5 Kinds of Savings Accounts That each Singaporean Must have

Since young, most of us would curently have a savings account. Our parents may have helped us open our first account, where we deposited savings we have. As we become older, our parents may do bank transfers for the allowance each month before we withdraw it via an ATM.

Once we start work, it's easy and convenient for all of us to carry on up with the same savings account we have used since young. However, sticking to only one checking account isn't a good idea. That is because once we become older and undertake more financial responsibilities, we should also have multiple savings account to assist us better manage our savings and cashflow.

In this short article, we will highlight 5 various kinds of savings accounts that Singaporeans should have after they start working.

# 1 Day-To-Day Transactional Savings Account

The very first thing you need to get is a high-interest, day-to-day transactional savings account which can help you earn high interest with minimal inconvenience. Such an account may be used to receive your monthly salary, pay your credit cards or other kinds of bills and to make ATM withdrawals from.

Your emergency savings of ideally between 6-9 months of monthly expenses ought to be kept here.

It makes financial sense to maintain your emergency savings within this account because you wish to maximise the interests that you earn from this checking account. Traditionally, the most popular high-interest transactional savings accounts that you could get in Singapore includes the OCBC 360 Account, UOB One Account, BOC SmartSaver, Standard Chartered Bonus$aver Account and the DBS Multiplier Account.

To earn high bonus interest, many of these savings accounts would need you to fulfil certain criteria every month. They may include:

• Crediting of monthly salary through GIRO
• Hitting a minimum monthly spend via credit cards issued by the bank
• Paying of bills online via the savings account
• Invest or insure with similar bank

Understandably so, these savings accounts would need you to fulfil some of their criteria prior to the banks reward you using the attractive bonus interest.

While this can be a little annoying sometimes, the factors are not hard to fulfil and most working adults will already need to do them anyway (e.g. receive our monthly salary via GIRO, spending on our credit cards, paying the bills online).

# 2 Joint Savings Account

After getting married and achieving a family group to run, you and your spouse will discover yourself using a much more bills to pay. These would come with your home mortgage, utility bill, telecommunication bill, groceries, petrol and dining expenses.

To take into account these household expenses, some couples would opt to possess a joint savings account.

You can make this joint checking account legally – which means that the joint account has both your names on it, or just from the conceptual point of view – meaning you simply make use of a personal checking account but to designate it for joint/household expenses.

Since most joint savings accounts in Singapore do not give you much benefits, it may be better to simply designate one of the high-interest savings accounts to be your 'joint account'.

If you and your spouse are already crediting your monthly salary for your personal day-to-day transactional checking account, then you may be thinking about a high-interest checking account that does not need you to credit your salary.

One such checking account you think of may be the UOB One Account. To qualify for the bonus interest about this savings account, you need to achieve a minimum spend of at least $500 in your UOB One Card and/or other selected UOB cards. After you have done that, you'd have met the very first criteria for bonus interest.

In to generate the second tranche of bonus interest, you've two options.

Option A: Pay three bills monthly via GIRO

or

Option B: Credit your salary (minimum $2,000) via GIRO

If option B isn't feasible, option A constitutes a large amount of sense since some pot account would probably be used to pay multiple monthly household bills anyway (e.g. your charge card spend, your utility bills, your telco bill). Simultaneously, you get to earn bonus interest around the savings in this 'joint account'.

# 3 Checking account For Investment

When you are looking at investing, among the simple things that many people avoid but which they really should, is to set aside a checking account just to manage their investment funds. This would be money which is put aside for investment or reinvestment purposes.

For example, if you purchase a stock that pays you dividend, you need to request for the dividends to be credited automatically for this investment checking account that you have. This way, you'd know that the funds out of this savings account were generated by your investment returns, and you reinvest them into the financial markets, rather than unknowingly spending it elsewhere. Proceeds for stocks or bonds you have sold ought to be credited into this checking account.

Typically, any kind of savings accounts would work along with a good investment savings account. Having said that, you will find advantages to utilizing a savings account with a bank that you intend to or are already using for the investments.

For example, if you plan to use the OCBC Blue-Chip Investment Plan (BCIP) or even the DBS Invest-Saver, then it is sensible to use an OCBC or DBS checking account.

# 4 Transitionary Savings Account

Not to become wrongly identified as an investment checking account, a transitory checking account could be regarded as a savings account that you employ to get large sums of money that you simply are holding to have an interim period, prior to the money is transferred or deployed elsewhere.

For example, let's say you sell your home for $1 million and therefore are looking to purchase another apartment Six months later, you want your funds to be deposited into a savings account that pays you decent interest, without any cap.

One such checking account which makes sense is the CIMB FastSaver Account.

If you've $1 million, you'll earn an interest of $3,362.50 over a period of 6-months. This really is additional appeal to you shouldn't be saying no to, simply because you do not deposit large sum of money into the right savings account.

Besides selling a house, other occasions in which you may wish to make use of a transitory savings account to deposit your funds is when an insurance coverage payout is made to you, when an endowment plan or bond which you have bought matures or even whenever you receive your year-end bonus.

# 5 A Multi-Currency Savings Account

In our global world today where many people are used to buying items from overseas e-commerce websites, or could find ourselves regularly travelling to different countries, it seems sensible to possess a checking account that allows us to hold foreign currencies.

Unlike a regular checking account in Singapore, which only accepts and holds deposits in Singapore Dollar (SGD), a multi-currency account allows you to hold multiple foreign currency as well as the SGD in a single account. This allows customers to create overseas transactions in foreign currencies from their bank account without incurring additional foreign currency conversion fees, which is typically charged when you use a credit card overseas (e.g. Dynamic Currency Conversion fees and banks' FX admin fees which ranges from 2.5% up to 15%).

An example of a multi-currency account may be the DBS Multi-Currency Account (MCA). DBS MCA allows account holders to gain access to up to 12 widely-used foreign currencies such as the Australian Dollar, the Euro, the Hong Kong Dollar, the Thai Baht and of course the united states Dollar.

Consider Opening Checking account With various Banks

Since the Singapore Deposit Insurance Corporation (SDIC) protects your interest to as much as $75,000 per bank, one simple hack you can use would be to open savings accounts that you need with various banks. For instance, you can consider obtaining the following.

The list above is just an illustration of the items you can (and should) do. By opening a savings account with different banks, you'll be able to maximise the quantity of coverage that you receive from SDIC (5 X $75,000 = $375,000). This isn't to say that Singapore banks aren't safe (they are!) but our point is that since coverage you get is per bank per person, it makes sense to use different banks.