Another Personal Finance tutorial by GenX @ http://www.GenXGenYGenZ.com
Update – added OCBC Smart Savers
Back in 2012, I published an article on Savings Accounts at my Generation X Y Z blogspot. However, that was four years ago, I guess there should have been some revisions and changes since then.
Sometime in April 2016, an iFriend messaged me via Facebook to highlight that AmBank is revising their True Savers interest rate downwards effective 1st May 2016.
Then in late April 2016, another person who is new to my blog, asked if I have an article on Junior Savings Account.
So, I thought I should update my previous article and once again present to you the Best Savings Accounts in Malaysia for 2016. Some of the contents below are copied from my previous article as I am too freaking lazy to use my brain cells to churn out completely new article.
Most of the time when I deposit my funds into Savings Accounts is because I need to park my money some place for 2 to 3 weeks. If we are not using any of our funds for 1 month or more, then it is wiser/better to deposit into Fixed Deposit and earn better interest rates. Nowadays, many people don’t have cheque books, and with online accounts, we not only can transfer funds to other banks or make payments to Telco, Utility companies, Assessment; but, we can even transfer our funds from our Savings Account to an eFD with our Apple iPad or Android Tablet while we are shitting! So convenient. Doing Telephone Banking while shitting is not so appropriate lah as the other side can figure out what you are doing with the echo in the toilet, hahaha.
Generally, the highest interest rates for Commercial Banks’ Savings Accounts are Children/Junior Savings Account. So, for those who have young children, you can use these Children Accounts to your benefit.
THE BEST SAVINGS ACCOUNTS IN MALAYSIA
First off, I will present to you the table I have prepared. The accounts presented in my table was chosen with the following considerations:
For Junior/Kids Savings Account – interest rates close to 1 month FD rate.
For Adults’ Savings Account – interest rate close to 2% or higher.
Below Table shows some of the best and highest Savings Accounts Interest Rates offered by Commercial Banks like AmBank, Hong Leong Bank, Maybank, Public Bank and OCBC Bank.
CHILDREN SAVINGS ACCOUNT
From the above table, first thing to note is when the interest is credited. The second criteria is what are the conditions for withdrawal. These two conditions are important. Why? Like I said in my introduction, the reason why I need a Savings Account is to park my funds for 2 to 3 weeks. However, for 1 month and above, better to go with Fixed Deposit.
So, with the first criteria in respect of interest credited monthly, then you would have earned interest parked in the Savings Account for less than a month and will have a little bit more pocket money to go deposit in FD or burn it away immediately.
The second criteria of how many withdrawals are allowed is extremely crucial, if the account only allows you to withdraw once a month, if you did not plan properly and did a withdrawal and then you want to do another withdrawal and you can’t, then it may be a problem for you.
It can be observed that AmGenius, Maybank Yippie and RHB Junior Savings Account are offering 3.15% interest rate p.a. credited monthly. It sure looks like they are the best; BUT all these said 3 accounts only allow you 1 withdrawal a month.
So, for me, I would go with interest credited monthly offered by either Hong Leong Bank Junior Savings Account or Public Bank Wise Savings Account. Both these accounts allow you to perform a withdrawal once a month without any penalty, i.e. you will earn the interest rate as quoted. You can do more than the allowable one FREE withdrawal, just that you need to pay RM2 per withdrawal for the second and subsequent withdrawals.
SAVINGS ACCOUNT FOR ADULTS
Most savings accounts for adults pay miserable interest rates and are based on tiers. If you refer to the table above, I only listed 3 Savings Accounts!!! I will now touch on them briefly:
Maybank 2U Savers
The Maybank 2U Savers is an Online Savings Account. Therefore, before you can even open the M2U Savers Account, you will need to open a Maybank Basic Savings Account at any Maybank branch and then only you can sign up for Maybank 2U Online Account.
With these M2U Saver accounts, you are not issued a passbook and if you go to any Maybank Branch to perform over the counter transaction (e.g. withdrawing or depositing money), a fee of RM5 may be imposed!!! However, the M2U Savers account does offer interest rate of above 2% for sum above RM2K which is among the best rates you can find for any adult savings account in Malaysia. And best of all, you can perform unlimited withdrawals (withdraw cash at ATMs or transfer fund GIRO or make online payments) without being penalized.
This M2U Savers is like what is being offered in Australia where they give pretty high interest rates for online Savings Account but will charge you fee if you perform any transactions at the counters.
So, if you you are not into current account and have more than RM2K at any one time in your present Savings Account – then it may be a good option to look into Maybank2U Savers Account:
Step 1 – Go to a Maybank Branch to open a Basic Savings Account that pays miserable interest rate (minimum amount RM20 must be maintained at all time to avoid maintenance charges, deposit lah like RM50). At the same time apply for M2U (Maybank online banking which can only be opened at MBB branch) AND get Maybank Debit Card (where there is an annual fee of RM8 and that is why you must deposit more than RM20 when you open the account).
Now it gets complicated, the Maybank Basic Savings Account has two options:
Option 1 – annual fee of RM8. Unlimited FREE over the counter transactions and first 2 GIRO transactions in a month at a fee of RM0.50 per transaction and RM2.00 from the 3rd transaction onwards.
Option 2 – no annual fee. 6 over the counter visits and ONLY 8 free ATM cash withdrawals. No fee shall be imposed for non-cash withdrawal transactions (e.g. balance inquiry or fund transfer within Maybank). First 2 GIRO transactions in a month at a fee of RM0.50 per transaction and RM2.00 from the 3rd transaction onwards.
Choose Option 2. You will see why later.
Step 2 – Once you have M2U online account THEN ONLY you can go open a Maybank2U Savers account to earn higher interest rates. Deposit all your money into this account and only transfer the amount of money you need to use to the Basic Savings Account 🙂 Now, the Maybank 2U Savers account allows you unlimited FREE ATM withdrawals. That’s why I said choose Option 2 above. Nowadays, we don’t really need to do over the counter (OTC) transactions, but if you need to, you still get 6 FREE OTC visits with Option 2.
It does looks like a lot of work, and I did say it is only worthwhile if you constantly have more than RM2K in your present Savings Account. Well, actually you need more than RM5K so that at least you can earn minimum interest of about RM5.25/month.
OCBC Starter Savings Account – Initial Deposit RM4K. Interest up to 2.9%
This account is actually pretty good as it pays you minimum 2.5% interest rate p.a. on condition that you do not make a single withdrawal. Interest is credited monthly into the account.
This account may be useful for those who need like less than 1 month period to park excess funds AND ONLY withdraw their funds early in the month only.
The good thing about OCBC Starter Savings Account is that even if you don’t deposit a sen, you sill still earn 2.5% interest rate pa. But if you do a withdrawal, the interest rate for the calendar month reduces by half. Therefore, if you want to do any withdrawal to transfer your money into FD, best to do it early in the month. But I kind of like this, say I have a FD maturing middle of the month and I only need to use this fund on the 1st week of next month, I can then park this FD money into OCBC SmartSavers account and earn 2.5% p.a. interest rate for 2 weeks 🙂
Am True Savers
You need to sign up for both Am True Transact Account and Am True Savers Account. The Am True Transact Account is like a current account but without a cheque book where you are instead issued a Debit Card.
The Am True Savers Account is an online Savings Account account.All the banks is Australia have this kind of account where you will have a Transaction Account (which pays zero interest in most cases) linked to an Online Savings Account. And since ANZ Bank owns part of AmBank (as of April 2016), I guess it is only natural that this kind of account is introduced in Malaysia.
The good thing about AmBank True Saver is that you can earn 1.8% interest rate credited monthly. The set back is you can only make 3 withdrawals a month, which is actually not too bad. And if you are thinking of signing up for AmTrue Savers, also check out AmTrue Visa credit card that earns you 3% cash back for online transactions.
UPDATE 4th May 2016 – OCBC SMART SAVERS
Initially I omitted OCBC Smart Savers from the above table because I could not locate it. But then I found that OCBC is currently having a promo until end of June 2016 for the Smart Savers Savings Account where you can get up to 3.9% p.a.
The OCBC Smart Savers Plan is good only if you do not make any withdrawals. In my previous Savings Accounts article, I have mentioned that you should not withdraw any money from the OCBC Smart Savers account towards the end of the month because then your money parked in the account would only earn you miserable 0.5% interest rate. You should only withdraw money from the OCBC Smart Savers account leaving only the minimum required balance, early in the month, best 1st or second day of the month so that you only loose a day or two in interest.
If you really have lots of money you need to park for less than a month or even for just 1 working day, go talk to your bank and ask them about REPO, Money Market or in Maybank’s case it is called Maybank Q-Cash Fund.
Below contents were first published back in March 2015 in my article titled A Little Bit Of This And A Little Bit Of This – Volume I, Chapter VIII at my Genertions X Y Z blogspot:
For those of you who wants really short term deposit, i.e. less than 1 month. Go check out Maybank Q-Cash Money Market (similar to REPO).
Fund Minimum deposit RM50K
The Fund is suitable for Qualified Investors:
who have low risk tolerance;
who seek a regular income stream from their investments;
who wish to obtain a yield exceeding the Maybank Overnight Deposit Rate; and/or
who have very high liquidity requirement.
You can set the number of days you want your money in the Money Market Fund or just let it sit there until you want to withdraw. However, the cut off time for redemption request shall be at 10.00 a.m. on a Business Day.
I have mentioned in my previous articles that I would park my funds allocated to pay my credit card bills with Maybank2U Savers and earn interest rates of more than 2%. If the fund is not needed for more than a month, then I will park it in Fixed Deposit where the minimum tenure is 1 month.
Coming back to Maybank Q-Cash, the minimum amount to be deposited is RM50K and you can even park your money there for a day or two. Like I said, Maybank Q-Cash is another alternative to park your funds short term besides Savings Account.
Now, so happen before I left for Melbourne in mid-February, I know that my Maybank credit cards’ Outstanding Balance for March and April will be more than RM50K. So, I had to standby some funds ready to pay the credit cards’ outstanding balance in full by end of March.
Actually, I can deposit the entire money allocated (more than RM100K) to pay my Credit Cards’ bills in 1 month FD and earn about 3% p.a. in interest but I thought I’d try out Maybank Q-Cash using RM50K and the balance deposited into 1 month FD and earn guaranteed 3.15% p.a. interest.
Now, I was told Maybank Q-Cash does not pay you any “interest” or “dividend” for non-working days, i.e. Saturdays, Sundays and Public Holidays. However, I was told that Maybank Q-Cash does pay “extra” dividend monthly (I can’t remember the time of the month but it should be end or early in the month).
So with the above consideration, this is what I did (or what I intended) :
I gave my Maybank Premier Wealth Relationship Manager (RM) the following instructions:
1. To debit RM50K from my Maybank2U Savers Online Savings Account and “deposit” into Maybank Q-Cash on 16 February 2015.
2. To “withdraw” the Maybank Q-Cash on 18th February 2015 and the money to be deposited back into my Maybank2U Savers Online Savings Account.
Reason for the above instructions are as follows:
a. I mentioned earlier that Maybank Q-Cash does not pay “interest” for Saturdays, Sundays and Public Holidays. And 19th February falls on Thursday and happened to be a Public Holiday (1st day of CNY). Therefore, if my RM were to key into the system to withdraw the funds on 18th February 2015 before 10am, I was told the money would be deposited into my Maybank2U Savers Online Account on the same day at 3pm. And I could then earn about 2% interest for the money that is parked in my Maybank2U Savers Online Savings Account for the 4 non-working days, i.e. 19, 20, 21 and 22 February 2015,
b. I can see how much “interest” I actually would earn for depositing my money with Maybank Q-Cash for 2 nights, i.e. deposit on 16th and withdrawing on 18th February 2015.
3. To debit my Maybank2U Savers Account RM50K on 23rd February 2015 and redeposit back into Maybank Q-Cash and withdraw on 20th March 2015 or as per my instruction (can be later or earlier).
So, with the above 3 instructions, I signed (pre-signed) all the necessary forms and left for Melbourne.
But shit always happens…… while in Melbourne, I checked my Maybank2U Savers Account on 23rd February 2015 and noticed that the amount that was supposed to be credited into the account on 18 February 2015 was not there! Forgot to check earlier as I was celebrating Chinese New Year.
So, I called my RM immediately (on 23rd February and it was about 3pm Malaysia time) and she said she will check. So, I guess I lost a few days of interest (i.e. supposed to credit into my Maybank2U Savers on 18th February 2015 to earn me few days of interest at 2% p.a.). I blame myself for it as I did not call my Relationship Manager on 18th Feb before 10am to reconfirm/remind her of my instructions.
Early next morning, 24th Feb 2015, I checked my Maybank2U Savers account again (before 9am Malaysia time) and somehow there is a credit of RM50,028.99 in my account???? Therefore I’ve got no idea if my RM actually performed the withdrawal from Maybank Q-Cash on 18th Feb or on 23rd Feb 2015 before 10am (it will be impossible for her to withdraw my Q-Cash after I called her on 23rd Feb 2015 because it was about 3pm when I spoke to her).
Anyway, I called my RM at 9.30am Malaysia time on 24th February 2015 and instructed her to place another RM50K into Maybank Q-Cash and when I checked my Maybank2U Savers Account later that evening, RM50K was debited.
On 19th March at about 12pm, I called my RM and instructed her to withdraw my funds from Q-Cash first thing on the next morning. I checked my Maybank2U Savers account on 20th March at about 4pm and was happy to note RM50,099.52 had been credited.
So here is what I earned from Maybank Q-Cash
Debited RM50K on 16th February 2015 from my Maybank Savers Account and on 23rd February RM50,028.99 was credited back into it. Total 7 nights (including 4 non-working days) and the “interest” I earned was RM28.99 or 3.02%!!!!
3.023% p.a. for 7 days (or nights actually) is pretty good compared to my Maybank2U Savers account but less than Maybank 1 Month FD Board Rate at 3.15%
Debited RM50K on 24th February 2015 from my Maybank Savers Account and on 20th February RM50,099.52 was credited back into it. Total 24 days and the “interest” I earned was RM99.52 or 3.027% Once again this rate of 3.02% is better than my Maybank2U Saver Online interest rate but lower than Maybank’s 1 Month FD Board Rate where I can perform eFD online and earn 3.15%
In conclusion, Maybank Q-Cash pays better “interest rate” that my Maybank2U Saver Online Savings Account.
I hope the above has given you some insight to the workings of Maybank Q-Cash and now you know of another alternative product to go park your funds for short term period.
CONCLUSION – Savings Account for GenZ, GenY, GenZ and Beyond.
Everybody have their own strategies on how to maximize their hard earned money. In my opinion, for long term savings, it does not make sense to park your money in a Savings Account when you can go open a Fixed Deposit Account with RM500 for tenure of 2 months and above and earn more. However, most of us do have money in Savings Account for emergency use or for our daily expenses.
And once again to those of you who find this article interesting or maybe not and want to criticize it, please do not cut and paste “my work” into your website/blog or steal my contents and claim it to be yours; I would appreciate if you can please provide a link to this article instead and I hereby thank you for your kind understanding and selfless cooperation.
Savings Account For Adults
Basically OCBC Smart Savers and Starter Savings Account interest rates are very good – that is subjected that you do not make any withdrawals. Here is what I would suggest that you do if you want to deposit your short term money in OCBC.
- Open both the OCBC Smart Savers and Starter Savings Account.
- In a particular month, only withdraw money from either the Smart Savers Account or Starter Savings Account (not both), withdraw as much as possible from the account you are making withdrawal and whatever balance that is not required to be spent away, deposit it to the other account to earn more interest rate.
- Once again, for both the OCBC Smart Savers and Starter Savings Account, if you really need to withdraw money from these accounts, best you DO NOT perform the withdrawal after the 1st week of the month because you would then earn very little interest from the money parked in the account in the month you made a withdrawal.
CASE STUDY – ME!
If you have been reading my blogs for the last 2 years, you will know that nowadays I mostly use my Maybank 2 Cards Premier AMEX Reserve or Visa Infinite. So for convenience sake, I will deposit the funds allocate to pay my Maybank credit card bills into my online Maybank 2U Savers Account. And when my Maybank credit cards’ bills are due, I can pay them from wherever I am on planet earth (as long as there is internet connection).
I am now going to give you 2 examples:
EXAMPLE No.1 – Maybank Credit Cards, Maybank eFD and M2U Savers
- Credit Card Statement Date: 8th of every month;
- Payment Due Date: 28th of every month;
- Assuming today is the 3rd of May 2016;
- I have a RM50K FD maturing (FD Promo at UOB);
- I want to buy a Rolex watch that cost RM50K;
- I will be overseas from 15th May to 8 June 2016; and
- I will be overseas again from 25 June 2016.
If I were to go and purchase the watch today using my Maybank 2 Cards Premier AMEX Reserve, it means that I will need to settle the payment on or before 28th of May 2016. So, the smart thing to do is to purchase the watch on 9th of May 2016 with my Maybank 2 Cards AMEX Reserve. Therefore, the payment for the watch will be only due on or before 28th June 2016. As such, I can earn some interest from now until 28th June 2016, which is about 55 days.
3rd May 2016 – I will go to UOB and instruct them to transfer the RM50k into my Maybank Basic Savings Account (or Maybank 2 U Savers Account) via GIRO.
4th May – The RM50K would have been credited into my Maybank Basic Savings Account. I will then deposit the money into eFD for 1 month with interest rate of 3.15%. And at the same time I would instruct that the Principal (RM50K) plus interest be credited into my Maybank 2U Savers Account upon maturity date.
9th May – I will go buy the Rolex watch.
15 May – I’m going overseas.
4th June – the eFD Principal Sum RM50K PLUS Interest amounting to RM133.76 (31 days @ 3.15% p.a.) would be automatically be transferred to my Maybank 2U Savers.
8th June – I am back in KL.
25th June – I’m going to overseas again.
27th June – while overseas, I log on to my M2U and pay the Maybank 2 Cards AMEX Reserve bill amounting to RM50K
1st July – I will have earned about RM65 in interest from the RM50,133.76 sitting in my Maybank 2U Savers Account (4th May until 27th June).
From the above, it can be observed that I will earn a total of RM199 FREE POCKET MONEY versus RM0 using cash to go pay for the watch on 3rd May 2016. And best of all, by using the AMEX RESERVE, I would earn myself slightly more than 50K Enrich Miles!!!
EXAMPLE No.2 – Maybank Credit Cards, Maybank Q Cash and Maybank Basic Savings Account
- Credit Card Statement Date: 8th of May 2016;
- Payment Due Date: 28th of May;
- Assuming today is the 3rd of May 2016;
- I have a FD Promo maturing today at UOB;
- I have swiped RM150K with my Maybank 2 Cards Visa Infinite to pay for my children overseas tuition fee and earn my self close to a return FREE Business Class ticket KL/London worth RM15K; therefore I will need to settle this amount prior to 28th May; and
- I will be overseas from 15 May to 8 June 2016.
- I have shown you earlier that the Maybank Q-Cash earned my about 3.02% p.a. in interest.
3rd May 2016 – I will go to UOB and instruct them to transfer the RM150k into my Maybank Basic Savings Account (for this example, I cannot transfer into your Maybank 2U Savers Account) via GIRO.
4th May – The RM150K would have been credited into my Maybank Basic Savings Account. I will then go to Maybank and see my Premier Wealth Relationship Manager and instruct her to debit RM150K from my Maybank Basic Savings Account and “deposit” it into Maybank Q-Cash with the instructions that it be withdrew on 25th May 2016 before 10 a.m. (total about 20 days and must be on a working day) and the Principal plus dividend be credited into my Maybank Basic Savings Account.
15 May -I’m going overseas.
25th May – Assuming that I will earn 3.02% p.a. in dividend for the 22 days my money was parked at Maybank Q-Cash, a total of RM150,273.04 would be credited into my Maybank Basic Savings Account. And if I can remember, I will then log on to Maybank 2U and transfer the money from my Maybank Basic Savings Acount to my Maybank 2U Savers Account to earn 2.25% p.a. in interest.
27th May – While I’m still overseas, I will log on to M2U and pay my Maybank credit cards’ bills.
The above example shows that I earned RM273 FREE Pocket Money when I parked my money at Maybank Q-Cash to earn about 3% in interest for a total of 22 days (less than a month). If I had parked the RM150K in my Maybank 2U Savers for 22 days, I would earn less than RM215. So, by opting to go with Maybank Q-Cash, I can earn extra RM60 FREE Pocket Money.
However, by opting to go with Maybank Q-Cash, you have to physically go to the bank and sign some documents. As such, it may not be worthwhile if we are just talking about RM50K, it would be less hassle to just go GIRO the money from UOB into the Maybank 2U Savers Account.
Savings Account for Parents and Children
For those who have kids, why settle for basic savings account when we can earn more with junior accounts. Those who have kids should take advantage of Hong Leong Bank Junior FD and Junior Savings Account. You see, periodically, HLB will offer Junior Fixed Deposit promotions. And best of all, HLB Junior FD pays interest monthly where it is credited into HLB Junior Savings Account where the interest is also paid monthly.
And nowadays, there are HLB branches everywhere. In my case, my children have their own Junior FD and Savings Account in one branch; and, I would go to another branch to open another Junior FD and Savings Account for my own use. However, sometimes I would split my deposits into my “children’s savings account” too because once you hit RM50K, the interest paid drops like hell. And when I do deposit my own money into my “children’s Junior Account”, I would only withdraw the principal and whatever interest earned is theirs. Not only that, you can go to any HLB branch to do withdrawals from your Junior Savings Account and there’s no limit for inter-branch cash withdrawals.
DO NOT ever click on email links with bank’s name. It would be better to create an email address just for banks and this address should not be disclosed to anyone else. Always key in the bank’s website address yourself to log in.
Click here to read my article Credit Card Fraud and SMS Alert. The contents in this article applies to any banking products and not just for credit cards.
Once again, if you are new to my blog and have more than RM10K sitting in your savings account, click here to my Fixed Deposit Page and learn how you can earn more in interest from Fixed Deposit Promotions.
Now, many of the Fixed Deposit Promos can also be utilized to earn your children more money instead of having their funds sitting in their Junior Savings Account. For example, as you have learned, the highest interest rate you can get is 3.15% from Junior Savings Account. In April 2016, UOB Bank FD Promo can earn you 4.3% for 12 months tenure. That’s more than 1% extra versus 3.15%. Therefore, you should always deposit your child’s money in to FD Promos too by opening a joint Fixed Deposit Account with your child.
I have mentioned HLB Junior FD earlier, but it is not always that they offer special Promo interest rate for HLB Junior FD.
UOB Bank, on the other hand, always (for the last few years without fail) offer FD Promos but they don’t have Junior FD. You can always park your child’s money in your name only (or joint with your wife) but I personally do not like to do this as it makes it hard for me to keep track of my children’s money. A few years ago, I wanted to open joint Fixed Deposit with my children’s name in UOB and my Privilege Banking Relationship Manager had to seek approval from HQ. Not only that, 3 of my children (at that time they were below the age of 18) had to sign numerous forms too.
With having both HLB Junior FD joint accounts and UOB FD Joint accounts with my children, I can switch their money between these 2 banks to earn them more in interest from FD Promos.
Want to earn more pocket money, click here and read my article on Maybank Mudarabah GIA-i Account which can be treated like a Savings Account where you can place and withdraw your money anytime; and best of all, you can earn 4% p.a. returns even if you just park you money in the GIA-i account for a single night.
If you have a child studying overseas, click here and read my article titled A Little Bit Of This and A Little Bit Of That – Volume II, Chapter 1 and I’m sure you will learn a thing or two.
And if you have children, you must read my article titled Spending Your Children’s Future Inheritance.
I hope this article is beneficial to you guys and can assist you in earning some pocket money 🙂
Another Personal Financial Tutorial by GenX