The Best Regular Saving Plan

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