Sunday 7 April 2013

Best Saving Account - CIMB StarSaver Account

Savings accounts serve the purpose of regular savings and parking your money for later deployment.  When the money gets to a sufficiently large amount, then you could either transfer it to fixed deposit or use it for other investments.

However, the interest rates for saving accounts are almost zero nowadays, most banks offer pathetic interest rates at 0.05% to 0.1% p.a.  Even Standard Chartered's eSaver, which supposed to give higher interest rate than others because the bank does away with all non-essential services like passbook, cheque book and atm/debit cards, has dropped to 0.1% p.a.  There is no longer motivation and incentive to keeping the money there.

After some looking around, I found that CIMB StarSaver Accounts offer the highest interest rates for savings accounts in the market, a massive 0.8% p.a.  The interest rate of StarSaver Account is even higher than some banks' fixed deposit interest rates!

There are 2 types of StarSaver Accounts.  One is a simple plain savings account and the other a checking and savings account.  [For simplicity's sake, I will refer to them as savings account and checking account].

The initial deposit is $1,000 for the savings account and $5,000 for the checking account.  To enjoy 0.8% p.a. interest rate, every month you need to deposit $100 or more for savings account and $500 or more for the checking account.
 

Initial Deposit

StarSaver Checking

StarSaver Savings

S$5,000

S$1,000

Interest Rate

Month-end incremental deposit

StarSaver Checking

StarSaver Savings

0.8% p.a.

S$500 or more

S$100 or more

0.5% p.a.

Less than S$500

Less than S$100

Even if you can't maintain the monthly incremental deposit, there is no penalty fee.  Your interest rate for that month just drops to 0.5% p.a., which is already 10 times better than those banks offering 0.05% p.a.

For convenience's sake, you could also place periodic lump sum deposits that will be automatically converted by CIMB Bank into equal portions.  For example, if you place a lump sum of $3,000 into the StarSaver checking account, it is equal to 6 months of incremental deposits.

I find this monthly incremental deposit a good thing, as it force you into a regular saving habit.

In addition to the 0.8% interest rate, other superior features of StarSaver checking account are the free cheque books and zero checking account maintenance fee.   For comparison, some banks charge $2 a month for maintenance fee and also charge you for each new cheque book issued.

There is a $1 monthly account fee for StarSaver account.  However, you could get it waived by opting for electronic statement.  This save you some money and also is more environmental friendly.

There is one disadvantage with CIMB bank.  CIMB has only 2 branches in Singapore as of today and the few ATM machines that they have are only available at the branches.  So, it is not convenient to withdraw money and do face-to-face banking with them.

However, this disadvantage can also be considered advantage because your savings stay inside your bank account. 

If really necessary, you could transfer your money out from CIMB through internet banking to your other bank accounts, which you can then conveniently access it.  Moreover, the CIMB Orchard branch opens 7 days a week.

As such, I consider CIMB StarSaver Checking account the best for checking and savings purposes.

Do let me know if anyone knows of a better savings and checking account.

17 comments:

  1. Is there a cap on the amount of interest paid out? How would this compare against other saving plans such as Standchart bonus savers?
    http://www.maximiseyourdollar.com/review-standard-chartered-bonussaver/

    ReplyDelete
    Replies
    1. Hi Mathias,

      There is no cap for CIMB Starsaver a/c.

      Standchart Bonus$aver is paying 1.88% (cap at 25K), but it is linked to the World MasterCard credit and/or debit card(s). You have to charge minimum $500 to your credit card every month to enjoy that 1.88%.

      For details:
      http://www.standardchartered.com.sg/personal-banking/deposits/bonussaver/en/faq.html

      Cheers,
      PIF.

      Delete
    2. So if i put in $51,000 upfront in the savings account, does that means i get 0.8% pa on the $51,000 for the next 500 months?

      You can also check out OCBC Bonus + which offers 0.87% pa.
      http://www.maximiseyourdollar.com/review-ocbc-bonus/

      Cheers!

      Delete
    3. Would you be interested in exchanging blog link?

      Delete
    4. Hi Mathias,

      If you put in $51K, you will get 0.8% pa for the whole $51K every month, until the day the bank revises the interest rates, or when your incremental desposit portion is reached. The a/c also comes with free cheque books.

      OCBC Bonus+ works like FD as you cannot withdrawn any cash. But 0.87% pa for FD is nothing fantastic.

      My blog link: http://passiveincomefarmer.blogspot.sg/

      What about yours?

      Cheers,
      PIF.

      Delete
    5. http://www.maximiseyourdollar.com/ :)

      Delete
  2. Thanks for sharing. Get with the 21st century and get free mobile banking with checking Buda, TX.

    ReplyDelete
  3. Thanks for sharing. Fresh grad hoping to save for marriage in hopefully 3 years and trying to save :)

    ReplyDelete
    Replies
    1. Congrats on your marriage in 3 years' time. You do need to save hard for that big plan.

      Cheers,
      Farmer.

      Delete
  4. For transfer of funds to other banks using CIMB internet banking, there's a one time charge of S$20 handling fee for setting up the GIRO standing instruction. Is it true?

    ReplyDelete
    Replies
    1. Hi, friend

      I don't think so. Pls call your CIMB relationship manager to confirm.

      Farmer.

      Delete
  5. Thank you for your great write up! Interested to open up an account already! CIMB.. I can start saving up.. with "can say better than other banks" interest.. but it thought it is 0.8% per annum and not monthly?

    Thanks

    Anderson :)

    ReplyDelete
  6. Do you think this bank is stable if I were to place large sum in fd there? Considering that it is quite a young bank plus it's a malaysia bank.

    ReplyDelete
    Replies
    1. Hi,

      Singapore's Deposit Insurance Scheme (DIS) has been set up to protect the core savings of small depositors in Singapore in the event that a full bank or finance company collapses. $50K is protected.

      Farmer.

      Delete
  7. Does "monthly incremental deposit" mean each month I will have to keep inreasing the amount I put in to save? Eg. 1st month $100, 2nd month $150/200 etc... I've been looking for a good savings account for quite some time now, but am still a student with irregular income. Thanks for the help!

    ReplyDelete
    Replies
    1. Hi,

      Even if you can't maintain the monthly incremental deposit, there is no penalty fee. Your interest rate for that month just drops to 0.5% p.a., which is already 10 times better than those banks offering 0.05% p.a.

      Farmer.

      Delete
  8. It is nice to see an article dedicated to this important topic. Thank you for sharing.
    Super Saver Account Singapore

    ReplyDelete