First job? | Savings Bank Account for adequate Savings | Banks in Singapore

Savings Accounts | Singapore

First Job: Be ‘Financially’ Set!

There is no bigger happiness when your phone beeps and reads – Salary credited. All of us love this message over any other message. Now that you have joined the workforce, you need to be responsible for your money also. As youngsters, you like to spend on shopping, entertainment and dining out etc. but you need to be careful as this may deplete your funds. For this, you need to have proper savings accounts in which salary is credited. This account may be used for your expenses, utility bills, outings, shopping etc. whereas some funds you can earmark for savings. For this, you need to open a separate account for parking your funds with the aim of long-term saving.

Expenditure vis-à-vis Savings

You could choose to follow the 50/30/20 plan – 50% to fixed costs such as bills and basic living expenses, 30% to lifestyle spending such as entertainment and eating out; and 20% to your financial goals such as your grand scheme to get married or pursue higher studies. This is a broad outline; you can adjust it according to your requirements. When it comes to savings, you need to have a separate account for the same so that money doesn’t get spent where it is not supposed to be. The talk of bank account is not complete without mention of the interest that you earn. Singapore banks offer interest rates but these are with certain caveats.

 Begin Savings 

As an important measure, you need to check the difference between benchmark rates and offered rates. What are the transactional criteria that you need meet for being eligible? These may vary from bank to bank in Singapore like transaction of higher amounts, higher amount balance, higher credit card spent or any other. In this scenario, you would be able to earn somewhere around 3.88%.

But as you have just entered the workforce, you would not be able to achieve this benchmark interest rate. The best thing would be to look for means which can let you know what actual interest you would earn with your kind of earning. Banks have a rate of interest calculators on their website where you can calculate how much rate of interest you are eligible for as a newbie. Besides, you should identify a long-term goal for yourself like buying a home or your wedding and start building an emergency fund from day one. If you have good resistance power then you can open this account in the same bank. But if get succumbed to peer pressure and love to spend, then you should open this account in a different bank. As you would be busy with your jobs, hence it would be difficult to rush to withdraw cash from ATMs. The best banks with the widest ATM networks in Singapore are, of 3 local banks: DBS, OCBC and UOB. However, Citibank has a good presence at many MRT stations these days.

If you have identified your goals, then it would be easier to put your plans to work with the right savings account.

Savings Bank Accounts for you to consider:

• DBS Multiplier savings account: There is no minimum amount required in each category, as long as your total transaction is above $2,000.
• OCBC 360 savings account: Crediting salary of at least $2,000 by GIRO gives you 1.2% p.a. and spending at least $500 on OCBC credit cards gives you an additional 0.3%.
• UOB ONE savings account: If your take-home pay is under $2,000, the UOB One still gives you a decent 1.5% interest on your savings if you spend $500 on your credit card.
• POSB SAYE account: the new Standard Chartered JumpStart account, which is open only to younger people and offers up to an attractive 2% p.a. in interest.
• CIMB FastSaver or UOB Stash account: Either one will give you 0.8% to 1% p.a. in interest, depending on how much money you put in it, in case you are older for above accounts.

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