You have been told a lie from the start! “Save money at the banks, it is safe” We have been doing that since we were young and we did see any significant improvement in the bank account. What they do is actually use our money and lend it to other people at a higher interest rate. We got the tiny percentage of it which is about 0.05% per annum for base rate at minimum and other bonus rates which varies. Banks are going to lend it out at usually 7% Effective Interest Rate with other caveats such as late payment, repossession of your valuables etc. So you are not making as much money as you think you are, granted they have employees to pay, rent and all other stuff. However nowadays, they can actually have lesser overheads because virtual banks are in for the play as well. Here are some techniques which you can hopefully save more money however do you research and keep up with times as well.
Virtual Banks
The financial landscape is undergoing a transformative revolution, driven by the emergence of virtual banks, also known as digital banks or online only banks. Typically offer lower fees and better interest rate. This way you could have the best money saving techniques that are not provided in your traditional banks. These innovative institutions are fundamentally altering the traditional banking model, offering a seamless and accessible banking experience entirely through digital channels. Virtual banks have emerged as a compelling alternative to brick-and-mortar banks, captivating the attention of tech-savvy, saving savvy consumers and redefining the way we interact with our finances.
In contrast to traditional banks, virtual banks operate solely online, eliminating the need for physical branches. This digital approach not only streamlines operations but also translates into significant cost savings, which are passed on to customers in the form of lower fees and more competitive interest rates. Virtual banks are also known for their agility and responsiveness, constantly adapting their offerings to meet the evolving needs of their customers.
The Monetary Authority of Singapore (MAS) issued the first digital bank licenses in Singapore in 2020. As of today, there are four digital banks operating in Singapore:
GXS Bank is a joint venture between Grab and Singtel.
MariBank is a subsidiary of Sea Group, which also owns the e-commerce platform Shopee.
Trust Bank Singapore is by a unique partnership between Standard Chartered Bank and FairPrice Group
Green Link Digital Bank (GLDB) is a joint venture between Greenland Financial Holdings and Linklogis Hong Kong.
Interest Rates | Main Account 2.38% p.a Savings Pocket 2.68% p.a | Savings Account 2.88% p.a | Base interest of 1.5% p.a on first $125,000 Up to 2.5% p.a | Starting at 1.30% – 1.9% p.a for SGD Starting at 1.5% -2% p.a for USD |
If lets say you are looking into more, like business loans and bigger savings like fixed deposits and personal loans. You should look into
ANEXT Bank is a subsidiary of Ant Group, which is the fintech arm of Alibaba Group.
I. How to Choose a Virtual Bank in Singapore
When choosing a virtual bank in Singapore, it is important to consider your needs and preferences. Here are some factors to consider:
The type of account you need: Do you need a current account, savings account, or both?
The interest rates: Compare the interest rates offered by different virtual banks.
The fees: Make sure you understand the fees charged by the virtual bank.
The customer service: Check the customer service reviews of the virtual bank.
The security: Make sure the virtual bank is licensed and regulated by the MAS.
Other Financial Institution
Traditionally, banks have been the go-to destination for savings accounts. However, in recent years, a growing number of alternative financial institutions (FIs) have emerged, offering competitive interest rates, innovative features, and lower fees. While banks continue to play a significant role in the financial system, exploring these alternative options can be a wise decision for individuals seeking to maximize their savings potential.
Money Market Accounts
Money market accounts are a hybrid between savings accounts and checking accounts. They offer higher interest rates than traditional savings accounts while still providing check-writing capabilities. Money market accounts are suitable for individuals who want to earn interest on their money while still having easy access to their funds.
Phillip Securities smart park is one of them that offer this which can give you up to 3.3672% p.a based on SGD and 4.3150% p.a based on USD.
Exploring Alternative Options
When considering alternative financial institutions for your savings, it’s crucial to carefully evaluate the risks and benefits of each option.
Factors to consider include:
Interest rates: Compare interest rates offered by different institutions to find the best deals.
Fees: Be aware of any fees associated with the account, such as monthly account fees, ATM fees, or withdrawal fees.
Account features: Understand the features and restrictions of the account, such as minimum deposit requirements, withdrawal limitations, and access to additional financial services.
Reputation: Research the reputation of the financial institution to ensure its stability and trustworthiness.
Customer service: Evaluate the customer service options and reviews to ensure you have access to support when needed.
Diversifying your savings across multiple financial institutions can help mitigate risks and optimize your returns. By carefully considering the available options and making informed decisions, you can effectively utilize alternative financial institutions to achieve your savings goals.
Financial Products
To achieve financial stability and secure their future, a wide range of financial products cater to the diverse needs of savers. These products, offered by banks, insurance companies, and other financial institutions, empower individuals to manage their finances effectively, accumulate wealth, and safeguard their financial well-being.
Insurance: Savings and also a security against unforeseen circumstances
Insurance plays a crucial role in safeguarding financial security against life’s unforeseen events. Life insurance provides financial protection for loved ones in the event of the policyholder’s passing, while health insurance covers medical expenses, ensuring access to quality healthcare.
Universal life insurance:
Universal life insurance offers flexibility in premium payments and death benefit options, allowing you to tailor the policy to your specific needs. It also accumulates cash value that can be accessed through loans or withdrawals. Similar to whole life insurance, universal life insurance can provide financial protection and wealth accumulation opportunities.
Singlife offers this which is great as you can withdraw the money at any moment of time. Some other apps life Etiqa Gigantiq and Singtel Dash PET would be a place you could consider too.
Endowment plans:
Endowment plans are insurance policies that provide a lump sum payout upon maturity or in the event of the policyholder’s death. They also typically accumulate cash value over time, which can be accessed through loans or withdrawals. The cash value can serve as a source of funds for future goals or emergencies. However these types of plans are not exactly liquid, in terms of withdrawing money at anytime. You should take that into account as well.
Trading and Investment Platforms
Investment: Riding the market
While savings accounts and fixed deposits provide stability, investment products offer the potential for higher returns. Unit trusts and exchange-traded funds (ETFs) allow individuals to invest in diversified portfolios of stocks, bonds, or other assets, enabling them to participate in market growth and potentially achieve higher returns.
Robo-Advisors:
Robo-advisors are automated investment platforms that provide personalized investment advice and portfolio management services. They use algorithms to analyze your risk tolerance, investment goals, and financial situation to create a tailored investment portfolio.
Cryptocurrency: Emerging Investment with High Volatility
Cryptocurrencies, such as Bitcoin and Ethereum, have emerged as a controversial yet potentially lucrative investment option. While they offer the potential for high returns, cryptocurrencies are highly volatile and carry significant risks, making them suitable for only experienced and risk-tolerant investors. Be really careful and proceed with caution.
Trading: Forex, Stocks, Options and CFDs
While trading might be a risky thing to do by yourself, it can actually benefit you because you will actually do the study, assessment whether using technical or fundamental analysis and then you can do a swing or a day trade. Which is profitable if you are right. Only trade with the money that you can afford to lose. Set your stop loss and take profit, it is the only way to be discipline.
Become The Bank: Invest In Private Debt
Peer-to-Peer (P2P) Lending: Diversifying Investments with Higher Potential Returns
Peer-to-peer (P2P) lending platforms offer an alternative investment option, allowing individuals to lend money directly to other individuals, potentially earning higher returns than traditional investments. However, P2P lending carries higher risks, requiring careful evaluation of borrowers.
Platform | Interest rates | Fees | Minimum investment |
6% to 14% | 1% to 2% | $100 | |
8% | $50 per year | – | |
| Shareable Asset | Depends on investment | management fees listed prior to investment | $100 |
5.26% to 11.69% | depending on investment | – |
Conclusion
That is why you need to keep up with all these new advances that you can actually make use for your save money techniques because it is not taught in school. Learn with us by using financial tools that have been created for you. More coming your way from Moneytalktips. Advertisement that you see on social media can actually be an advantage to you since they are showing you these good stuff. Plus if not that, normal people like us on the internet are sharing these to you so that you are well informed.
Pick only the ones that you are comfortable with, as we know the older generation will stick to traditional banks due to safety but with governing authority nowadays, we are pretty much save with the new one that comes up. Always do your due diligence.
