debit card holder would be decreased to roughly 3% differences. So, if you can’t get a credit card, don’t think you’re missing out on much.

2.5% base rate	Base savings of 0.5% on FPG groceries and 0.22% on all other eligible spending. If you are also a Fairprice Member (On top of your NTUC Union membership), you will also get to earn an additional 2% on FPG groceries, capped at 12,000 Linkpoints a year.
3.5% monthly bonus	Earn 3.5% on FPG spending when you meet a monthly minimum eligible spend of S$200 outside of FPG, capped at 3,500 Linkpoints.
3.0% quarterly bonus	Earn 3% on FPG spend when you meet your monthly minimum eligible spend for 3 consecutive months, capped at 3,500 Linkpoints.
2.0% FairPrice annual member bonus	Earn 2% once a year on FPG groceries, capped at 12,000 Linkpoints. (For Fairprice members only)

In general, things remain the same for NTUC Union members with debit cards. If you are a Fairprice member, you continue to receive the benefits you already enjoy, such as an additional 2% off FPG groceries and a 2% yearly member bonus. What is nerfed here are the monthly and quarterly bonuses, which are lowered by 5%. The amount of link point cap is also reduced, but the good news for debit card members is that the minimum spend required outside of FPG to qualify for the bonus is reduced. Another piece of good news is that this is unlikely to be a promotional deal, as was the case with the credit card, so you are still likely to receive 11% going forward.

Nevertheless, if I am already an NTUC Union member and have access to a credit card, I would still prefer that over a debit card for a bigger rebate, especially since there are no annual fees. The only time I see the debit card as a better option is when you are likely only able to spend $200 rather than $350 outside of FPG to meet the bonus criteria.

Credit Card (Non-NTUC Union Member)

If you apply for a credit card but do not have an NTUC Union membership, your incentive is still fairly good: 15% off groceries and food at Fairprice. Similarly, this is a promotional deal that may be reduced to 8% after 31 December 2022.

0.5% base rate	Base savings of 0.5% on FPG groceries and 0.22% on all other eligible spendings. If you are also a Fairprice Member (On top of your NTUC Union membership), you will also get to earn an additional 2% on FPG groceries, capped at 12,000 Linkpoints a year.
7.5% monthly bonus	Earn 7.5% on FPG spending when you meet a monthly minimum eligible spend of S$450 outside of FPG, capped at 5,500 Linkpoints.
7.0% quarterly bonus	Earn 7% on FPG spend when you meet your monthly minimum eligible spend for 3 consecutive months, capped at 7,500 Linkpoints.
2.0% FairPrice annual member bonus	Earn 2% once a year on FPG groceries, capped at 12,000 Linkpoints. (For Fairprice members only)

When compared to the NTUC Union member credit card, the first time removed would be the benefits given to Fairprice members, which is the additional 2% off FPG groceries and a 2% annual bonus. Aside from that, the (monthly and quarterly) incentive is lowered by 1%, and you must meet a higher qualified spend of $450 outside FPG, as opposed to $350 for NTUC Union members with the credit card.

This card, I feel, is not really here or there for two reasons. There are better credit cards available, and you are not making full use of your benefits. If you frequently purchase at NTUC and want to maximise the number of linkpoints you can earn, it may be worth getting an NTUC Union membership (annual subscription of $117) since not only will you get more points, but the minimum spend you need to spend outside of FPG will be reduced. (This is especially useful if you have additional cards with which you are also attempting to meet the minimum reward criterion.)

Meanwhile, if you rarely purchase at NTUC, most of the incentives will not apply to you, which is why I believe this card is neither here nor there. Nonetheless, if you don’t spend much at NTUC and just want the various benefits Trustbank credit card gives without paying an annual fee, this card may be for you.

Debit Card (Non-NTUC Member)

Your reward as a Debit card holder without NTUC Union membership is the lowest of all, at a maximum of 5%.

0.5% base rate	Base savings of 0.5% on FPG groceries and 0.22% on all other eligible spendings. If you are also a Fairprice Member (On top of your NTUC Union membership), you will also get to earn an additional 2% on FPG groceries, capped at 12,000 Linkpoints a year.
2.5% monthly bonus	Earn 2.5% on FPG spending when you meet a monthly minimum eligible spend of S$200 outside of FPG, capped at 3,000 Linkpoints.
2.0% quarterly bonus	Earn 3% on FPG spend when you meet your monthly minimum eligible spend for 3 consecutive months, capped at 3,000 Linkpoints.
2.0% FairPrice annual member bonus	Earn 2% once a year on FPG groceries, capped at 12,000 Linkpoints. (For Fairprice members only)

Without the NTUC Union membership (More specifically, the Fairprice member), you will not enjoy the benefit that already comes with the membership, which is an additional 2% off FPG foods and a 2% yearly member bonus.

Furthermore, your monthly and quarterly bonuses would be the lowest, at 2.5% and 2 %, respectively. However, the good news for debit card holders would be a lower minimum purchase required outside of FPG ($200 instead of $350/$450) to qualify for the bonus. Another piece of good news is that this is unlikely to be a promotional deal, as was the case with the credit card, so you are still likely to receive 5% going forward.

Normally, I prefer credit cards over debit cards because they provide more deals. But in this case, I can understand how this debit card could be appealing to non-members. If you are not a member, I would guess you do not spend much money at NTUC (which is why you did not get the membership). This card is then ideal for you, especially given the lower minimum spend required outside of FPG. With that, you can focus on meeting the thresholds of other better credit/debit cards first and then do any further spending with this card to gain some extra savings.

Other Promotions

Aside from the savings you can get from purchasing at FPG, Trustbank has also teamed up with many other stores to provide you with discounts. Some deals include free Kopi/Tech with four purchases using Trust Card, a 17% upfront discount when you pump at Caltex, and a 5% discount at Gong Cha.

More partner deals can be found here. Some apply to both credit and debit cards, while others are exclusive to credit card holders.

Thoughts

Overall, I believe the trust credit and debit card is a fantastic addition to your cards, especially if you are already a frequent NTUC shopper (Plus you are a NTUC Union member). However, if you are not, this card may not be worth it because there are better cards available to maximise your cashback or miles.

However, if you are already planning to get the savings account, there is no harm in holding on to the debit card you will receive when you sign up. Occasionally there may be some offers which you can take advantage of.

Insurance

Finally, the last product, Trustbank has also introduced its insurance product during the launch. By enrolling for the trust credit card, you will receive two months of free insurance coverage covering death and permanent total disability (up to $8000). Thereafter, it will be S$0.50 each month.

That is all we have for the insurance product at the moment, but more information are on the way.

Sign up Promotions

Last but not least, we must mention the ongoing promotion, which you have most likely heard about from your friend. Trust Bank is offering a sign-up deal in which both the referrer and the referee will receive a $10 fairprice e-voucher. In addition, when you make your first card purchase, you will receive a $25 fairprice e-voucher. Easy $35.

Aside from that, if you refer someone, you will be entered to win one of three Tesla cars.

All promotions will expire on 31 December 2022.

GXS Bank

Next, we’ll look at our second digital bank. GXS is one of the digital banks that has a banking license from the Singapore Monetary Authority. It is backed by a consortium that includes Grab and Singtel.

At the moment, there isn’t much interest in this bank because joining GXS is currently by invitation only. Moving forward, the bank will gradually expand its access to more users, so for the time being, if you are interested, you can first download the GXS app on your phone and register your interest.

GXS Savings account

GXS savings account offers a base interest rate of 0.08% per year, accrued daily, as well as savings pockets with a 1.58% interest rate. For a start, the bank also does not have a minimum initial deposit or balance requirements.

	Interest
Main account (Base Interest Rate)	0.08%
Savings Pockets	1.58%

The base interest rate seems to be very low, but I believe we can disregard it because most users will simply transfer money from the main account to the savings pockets for the higher interest.

Under the Savings pockets, you can create up to 8 pockets to help you save towards your goal. According to the GXS team, there will be no lock-in period for the savings pockets. Thus, there isn’t much of a disadvantage to opting for the savings pockets over leaving them in your primary account. Withdrawals from pockets are similarly instantaneous and will be promptly transferred into your primary account, so there are no issues there.

With this rate of 1.58%, I would say it is significantly better than Trustbank’s interest rates of 1% (if you do not make 5 purchases) and 1.4% (when you make 5 purchases and you are an NTUC member). That being said, there is one disadvantage: you can only deposit a maximum of $5000. If you have more money, you will have to find another way to earn more interest.

Moving forward, GXS is likely to raise the maximum deposit amount, but it is unlikely to exceed $75,000 for the next three years because GXS is still classed as a restricted digital full bank under MAS regulation. Only when GXS is classed as a fully functional digital complete bank, which MAS anticipates within 3 to 5 years after the company’s inception, will the cap be lifted. Thinking about it, I suspect it is most likely owing to the many limitations imposed on digital banks, which has allowed Trust Bank, which is using a Standard Chartered traditional bank license, to overtake GXS and Maribank (the other digital bank by SEA Ltd which has yet to announce anything)

Thoughts

GXS appears to be aimed at Generation X, with its user interface and smart nudges designed to assist users in developing and maintaining savings habits. There aren’t many hoops to jump through in order to acquire a better interest rate.

However, don’t anticipate any better rates. According to GXS’s CEO, they would offer competitive rates rather than outrageous rates. Aside from that, the company is content with the pool of consumers it already has via Grab and Singtel, so it is unlikely to spend much money on promotions to entice customers to sign up and deposit money. (Something which Trustbank is doing.)

Trustbank vs GXS?

First of all, I believe these digital banks are better as secondary accounts rather than primary accounts because they are completely online and may not be as stable as a traditional bank. This is especially true for GXS, where one of its partners, Grab, is still a loss-making business

Between these two, which is the better one? Well, I would say there are for different purposes and as such, it depends on your situation. If you are already a Fairprice member, getting a Trustbank credit card and savings account is a no-brainer because it will allow you to increase your savings. For the rest, you might also consider signing up first and deciding afterwards since you can get $35 during this promotional period.

On the other hand, if grocery shopping at NTUC is not your thing, then GXS which offers a much higher interest rate, might be more enticing. That said, there is currently a cap of $5k, and the bank is still not open to everyone, so you will have to wait a little longer.

So which one will you pick? Or should you wait for Maribank?