Saving tips number 2

Hi Everyone!

Previously I have talked about some saving tips that you can adopt by saving $700 per month with the standard interest rate of 0.05% which is quite little to be honest. So if you are able to regulate yourself to save a certain amount of money in the bank monthly, you can apply for saving account which will bring in more interest as company to day to day bank account.

So you must be thinking what is the difference between a normal bank account and a saving account? The difference is that for saving account, you must deposit a sum of money per month in order for it to work. For example, $50 per month must be deposit in OCBC bank account in order for it to work. Whereas for normal bank account, there is no such requirement.

There are a few banks which offer this kind of saving account plan

- CIMB StarSaver: 0.8% pa and more flexible in that you can withdraw anytime. 
- OCBC Monthly Savings Account: 0.4% pa for monthly amount at least $50
- DBS/POSB MySavings Account or eMySavings: 0.2% pa+ for monthly amount at least $300


         

It really depend on which bank you want basically, go for the bank with highest interest rate and also the one which is more convenient for you. 

So lets say if we take the previous example that I have in my previous post - Small tips on saving plan, we save $700 per month and we take OCBC bank (Since I am using OCBC bank for now)

700 * 12 = $8400 Per year * 1.004 = 8433.60
(8433.60 + 8400) *1.0005 =  16900.9344
(16900.9344 + 8400) * 1.0005 = 25402.1381376
(25402.1381376 + 8400) * 1.0005 = 33937.3466901504
(33937.3466901504 + 8400) * 1.0005 = 42506.70

For 5 years, you can save over $42000 and with an extra of $506.70 earn through interest rate. This may be small, but the calculation is based on per year instead of per month, which means it can be even more than $506.70. 

Just did a simple calculation for CIMB Star Saver, for the same amount of savings, I can earn a interest of $1018.82! (more than 2 times the interest rate as compared to OCBC)

So is your choice to see which bank provides you a better interest rate to earn money

Certainly, this is just one of the ways to make sure that you save in order to earn the additional interest.