What do you do with the interest earned from savings accounts? - Seedly
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Anonymous

Asked on 12 Feb 2020

What do you do with the interest earned from savings accounts?

By putting your money in a high-interest savings account, what do you do with that interest that you earned? Do you save it or use it to offset your expenses?

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Adriel Thin
Adriel Thin
Level 4. Prodigy
Answered on 12 Feb 2020

I have set percentages for different forms of expenditure, and any amount of money I receive gets allocated based on the set percentages. Hence, I treat interest earned as income (regardless of how little) and this gets allocated based on the percentages. I find this instils discipline and takes care of thinking about what to do every time I receive money, regardless of the source (automation).

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Geraldo L.
Geraldo L.
Level 7. Grand Master
Answered on 27 Feb 2020

Usually I will transfer it to out another savings account (e.g. CIMB Fastsaver) if the amount is substantial. Otherwise, I will just keep it in there.

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Rais M
Rais M

27 Feb 2020

You gave me an idea. I will try transferring all interests (significant or not) earned in all my bank account to CIMB. Let the interest grow interest.
Geraldo L.
Geraldo L.

27 Feb 2020

Cool, if it's an amount that doesn't change that much you could also setup a standing instruction to automate the transfer of the interest - maybe 1-2 days after the standard date it gets credited in case the date falls on a weekend.

Regardless of how much interest I earn from a savings account, I keep my expenses less than 20% of my salary every month. As such, I do not use it to offset my expenses. It will be accumulated together with my savings, which I later on use to invest through other investment tools.​​​

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MT2020
MT2020
Level 7. Grand Master
Answered on 25 Feb 2020

The interest gained from savings account will be directed to my investment account as i aim to build up as much capital as possible to invest in equities.

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I keep the interests in the saving account so that I could tap on the compounding effect to grow my funds.

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Rais M
Rais M
Level 7. Grand Master
Answered on 25 Feb 2020

Interest from banks are not very significant. I just leave it in the bank (the high interest bearing ones) and let it roll over.

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With the interest earnd from savings account, I will use it to offset my expenses.

Otherwise if i have no expenses i will let the money roll to generate interest from it as well, the power of compounding.

I make videos about interesting stuff at youtube here​​​

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I keep only money that I need to use in the near future in the bank. This is regardless of whether it is in a high-yield account or an expenditure account. To do so, I will conduct a cashflow review. Here is how I do it: https://www.blog.pzl.sg/understanding-your-personal-cash-flow/

Thereafter, if the interest earned does not fall within what I need to use in the near future, then I will channel it into other avenues - in most cases investment and other growth tools.

For expenditure, I only spend the money that is allocated for expenditure. This is often done by creating a budget. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly-budget/

Here is everything about me and what I do best.

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