If you are a foreign domestic worker in Singapore and haven’t planned for your financial future yet, it’s time you get started. After all, you deserve a peaceful and comfortable retirement, just like everyone else. The sooner you start planning and saving for your retirement, the better and less stressful your retirement will be. Also, as a foreign domestic worker, you always have an edge over most other types of workers when it comes to savings, since your lodging, meals, travel expenses, and even medical expenses are usually taken care of by your employer. All you need to do is start saving as soon as possible.
If you are new to financial planning, it’s best to start with a basic savings account. These are the least risky when it comes to the safety of your money, and they offer a stable rate of interest, no matter how volatile the market is. Read on to understand everything you need to know about savings accounts in Singapore.
How to Choose the Best Account
Not all savings accounts serve the same purpose. There are different types of savings accounts, based on the purpose they serve. Check out some of the most common types, understand what they are designed for, and figure out which one works best for you.
Accounts for Long-Term Savings
There are savings accounts that are designed to encourage you to save for long-term. The longer you keep you money in these accounts, the more interest you will earn. For instance, with OCBC Bonus+ Savings Account, you can earn up to 0.80% p.a. interest. This includes a base interest of 0.05% p.a. and a bonus interest of 0.75% p.a. The bonus interest is credited for the months when you don’t make any withdrawals from your account. Other terms and conditions, such as minimum average daily balance maintenance, may apply.
Such accounts are designed to allow you to carry out your day-to-day transactions while keeping a track of your overall spends. Such accounts offer a better alternative to carrying cash all the time wherever you go. However, the interest rate on such accounts are not every attractive, compared to other savings accounts that are designed for long-term savings.
Being a foreign domestic worker, you could really benefit from a multi-currency account that will not only help you manage your savings in Singapore but also allow you to transfer the money to/from your home country. For instance, with the DBS Multi-Currency Account, you can keep 12 foreign currencies in addition to Singapore Dollars. You can buy any of the 12 foreign currencies whenever exchange rates are in your favour and keep it in your account for future spending requirements. If you wish to transfer your funds online to certain countries, you will be charged a very low fees (in some cases, there is no fee at all).
Such accounts are designed to provide you with online banking facilities, in addition to the benefits and liquidity of a savings account. For instance, with Standard Chartered e$aver Savings Account, you will get 24-hour phone banking, mobile banking, and online banking services to make transactions from anywhere and at any time. This account also allows you to set up standing instructions for your regular bill payments.
If you have a partner and you both wish to save together for your future, you could consider a joint account. These are like any other savings accounts, except that the responsibilities are shared among all the co-holders. There are generally two options in joint accounts – joint-all account and joint-alternate account. While a joint-all account can’t be operated without the approval from all the co-holders, a joint-alternate account allows every co-holder to operate and make transactions independently.
Eligibility Parameters for Foreign Domestic Workers
- You must have a valid passport.
- You must have a proof of your residential address. The following documents are generally accepted as a valid proof of residential address:
- Utility bill.
- Telephone bill.
- Bank statement or credit card statement.
- Rental agreement with your address.
- Latest Income Tax NOA, if your address is mentioned on it.
- Letter from your current employer confirming your residential address.
- Recent letter of correspondence from the government.
Consider These Things Before Opening an Account
- Type of savings account you need: As discussed earlier, it’s the first thing you need to consider before you open an account. With the right type of account, you will be able to earn more returns and, therefore, enjoy more savings.
- Minimum balance requirement: Most savings accounts will require you to maintain a certain minimum balance in your account at all times. Keep an eye on this requirement before you choose any one account. If you don’t meet this requirement, you will be charged a fall-below fee.
- Account facilities: While you must compare the interest rates offered by different banks on your savings, you should also consider what other facilities are being offered. If you often need to transfer funds to someone back in your home country, you should consider an account that offers online transfer facility with low transfer fee.
- Salary crediting: There are some accounts that offer higher interest rates when you credit your salary into that account. Make sure your employer is crediting your salary into that account, if you are planning to open such an account.
- Other fees and charges: Read the fine print to learn about all the fees and charges associated with the account. For instance, most accounts charge an account closure fee if you choose to close the account within the first six months.