Earn 71x your Savings Account Interest Rates

On The Sunday Times, well-known Invest Editor, Lorna Tan, wrote an article on "Higher interest on enhanced savings plan".

Link here: http://www.straitstimes.com/business/invest/higher-interest-on-enhanced-savings-plan-investroundup

Similar to the article we wrote previously below (12May2017), it highlights the Maybank SaveUp savings programme:

The Sunday Times highlights a savings programme, two insurance products and a new personal finance mobile app.

The Save Up programme was enhanced on June 1. Maybank customers now have nine options to choose from, to help them achieve the maximum interest rate of 3 per cent a year.

The deposit cap for the bonus interest has also been raised, so customers can enjoy higher interest on the first $60,000 in their SaveUp Account, up from $50,000.

[Published on 12 May 2017]
[Updated with Maybank SaveUp account. Thanks reader for the updates]
Previously we shared how you can easily earned 20x your Savings Account Rates without even leaving your home... simply by just opening an online account and transfer your funds in.

If you have not read how you can easily earn 20x, click on the link below:
Easily earn 20x your Savings Account Interest Rates

To earn 71x, you need to work a bit. Don't worry, it's achievable and mostly automated :) If you don't know yet, nowadays banks are giving higher interest rates on your deposit if you use their services. These are the 3 common things you need to do:

1) Spend on their Credit Card

2) Pay Giro bills using their account

3) Deposit your salary to their bank

Checkout the interest rate (last column) below:

Take example of the last highlighted row, to enjoy 3.55% interest rate (that is 71x your Savings Account of 0.05%), you need to open an account from Bank Of China (BoC) called SmartSaver and do the following:

1) Spend $1,500 on their credit card

2) Set-up a Giro or pay your bills to 3 different account numbers with minimally $30 each bill (can be your credit card bills, utilities, mobile, tax, etc.)

3) Inform your HR to transfer your salary here with net salary (after CPF, etc.) of more than $6,000

Note: Actually there's additional bonus that is not indicated here where any incremental value compared to last month balance, you will get additional 0.6% making it a total of 4.15% (3.55% + 0.6%). And that comes to 83x your savings account rates. But the amount is based on only the incremental value and not your total savings/balance in the account. Thus we did not include in the overall calculation.

If the credit card expenses and/or the salary is hard to achieve, you can look at the lower tier one where you just need to:

1) Spend $500 on their credit card

2) Set-up 3x Giro/bills with $30 each

3) Deposit net salary of $2,000

With this you will get 2.35%; that is 47x your savings account rates.

Note: Not all company have the option to deposit your salary to BoC. If your company doesn't allow, the next best option is Maybank. If still cannot, then it'll be either UOB or OCBC account.

If you have more than $30,000 in your savings, then UOB One Account is preferred. Else can use OCBC 360 Account which gives you slightly higher interest rate.

For UOB One Acc, the interest rates are incremental from 1.5%~3.33% depending on your balance. If you have $50,000 fixed, then you will enjoy an interest rate of 2.48%. That is, monthly you will get $103! Compared to just $2 if you put into your Savings Account. And you just need to do 2 things:

1) Spend $500 on their credit card

2a) Set-up 3x Giro/bills   OR

2b) Deposit net salary of $2,000

If you are still keeping your money in your normal Bank Savings Account, don't waste your time anymore, take action now!

So instead of having a free McChicken ($2) every month, you can get yourself and your loved one a free buffet for 2 ($100) every month :)

If we would to rank them (based on salary of <$6,000 & card bills >$500):

1) 3.00% Maybank SaveUP
2) 2.48% UOB One Account
3) 2.35% BoC SmartSaver

Consolidated banks interest rates:

A Part of All You Earn (Fruits of Labour) Is Yours to Keep

Labour Day. In Singapore, it is celebrated on the 1st of May each year (also known as May Day) as a mark of solidarity amongst workers. May Day is a day of special significance for organised workers, as it serves to remind others what their collective strength has achieved for workers. 

The collective strength to build the financial stability of an organisation and/or the well-being of the nation's economy, would in return bring about prosperity to every individuals. Hence it is also a day, in my opinion, that we should count on our fruits of labour and assess if we have been managing them wisely/prudently. And on this note, the book "The Richest Man in Babylon" written by George Samuel Classon, just concomitantly surfaces in my mind.  

This is a book on personal finances, interestingly written with Ancient Babylonian empire as the backdrop. It was thought that the city of Babylon was the richest city in the world in that particular era. It was believed that its treasures of gold and jewels were aplenty and beautiful. The city of Babylon was set on the bank of Euphrates River, in a flat arid valley, it had no forest nor mines. All of the resources that arose from this city was man-made. Its only natural resources were fertile soil and water in the river. It was widely believed that the Babylonian engineers invented the irrigation system that we know today.

The Babylonians were skilled in arts, their works such as sculptures, jewelry, painting and weaving were found today in the most famous museums around the world. And lastly, they were also clever financiers. It was told that they were the inventors of financial instruments such as money, promissory notes and property title deeds. I won't be surprised if you have proudly related the city of Babylon to none other than, Singapore - which similarly has no natural resources and yet, after decades of labour, it has become what it is today. 

The author, Mr. Classon, advocated the prosperity of a city/nation to its people. A city would not have become prosperous if its people are not wealthy. And I guess that by transforming into a successful city in this manner, it introduces longevity to a flourishing economy through such a metamorphosis - that is, a rich city hatches and nurtures wealthy people who contribute to the well-being of its economy.

It is a world acclaimed fact that Singapore is a successful city. So how could we grow wealthy as an individual? In the book, George Samuel Classon also offers his insights on '7 cures for a lean purse' (which we like to relate some of them to our Five Pillars of Wealth): 

i. Start thy purse to fattening (Wealth Accumulation - Savings plan, Endowment & etc.)

ii. Control thy expenditures (Wealth Maintenance - Budgeting)

iii. Make the gold multiply (Wealth Enhancement - Investment)

iv. Guard thy treasure from loss (Wealth Protection - Insurance)

v. Make thy dwelling a profitable investment (Wealth Distribution - Own Assets)

vi. Insure thy future income (Wealth Protection - Disability Income Insurance)

vii. Increase thy ability to earn (Invest in yourself)

Have you adopted any/all of the 7 cures? If not, why not let us all take the opportunity on this Labour Day to reflect, review & reassess on our personal finances health status. If that is too much for you to handle on your own, look for your trusted adviser to offer his/her evaluation & possibly, solution(s)!

Easily earn 20x your Savings Account Interest Rates

Have you notice that your savings account is giving you less than $1 of interest per month? Or some even less than $10 per year.
Well, this is because your normal Savings Account interest rates is just 0.05% per year.

Yes, it's just "0.05%", not even 0.5%. It's 20x lower than 1%.
It's "per year" and not per month. It's about 0.004% per month. Yup, it's 250x lower than 1%.

Well, you can immediately earn 20x more than your pathetic interest rate of 0.05%/yr by opening a CIMB FastSaver Account online here:
http://www.cimbbank.com.sg/en/personal/products/accounts/savings-accounts/cimb-fastsaver-account.html

By just registering online, your CIMB FastSaver account number will be issued instantly. With the account number you can then transfer your Singapore Dollar funds from your existing bank to this new account number.
And voila.. from this very second onwards, your money starts to earn 1%/yr instantly. It's that simple.

To give you some perspective, if you have $20,000 in your POSB Savings Account, by the end of year, when you update your passbook, you will see an extra of $10 for interest.
But for CIMB FastSaver, every month you will see an extra $16 (yup, it's monthly and not typo). If per year, it's $200!

That is a $190 difference!

With this simple step, you can also easily beat current standard FD (Fixed Deposit) rates. E.g. as of 28April2017, DBS 12-month FD is 0.35%/yr.

CIMB FastSaver account is a normal savings account with no "lock-in" period like FD (Fixed Deposits). They don't even have "fall below fee" which some banks charge $5/mth if your balance is less than $3,000!

-----------------------------------------------------------
You might be thinking, well, even if it's 20x it's still 1%.. You still feel it's low. Well stay tuned, next we will share how to earn 71x your normal savings account rates with up to 3.55%!

Compound Interest

What is "Compound Interest"?
Compound interest is interest calculated on the initial principal and also on the accumulated interest of previous periods of a deposit or loan. Compound interest can be thought of as "interest on interest" and will make a deposit or loan grow at a faster rate than simple interest, which is interest calculated only on the principal amount.
[Source: Investopedia]

For simple interest, if you put in $100 with 6% annual interest, by end of Year 1, you would get $106; end of Year 2, you will get $112; end of Year 3, you will get $118.
Every year you get $6 interest.

For compound interest, if you put in $100 with 6% annual interest, by end of Year 1, you would get $106 (same as normal interest); end of Year 2, you will get $112.36; end of Year 3, you will get $119.10.
If you notice, by end of Year 2, you will get extra $0.36 and by end of Year 3 you will get an extra $1.10 compared with normal interest. This is what compounding is, where your interest earned also earn interest for you (e.g. additional 6% on the Year 1's $6 earned interest). 

Though the difference is not that great for the first few years, but by end of Year 9, you will notice the difference is getting bigger, to be precise 9.7% more. Populated below is the difference of the interest earned between normal interest (in blue) against compound interest (in orange) based on 6% interest:

As you can see that the orange line (which represents the compounding interest) starts to move exponentially as the time goes. Whereas the blue line (normal interest) just goes up in a line.

This is what happen when you leave your interest gained to be reinvested again making the interest that you earned to earned further interest.

This is the power of compounding interest and as quoted by Albert Einstein:
"Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it."

About the last few words: "he who doesn't ... pays it." What it meant is that it's also applicable for loans or credit that you borrow. E.g. if you just pay the minimum amount of your credit card bill, your loan amount will be like the orange line above where it'll grow and skewed upwards.

Just to add:

For Simple Interest, it takes 17 years to double your money at 6% interest, but Compound Interest takes only 12 years. It saves you 5 years!
By end of Year 21, the interest gained from Compound Interest is 50% more than Simple Interest

Just add another 9 years, by end of Year 30, the interest gained by Compound Interest is 100% more! That is double the total interest earned by Simple Interest

Wealth Accumulation

The Wealth Accumulation drives you towards meeting your long term financial objectives. In Singapore, the two most common needs are Retirement Funding and Children Education Funding. We will help you develop a realistic and achievable program to meet these needs.

Key considerations:

• Accumulation
• Retirement
• Children

Five Steps of Financial Planning

Basically there are only five steps to a financial planning process:

1. Gather & Establish Objective
2. Analyse & Evaluate Information
3. Develop Plans and Recommendations
4. Implement Plans & Recommendations
5. Review Periodically

Five Pillars of Wealth

The Five Pillars of Wealth are the essential elements in a comprehensive framework that covers the wealth management needs of an individual from a complete perspective. Every individual who cares about his/her financial life will benefit from this framework whether he/she is just getting by, rich, poor or broke. Later we shall see that dire consequences await those who do not adequately address any of the crucial pillars of wealth management.

1. Wealth Maintenance
2. Wealth Accumulation
3. Wealth Protection & Preservation
4. Wealth Enhancement
5. Wealth Distribution

Or Wealth M.A.P.P.E.D in short.