4 types of savings accounts Singaporeans should consider opening

4 types of savings accounts Singaporeans should consider opening
PHOTO: MoneySmart

When it comes to savings accounts, we've all had this experience at least once in our lives-you're stuck in the interminable queue at the POSB/DBS ATM machine.

Meanwhile, your friend decides to screw it, skips over to the UOB machine, in front of which there is no queue, and happily withdraws cash in two seconds.

But that's not the only advantage of having more than one savings account. Here are four types of accounts you might want to consider opening:

An account for your everyday spending

Other than the danger of your home burning down, there is one good reason to keep your day-to-day expenses in the bank instead of under a mattress in your bedroom.

Having your money in the bank enables you to withdraw as much cash as you need as and when you need it. You can thus get away with carrying very small amounts of cash on you at any given time.

The key factor to look out for when picking an account for everyday spending is availability of ATM machines. While POSB and DBS tend to have the most ATM machines, queues also tend to be very long.

That's why some Singaporeans prefer to open one other account, usually UOB or OCBC, in addition to their POSB and DBS account.

Don't worry too much about interest when picking this account. If you're using it mainly to store your monthly expenses, the amount of interest you'd earn would be negligible no matter what.

This is also the account you want to link your credit cards to if you are paying them by GIRO each month.

High interest savings account for long-term savings

No matter how much of a minimalist you are, you should have at least one other account-a high interest savings account for your long-term savings.

As the savings accounts you use for your daily needs is likely to offer truly dismal interest rates in the range of a pathetic 0.05 per cent, you will want to pick one that offers better interest rates in which you store a hopefully large and growing sum of cash.

Here are the best high interest savings accounts of 2017 that will stop your cash savings from getting eroded (as much) over time.

Joint account with your spouse or family

Unless you fancy poring over your account statements every month to try to figure out who spent/contributed what, it's always a good idea to keep any joint savings and expenses in a separate account.

To maximise cashback and air miles earnings, you can apply for your jointly-used credit card/supplementary card to be linked to this account for GIRO payment as well.

For instance, if you and your spouse share the cost of groceries, link the credit card that you use for groceries-preferably one that offers cashback for grocery spending, like the Citibank SMRT Card- to your joint account for GIRO bill payment.

This is also the account you will want to use for payment of big joint expenses like home loans, or petrol and maintenance for your shared car.

An account for your long-term goals

If you are the disciplined type who monitors your net worth like a hawk, you probably do not need a separate account for long-term goals.

But those who lack the motivation to save might want to consider keeping their goal-related money separate. For instance, if you are saving up to buy a home, keep the cash for the downpayment in a separate account.

As your goal is likely to be many years away and you are probably looking at amassing a considerable sum of cash, pick a high-interest savings account to maximise your savings.

How many savings accounts do you have? Tell us in the comments!

You can easily find out more details on savings accounts in Singapore with at MoneySmart's Savings Account comparison page.

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