Saving account is the most common form of saving. Most if not all has at least one saving account with a bank in Singapore.

A lot of people assume the interest rate of saving account is too insignificant and choose to ignore it. Indeed, most major banks in Singapore offered similar interest rate for same category of saving account. In this case, we are referring to statement saving account with ATM card, which is one of the most common saving account right now. Here is the deposit interest rate from DBS.

Most people cannot get more then 0.125% interest rate. Today, we shall examine the alternative.

NTUC Thrift Flexi-Save Account offering great 0.25% p.a flat rate but I afraid they have no ATM card for you. The saver is the FairPrice Plus Savings Account who dished out a generous 1% p.a. Best still, there is no monthly minimum balance requirement to impose fall-below fee.

The FairPrice Plus is a collaboration between NTUC FairPrice and OCBC Bank. The banking services are provided by OCBC. The saving account comes with a standard monthly statement and an ATM card. The catch of higher interest rate is that we will not have the privilege to do transaction over the service counter in bank branches. Their call centre operates from 9am - 10pm only to answer enquiry and banking services.

I am not sure how these limitations will affect you. However, I personally have not carried out transaction over the counter since I can deposit and withdrawn cash over the machine. I am not interested to pay for the branches rental fee, counter staff remuneration, renovation cost etc with my saving interest. I am not interested to make enquiry in wee hours also. Nonetheless, their phone banking and internet banking still operate 24-hour a day.

The interest rate of 1% p.a. is about 4 times of what we usually get. Their ATM card is similar to the one issued by OCBC, thus can use OCBC network of ATM and cash deposit machine without charges. The first 2 cash withdrawal from UOB ATM on the same month is free of charge also but cost 30 cents subsequently. This is a very good deal.

I would like to deposit the salary and bulk of cash saving into FairPrice Plus Savings Account to earn 4 times higher interest rate. At the same time, make a GIRO arrangement to transfer a fixed amount to another saving account with DBS/POSB to take advantage of their wider coverage of ATM network. The deposit amount in DBS/POSB shall be smaller and earmarked for day to day expenses purpose. This will act as another safe guard to monitor our own budget.

Important Disclaimer

If you find yourself being unable to keep enough saving every month despite trying hard to curb spending, then regular saving plan is suitable for you.

Regular saving plan is typically a saving plan to deposit a fixed monthly amount into a bank saving account. In return for your disciplined saving, the bank award you with higher interest rate then the normal saving account. Vice versa, the bank will probably reduce the interest paid to penalize you for early withdrawal.

Regular saving plan is not going to make you rich but it is to help you to save a portion of your hard earned income before you spend it all. The accumulated cash is very handy to provide liquidity in case of emergency.

To start a regular saving plan, the following steps are to be followed:

1. Decide the monthly minimum saving amount

2. Find the most competitive interest rate

3. Open a regular saving account!

1. Decide the monthly minimum saving amount

Monthly regular saving plan is not a one off lump sump saving plan. Instead, it supposes to stretch through relatively long terms, and that include some specified months when the expenditures usually shot up. E.g.: festive season. Therefore, be reasonable to gauge your own financial position and do not overstretch. Start it with a small amount and you can always start another new saving plan in future when the situation improves.

2. Find the most competitive package

There are a number of regular saving plan offered by banks and none of them is identical. The interest rate is slightly difference due to various reasons. Therefore, do you home work to find a package suitable to you plan.

POSB/DBS – MySavings Account
Link:

http://www.dbs.com/posb/deposit/msa/Pages/default.aspx

• Interest rate varies from 0.45% to 1.5% (or 1.3% to 1.6% for Treasures Preferential Customer)
• No fixed tenorMinimum $50 to Maximum $3,000

OCBC – Monthly Saving Account

Link: http://www.ocbc.com.sg/personal-banking/banking/Bnk_Dep_MSP.shtm

• Interest rate is either 1.08% (for $50 to $790 per month contribution) or 1.48% (for $800 to $5,000 per month contribution)
• Fixed tenor of 24 months
• Minimum $50 to Maximum $5,000

State Bank of India – Recurring Deposit Account

Link: http://www.sbising.com/recurring_deposit.asp

• Interest rate varies from 1% to 1.55%.
• Fixed tenor similar to fixed deposit tenor
• Minimum $50, No maximum limit
• The interest rate is same as the term deposit interest rate. However, the interest is calculated base on the total account balance instead of monthly contribution sum. Therefore for deposit amount less then $50,000, the interest rate varies from 1% to 1.35% only.
• Table here: http://www.sbising.com/interest_rates.asp

NTUC Thrift and Loan Co-operative Limited- Bonus Savers Account

Link: http://www.ntucthrift.com.sg/product.asp?id=11

• Interest rate is 1.5% and extra bonus interest of 10%, 15% and 20% on interest earned for the 1st, 2nd, 3rd and 4th anniversary years respectively.
• Fixed tenor of 4 years and only full withdrawal is allowed.
• Must be NTUC Thrift member AND a member of any NTUC affiliated union or co-operative. If you are not an existing NTUC Member, the interest earn may not help to justify the monthly membership fee of $9.
• Withdrawal is by writing in or walk in to NTUC office.
• Minimum $30 and maximum $5,000

NTUC Thrift and Loan Co-operative Limited- Saving Account

Link: http://www.ntucthrift.com.sg/product.asp?id=15

• Interest rate is 1.5%
• No fixed tenor
• Partial withdrawal is allowed.
• Membership requirement is same as Bonus Savers Account
• Minimum $20 and maximum $1,000

My Top Pick

SBI is out because I do not need a regular saving plan if I have a large chunk of cash to earn high interest rate immediately.

For NTUC member, I think the no brainer choice is NTUC Thrift’s Bonus Savers Account for their highest interest rate, even for a very small monthly saving amount as low as $30. However, there is no point to join as a member just to enjoy the package, as the extra interest earned is not enough to cover the member fee.

For none NTUC member, the offer by OCBC and DBS/POSB is comparable. OCBC is the best choice for amount below $1,500. DBS only emerge as the best choice for amount above $1,500.

Nonetheless, if you have an existing portfolio of $200,000 with DBS to receive the priviledge of treasures preferential interest rate, then the better choice in all case is only one: DBS

3. Open a regular saving account

The procedure is simple. Just remember to bring along your identity card and account number of an existing saving account for GIRO deduction. The wise choice is to schedule the deduction on the very next day of salary payment day.

Regular saving plan is the starting point of wealth accumulation.

Be Discipline, Be Patient!

P/s: If you want to know, UOB offer no regular saving plan.

Important Disclaimer

The material on this blog has no regard to the specific investment objectives, financial situation, or particular needs of any visitor. It is published solely for informational purposes and is not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments.

The author accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this material.The information contained herein has been obtained from sources I believed to be reliable but I do not make any representation or warranty nor accept any responsibility or liability as to its accuracy, completeness or correctness. Opinions and views expressed are subject to change without notice.

The author is not a certified or licensed financial advisor, planner, analyst, consultant and etc.