When it comes to saving money, there are various ways to do so. One popular way to save in Singapore is through a regular savings plan. It involves making regular deposits into a savings account, typically over some time, such as 12 or 24 months. By doing this, you can build up your savings gradually and avoid putting too much pressure on your budget. Let’s take a closer look at how regular savings plans work in Singapore and some of their benefits.
What is a regular savings plan, and what are the benefits of having one?
A regular savings plan is a type of savings account that allows you to make regular, scheduled deposits into your account over some time. You can decide how much you want to save each month and set up an automated payment to transfer the funds directly from your bank account into the savings plan. The benefits of having a regular savings plan include the following:
The main benefit is the convenience of having your money automatically saved each month. It can take away some of the stress and uncertainty that comes with saving, as you know that funds will always be available when you need them. Additionally, this method of saving makes it easier to build up a more significant sum over time than if you were only making occasional deposits into your savings account.
Finally, with a regular savings plan, you are likely to earn higher interest rates on your money than if it was just sitting in an ordinary savings account. For example, Saxo Singapore offers up to 2% p.a., which is significantly higher than the current base rate of 0.05%.
How do you set up a regular savings plan with your bank?
Setting up a regular savings plan is usually quite simple and can be done in just a few steps. Firstly, you should contact your bank to discuss your options. They will likely have several different plans on offer, and depending on your circumstances, one option may be more suitable for you than another.
Once you have chosen the best plan, it’s time to set up the automated payment from your bank account into your savings account. It is typically done online or over the phone with one of the bank’s representatives. The amount you wish to save each month will depend on your budget and needs, but some banks allow for flexible payments to adjust if necessary.
What are some tips for sticking to your regular savings plan?
The key to making the most out of your regular savings plan is sticking to it. It can be easier said than done, especially when faced with unexpected expenses and temptations. Here are a few tips that can help you stay on track:
First and foremost, ensure that you set realistic and achievable goals, which will help ensure your savings plan is manageable on your budget. Secondly, remember to review your progress periodically, and seeing how far you have come can be highly motivating and encourages you to stay the course.
Finally, if temptation arises, try to channel this energy into achieving something positive for yourself instead. For example, if you are tempted to buy something expensive with your money, why not save up for a lovely holiday instead or use the funds towards an investment?
Overall, regular savings plans offer a simple and convenient way to save in Singapore. By making regular deposits into an account over time, you can build up a substantial amount of savings that can be used in the future.
How much should you save each month from reaching your financial goals?
The amount you choose to save each month will depend on your budget and financial goals. It is important to remember that the more you can save, the greater the returns will be in the long run.
According to Singapore-based financial experts, it is generally recommended that you should aim to save at least 20% of your income each month. Depending on your individual needs and circumstances, this can be adjusted, but it should provide a good starting point for most people. Additionally, suppose you have any irregular expenses, such as medical bills or car repairs. In that case, these should also be considered when deciding how much you can afford to set aside each month.
Overall, setting up a regular savings plan in Singapore is a great way to build up your savings over time. With some planning and perseverance, you can easily reach your financial goals and enjoy the rewards of having a substantial nest egg.
Can you withdraw money from your regular savings plan early if needed?
It is possible to withdraw money from your regular savings plan early if needed. However, this should generally only be done in cases where the funds are vital due to an emergency or unexpected expense.
Depending on the terms of your particular plan, you may have to incur specific penalties or fees if you make an early withdrawal. Additionally, any interest accrued until that point may not be paid out as part of the withdrawal amount.
For these reasons, you should avoid making an early withdrawal unless it is essential. Try to find other funding sources, such as borrowing from family or friends, before turning to a regular savings plan for assistance.