A Beginner’s Guide to Savings Accounts
by Hann Liew
If you find yourself with a bit of spare cash, and find yourself wondering what to do with it, well, have you thought of starting up a savings fund? Because you should! Here at SaveMoney.my we obviously encourage saving money, instead of taking the extra money and spending it all! So here’s our guide to know more about Savings Accounts and how they can help you nurture your savings.
1. Are you spending more than you earn?
We all have that latest phone / accessory we don’t need but desperately want. But the ultimate key to start saving is to practise self-restraint. It doesn’t mean you have to stop shopping, but holding back on unnecessary items can definitely make a change in your bank account!
2. Any outstanding loans, mortgages or credit card balances?
If you have any, do pay off necessary bills and outstanding amounts because the interests can really burn a hole in your pocket. Do your best to pay the outstanding amounts on time, it’ll definitely help you Save Money.
3. What’s the difference between Investing and Saving?
These are two very different things, be very clear:
Saving is putting your money in a bank or financial institution and when you do, you earn interest on your saved balances. This is a government-guaranteed safe method to save up!
Investing on another hand, is putting your money in an investment on the chance that your money will grow. It’s quicker than conventional Savings Accounts, but comes with the risk of losing some money instead.
Where can you start?
Start by fixing an amount that you want to accumulate, how much you can afford to save, and work out the timeline.
If you have money that you don’t really need to use for more than a month, you can consider putting it into a Fixed Deposit (FD). An FD is basically an account where the bank rewards you with higher interest for locking in your money for a specified period of time, but if you take money out before the tenure end date you will lose that interest.
If you want to Save Money but can’t commit to a certain length of time, you can consider a normal savings account. There are lots of options with varying rates and offers. Choose wisely for the best interest rate to get you maximum growth.
Is my money safe in a Bank?
Truthfully, the future of local and foreign banks in Malaysia cannot be guaranteed. So your savings could be at risk should a bank fail.
We at SaveMoney.my say the safest thing to do is to look for is Banks with protection by Perbadanan Insurans Deposit Malaysia (PIDM). PIDM protects your bank deposits and will promptly reimburse you on your insured deposits (PIDM guarantees your savings up to RM250,000) should a member bank fail - and there is no charge for this insurance protection. Keep an eye out for the logo at your banking institution.
Start saving smart, and research what are the best and most fruitful methods for saving your money.
* Hann Liew is the Founder and Editor-in-Chief of SaveMoney.my, an online consumer advice portal which aims to help Malaysians save money through smart (and most of the time painless) savings in their daily banking, technology, and lifestyle spending habits.
