What is a regular savings plan?
A regular savings plan is a financial product that allows you to make periodic deposits into an account, typically every month. The money in the account grows over time, typically at a fixed interest rate. At the end of the term of the regular savings plan, which is usually one to five years, you can withdraw the money or use it to purchase a specified financial product, such as an annuity.
What are the benefits of a regular savings plan?
The main benefit of a regular savings plan is that it helps you save money consistently. This disciplined approach to saving can be helpful if you have difficulty saving on your own. In addition, regular savings plans typically offer higher interest rates than regular savings accounts to grow your money more quickly.
What are the different types of regular savings plans in Singapore?
There are a variety of regular savings plans available in Singapore. Here are 10 of the most popular:
GIRO
It is a method of transferring money from one bank account to another and can be used for regular savings plans. To set up a GIRO arrangement, you must provide your bank account details. The author is the company or organisation to deduct a fixed amount from your account regularly.
Direct debit
It is similar to GIRO, where you regularly authorise an entity to deduct money from your bank account. The difference is that the amount deducted can vary each time with direct debit, according to the bill or service rendered.
Payroll deductions
If you are salaried, your employer may offer the option for you to have a portion of your salary (up to $1,000 per month) deducted and deposited into a savings plan. It is usually offered in conjunction with central banks in Singapore.
Cash deposit machines (CDMs)
Most banks in Singapore offer the option to deposit cash into your account via their CDMs available at all branches. It is convenient to make small regular deposits into your savings account.
ATM transfers
Besides being able to withdraw cash from an ATM, you can also use it to make transfers to your own or other bank accounts. It is a quick and easy way to make regular deposits into your savings account.
Internet banking
If you are comfortable managing your finances online, internet banking is a convenient way to transfer funds between accounts, pay bills and even shop online. Most banks in Singapore offer this service, and it can be accessed anywhere, as long as you have an internet connection.
Mobile banking
Mobile banking is a service offered by some banks in Singapore that allows you to access your bank account and perform transactions using your mobile phone. It is a convenient way to keep track of your finances and make payments on the go.
Standing instructions
With this arrangement, you can authorise your bank to make regular payments from your account to another account or payee. It can be used to pay bills or make deposits into a savings account.
Credit card auto-pay
You can set up an auto-pay arrangement if you have a credit card to have your monthly credit card bill charged to your savings account. It helps to avoid missed payments and late fees and also helps you keep track of your spending.
Regular savings plans
Banks offer a few regular savings plans in Singapore, typically with higher interest rates than regular savings accounts. With these plans, you commit to making regular deposits into the account for a set period, after which you can withdraw the money plus interest earned.
Bottom line
When it comes to saving money, there are many different options available to suit your needs. Whether you want to make small regular deposits or have a portion of your salary deducted automatically, there is a solution that will work for you. Talk to your bank about the different regular savings plans available and find one that best suits your financial goals. If you are looking for a saving plan, visit Saxo for more information.
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