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Anonymous

19 Apr 2020

Saving Hacks

What's a suitable savings account for a fresh graduate?

I’m 22 years old and a fresh grad.
I’m considering the SC Jumpstart (2% p.a) or CIMB FastSaver (1% p.a) for savings. (I spend less than $200 a month)

I also want my money to work harder ($1k+ savings per month), however, I’m paying off my student loans ($10k+ left) at 4.5% per annum, hence, paying off my student loans would be better than investing now.

Which savings account would be better and what steps should I take to grow my money at this point in time? Please help!

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Discussion (2)

Elijah Lee

27 Sep 2019

Senior Financial Services Manager at Phillip Securities (Jurong East)

If you don't spend a lot, the OCBC 360 account is a good option, as you'll get 1.2% -2% just by crediting your salary, and an additional step-up increase just by saving more in the account. There's no requirement to spend on your credit card or invest with them.

Paying off your student loans would be better at this time before you start investing, as 4.5% interest is quite hefty. It is good that you are saving ~$1000 a month, so just continue to save first till you have at least 12 months of expenses set aside, and then you can start to invest.

Having said that, please ensure that you have adequate insurance such as hospitalization, critical illness and death cover (if you have dependents e.g. parents), this is the very first thing you need to do before you invest. Speak to an independent advisor such as myself to understand the types of plans/coverage and your needs so that you can get the most effective and cost-efficient cover for your premiums.

Once your emergency savings and your insurance are settled, you may start to invest. There are many asset classes and it will also be good to spend some time understanding them so that you can have an idea of what may suit you. Again, an independent advisor will be able to assist you with your understanding and help guide you. Your $1K/mth saving will become a $1K/mth cashflow that you will have to divide between the asset classes of your choosing in order to build your portfolio over time.

Cedric Jamie Soh

27 Sep 2019

Director at Seniorcare.com.sg

Paying off your loan at 4.5% is definitely better than saving your cash in a bank (around 1-2% PA) however, do make sure you have a small sum of money for emergencies (both good and bad- for example, an accident for medical treatment, or an opportunity for overseas travels etc)
SC Jumpstart (2% p.a) and CIMB FastSaver (1% p.a) for savings are good. You've already done your research ;)

I will take Jumpstart as it is designed for young savers :)

If you can do salary crediting, these accounts are not bad to read up too

  1. OCBC 360 account
  2. DBS multiplier account
  3. UOB One Account

You may also consider learning about ETF, stocks, and robo-advisors, start learning investment early and start SMALL (since you only fresh grad)

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