The BEST Savings Account in Malaysia
Personal Finance 101: What piggy bank to use?
Unless you keep stacks of cash in a metal tin under your bed or store them in a physical safety deposit box, it is unavoidable to have an account opened with a bank in our society. Even if you’re a strong advocate for cyptocurrency, you will still need to rely on Fiat money at this time and hence have a bank account.
Often times, the bank account that we have is determined by our workplace, at the convenience of the company. However, this may not be the ideal one for your situation. Truthfully, most people just don’t put much thought into the bank accounts that they use.
That brings us to our first question.
How many bank accounts do I need?
By knowing how many bank accounts we need (and for what purposes), we can then decide which bank account is the best one for each of the different purposes.
Ideally, it is good to have at least 2 bank accounts. I personally hold 3 which is split into the following:
- Easy access (Also the salary + income account)
- Buffer
- Touch-Me-Not
| Purpose | Kind of accounts | |
|---|---|---|
| Easy Access | The account for daily usage, be it to withdraw as cash or to use online transfers. | Most accessible with ATMs and bank branches and have good internet banking facilities (incl app) It needs to be convenient! Interest rate is not as important since the account balance should be low here |
| Buffer | A fixed portion of income is deposited here monthly. This serves as 3 purposes: – Putting aside money for annual payments (e.g. insurance) or big ticket purchases (e.g. furnitures) – To be channeled out for investments – Emergency usages | High interest with easy access |
| Touch-Me-Not | Main wealth accumulation account: A fixed portion of income is deposited here monthly as super emergency fund and should be only taken out for that or for certain big ticket investments. | Highest interest rate |
Some prefer the buffer & touch-me-not as one account. I feel it’s easier to manage when it’s split given the tendency of dipping into the “touch-me-not” portion if it is the same account.
“Out of sight, Out of mind” – You won’t spend what you put away.
The best bank accounts for my money
With a multitude of banks available in Malaysia, it’s no wonder people tend to get overwhelmed and just go for what’s convenient.
To help us all out with this, I went through a few banks for comparison purposes. The banks involved are namely: Affin, Alliance, Ambank, CIMB, Citibank, Hong Leong, HSBC, Maybank, OCBC, Public, RHB, Standard Chartered, UOB.
I will only be looking into Current Account/Savings Account (CASA) accounts for this purpose. Fixed deposits locks down your cash for a specified period and generally has an interest rate of 1.9% – 2.3%. The promo rates vary from time to time and can be attractive.
Do take note that all rates are as at the date of this post (June 2020) and may differ depending on when you are reading this.
Still confused, right? I have coloured in red those that we can quickly eliminate:
- Less than 100 bank branches (less accessible)
- No app available (this is a must have at this day and age)
- Specifically for high yield accounts, interest rates that are less than 2.4% as StashAway Simple (I’ve evaluated this in another post) or a simple fixed deposit will fare better than these
In selecting the suitable bank accounts:
- Easy Access – In Malaysia, Maybank by far trumps the other banks in presence with 354 bank branches, followed by RHB with 289 bank branches. If you have no issues with your current bank account, then all is well.
- Buffer & Touch-Me-Not – Pick 2 high yield accounts and assign them accordingly:
- One with all the bonus interest criteria – spend, pay, invest – that fetches the highest interest (i.e. Hong Leong Top Yield or Pay&Save, OCBC 360 or Booster, PB MySalary, RHB Savers, UOB ONE Account).
- My preference would be OCBC 360 and RHB Savers as it is the highest yield without needing to invest in any banking/bancasurrance product
- One with either no criterion / simpler deposit only criteria (i.e. UOB Stash, those highlighted in red, or StashAway Simple with 2.4% interest rate)
- Alternatively, you could also consider taking on another high yield account with bonus interest criteria if you could meet the additional requirement for deposit/pay/spend
- One with all the bonus interest criteria – spend, pay, invest – that fetches the highest interest (i.e. Hong Leong Top Yield or Pay&Save, OCBC 360 or Booster, PB MySalary, RHB Savers, UOB ONE Account).
In The End
You could opt to have only 2 bank accounts also which would make your life simpler – Easy Access + Buffer.
Whilst there seems to be many choices, there are actually only a few good ones if we really look into it.
Start taking charge of your finances and make sure they earn you good returns even though they are sitting in your bank account!
