My favourite top 3 savings accounts

My current favourite top three bank accounts are as follows:

1. Maybank iSavvy account
2. Fairprice Plus Savings account
3. Standard Chartered e$aver (in the process of applying)

The detailed features of each bank account can be found in the respective banks' websites but the key factor why they are my favourites is the interest rate they pay for savings accounts.

Internet banking
All three are savings accounts and are operated mainly as internet banking accounts. This means that there is no passbook or statement that will be sent to you. Instead, you need to logon to your internet banking account if you want to check your balances, transfer monies out of the account etc.

Interest rate
As at 12 July 2007, the interest rates for the respective accounts are as follows:

1) Maybank iSavvy - 1.68% for balances exceeding $5,000 and 1.98% for balances exceeding $50,000. Balances below $5,000 will be paid at prevailing lowest tier of savings rate which is currently 0.25%.

2) Fairprice Plus savings - 1% for all amounts starting from the first dollar.

3) Standard Chartered e$aver - 1.5% for balances below $50,000 and 2% for balances exceeding $50,000.

For balances between $5,000 and $50,000, Maybank iSavvy offers the best deal at 1.68% based on current available information. For balances < $5,000 Stanchart eSaver is attractive at 1.5%. Balances exceeding $50,000 can take advantage of eSaver at 2%. (Do monitor the banks websites as interest rates change at the banks' discretion). Therefore, if you are deciding purely based on interest rate, you should consider how much average balances you are likely to maintain as this will affect your decision.

Automated Teller Machine (ATM)
Of the three, Maybank's iSavvy offers ATM service but only through their own ATM network which has lesser machines compared to big three local banks (DBS, OCBC, UOB). Fairprice Plus savings account uses OCBC ATM network while Stanchart's eSaver has no ATM service. If this is important to you, you should consider if there are available ATMs near your home or workplace before deciding which one to go for. There are also charges for using other banks' ATMs in the case of Fairprice Plus savings so do check before deciding.

My assessment
The main reason why these banks are my favourites is because of interest rates. Even the lowest, i.e. Fairplus Plus savings offers 1% so I can get at least that return regardless of the amount I want to save. I have broadband internet access at home and find it quite convenient to transact my banking needs online. Transfers between my main salary crediting account (POSB) and the others can be quite easily done using internet transfers through there are daily limits. While my investible savings are also invested into equities, treasury bills and time deposits, there will still be times where I need to temporarily park my funds in savings accounts and these internet-based accounts provide a good alternative to the big three local banks traditionally savings accounts which pay very low interest rates.

If you are internet savvy, do not go to the bank counter for transactions and have one of the above banks ATMs near your home or workplace, you may want to consider opening up accounts with these as there are benefits to doing. Please do evaluate if the respect bank account is suitable for you and read the detailed fees and charges for operating, maintaining and closing such accounts.

Be well and prosper.

How to get the best interest rates for savings of S$1000

You are fresh out of National Service, polytechnic or the university.

You just secured your first job.

You are excited, exhilarated and excited on seeing that first thousand (or more) dollars in your bank account.

Returns on savings accounts and fixed deposits are low
Then, reality sets in... How do you get any decent return on your savings given that the average savings rate and even fixed deposits (time deposits) rates are at a low level of less than 1%? To makes matter worse, fixed deposit rates are usually only given for balances of at least $5,000 to at least $50,000 or even $100,000 for the higher interest rates to be available.

So what does that leave you, a young up-and-coming professional who wants to work hard, save and invest the money in relatively safe assets that generate decent returns?

The solution
Two words: Treasury Bills

My earlier post describes the detailed steps in investing in treasury bills issued by Monetary Authority of Singapore through the POEMS trading platform.

What is a treasury bill
Now what exactly is a treasury bill?

Wikipedia defines it as:

"Treasury bills (or T-bills) mature in one year or less. They are like zero-coupon bonds in that they do not pay interest prior to maturity; instead they are sold at a discount of the par value to create a positive yield to maturity. Treasury bills are considered by many to be the most risk-free investment for U.S. investors. Treasury Bills are commonly issued with maturity dates of 28 days (~1 month), 91 days (~3 months), and 182 days (~6 months). Treasury Bills are issued each Friday after weekly auctions which are held on Wednesday at about noon. Purchase orders at TreasuryDirect must be entered before 11:30 on the Monday of the auction. Mature T-bills are also redeemed on each Thursday. Banks and financial institutions, especially primary dealers, are the largest purchasers of T-Bills. They are quoted for purchase and sale in the secondary market on an annualized percentage yield to maturity, or basis. With the advent of TreasuryDirect, individuals can now purchase T-Bills online and have funds withdrawn and deposited directly to their personal bank account and earn higher interest rates on their savings."

Singapore Government issued treasury bills work the same way except that the minimum tenure is 3 months. There are also other Singapore Government Securities that even retail investors can buy from the primary dealers.

How to invest in treasury bills
Get starting with investing as little as S$1,000 into treasury bills today and get a better return on your money in your savings accounts today!

Fixed Deposits and Savings

How many of us can remember the POSB squirrel savers scheme? This was where primary school children were encouraged to save by purchasing stamps and pasting them on sheets of squirrel saver booklet. From there, we were also encouraged to open up POSB savings accounts.

I thought that was a brilliant scheme as it encouraged children to save up when young. I also recall the Standard Chartered Piggy Bank where one could deposit coins into the Piggy Bank and then periodically go and deposit those coins into our bank books. The children's passbook issued by Standard Chartered was also very colourful. I remember it contained pictures of Snow White or Dumbo the elephant. I do not have copies of those items anymore so I hope my memory serves me well! :-)

Interest rates in Singapore are at very low rates recently. I found out about qotion.com from Hardwarezone Forums and they confirmed that Maybank was offering the best deal at 2.08% (as at 23 Feb 2007) for their iSavvy internet banking savings account for balances >= $5,000. This is way ahead of the lowest at 0.125%. Do shop around for the best deals as it varies from financial institution to financial institution.

Qotion.com also does a good comparison of local fixed deposit balances as well. Using $10,000 as the amount and 3 month fixed deposits tenure, the best value for money (as at 23 Feb 2007) was Bank of India at 1.55%. If we use $25,000 as the cut-off amount and tenure of 3 months, the picture changes someone, Maybank is still offering a very aggressive 2.68% for their iSavvy Time Deposit while NTUC Thrift comes in at 1.765%.

What do we learn from all this? We need to shop around for the best bargains and the internet does help by lowering search costs. Imagine, the large disparity in fixed deposit interest rates among local banks.

Do your own homework and shop around to find the best deals because we work hard for
money, we should let our money work hard for us!


Disclaimer
All rates and information and other terms and conditions are subjected to change without prior notice, and may not necessarily reflect promotional values. They should be verified by contacting the financial institution directly prior to application. fivecentstencents.blogspot.com does not make any representations, warranties or guarantees, or completeness of the content or the services and products associated with fivecentstencents.blogspot.com. It is the user's sole responsibility to independently evaluate the accuracy, correctness or completeness of the content and the services and products associated fivecentstencents.blogspot.com.