Best places to save for short term goals

Lee Siew Ching, savings

Account with high liquidity and preferably with principal preservation.

What are short term savings goals?

For the immediate term, money that you may need to access immediately is emergency savings. It is recommended to have 3 to 6 months of expenses as emergency savings.

For the short term, it could be for money goals within the next 1 to 2 years. For example, house down payment, wedding and overseas vacation.

Where is the best place to save for the short term?

  1. High interest savings account
    Besides basic savings accounts that offer almost zero interest, there are several savings accounts that offer high interest rates after certain conditions are met to unlock the interest. For example, OCBC 360 with 2.75% maximum interest (0.05% Base rate + 0.90% Deposit at least RM500 every month + 0.90% Pay at least 3 bills online every month + 0.9% Spend at least RM500 on your OCBC card every month). Check out comparisons of high interest savings accounts from financial comparison websites such as RinggitPlus and iMoney.

  2. Fixed deposit
    A Fixed Deposit account (FD) is a financial instrument offered by banks, which allows you to save your money for a fixed period of time to generate higher interest compared to a conventional savings account. Take advantage of FD promotions. I personally prefer direct straightforward FD over bundle campaign.

  3. Money market fund
    Money market fund is a type of mutual fund that invests in low risk, highly liquid, short-term cash equivalent instruments and fixed deposits. Today, there are many digital MMF platforms to choose from like Versa Cash, KDI Save and many more.

    Use my referral code to get bonus.

    • Versa: WUXMCQBR (deposit RM100 to get RM10 bonus)
    • KDI:108879 (invest RM250 into KDI Invest to get RM10 bonus)

Final note

Short term savings is not an investment. It’s a place to park your cash so you can access it immediately if you need to.

Long term savings is best to invest in assets that historically delivered returns that outpace inflation over time such as unit trust. Read more about investing in unit trust here.

© Lee Siew Ching.RSS