facebookHow can I maximize my savings (~$75k) given the current pandemic situation (i.e. banks cutting interest rates)? - Seedly

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Anonymous

15 Jul 2020

Saving Hacks

How can I maximize my savings (~$75k) given the current pandemic situation (i.e. banks cutting interest rates)?

Discussion (3)

What are your thoughts?

Gideon Ng

Gideon Ng

15 Jul 2020

Level 7·Blogger at FI Pharmacist

Hi Anon,

$75k is a really great amount of savings that you have!

I think you should consider breaking down your savings into 3 aspects:

  1. Emergency Funds

  2. Savings for Short Term Goals

  3. Savings for Retirement (Long Term)

Your emergency funds should form the base of your savings. These help you to tide across any unexpected emergency that you may incur. There is no right amount that you should keep in your fund as each person is different. Usually, most people will have about 3-6 months of monthly expenses as the amount in their fund. (You can read more about emergency funds here). Due to the liquidity required for emergency funds, you should be placing them in savings accounts. The 2 that I'm using for my funds are the Standard Chartered JumpStart and the SingLife account (my review can be found here).

The next savings that you can set aside is for short term goals, such as saving for big ticket items such as a car, a home or even your wedding. These usually require a large sum of money upfront and by this fund, you are able to pay for these expenses.

Since they are longer term goals, you can afford to put them in products that give you better returns than bank accounts, with slightly less liquidity.

Some examples you can consider are endowment plans, or the Etiqa Elastiq plan (my review here).

To save for retirement, I would highly recommend you to learn how to invest. Since you have a long time horizon, you will be able to tide through the short term volatilites to be able to get good returns, since the markets will always go up.

There are many ways you can start to invest, such as Regular Savings Plans, Robo-Advisors.

If you are more confident, you can do your own stock picking as well.

Lim Qin Da

Lim Qin Da

15 Jul 2020

Level 8·Business Administration & Analytics at National University of Singapore

Hey Anon!

You can put your first $10k into Singlife, which is one of the most popular savings account now with interest rates of 2.5% p.a. If you are between 18 - 26 years old, Standard Chartered Jumpstart is another option, offering 1% p.a., still decent as of now.

If you are looking for interests slightly higher than Jumpstart, you could consider Elastiq, an insurance savings plan with 90 days lock in but offering 1.8% p.a., or ultra-low risk investments such as Endowus Cash Smart and Stashaway Simple.

If you would like to read more, I've put up a compilation of popular choices from the community recently, with links to articles covered by Seedly as well as user reviews. You can check it out here!

Cut in interest rates are across the board.

There are many instruments and resources available.

Yo...

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