Regular savings plans in Singapore: The ultimate guide


Saving money can be daunting for many individuals and families, particularly in Singapore, where the cost of living is high. Fortunately, many different types of savings plans are available to suit various budgets and preferences. 

This ultimate guide will provide an overview of the different options available in Singapore regarding regular savings plans, their benefits, and how they can help you reach your financial goals.

Types of regular savings plans in Singapore

There are numerous types of savings plans in Singapore. These include:

GIRO savings accounts: GIRO (General Interbank Recurring Order) savings accounts offer automated transfers from your salary or designated account into a designated bank account regularly. These recurring deposits are typically made monthly or quarterly and can be used to save for various goals, such as retirement. 

GIRO savings accounts typically offer greater interest rates than regular savings accounts, making them an excellent option for those looking to maximise their returns in the long term.

Insurance savings plans: Different insurance savings plans are available in Singapore that allow you to contribute towards your retirement or other financial goals with regular premiums. These can range from endowment plans, which payout a lump sum at maturity, to whole-life policies, which provide coverage for your lifetime and payout on death.

Unit trusts: Unit trusts are funds managed by professional fund managers and typically invest in stocks and bonds. Unlike traditional savings accounts, which require you to deposit funds into an account, unit trusts require you to make regular contributions to a portfolio of investments.

Benefits of regular savings plans

Regular savings plans offer a range of benefits to savers. Firstly, they provide an easy way to save for future goals and can be automated, so you don’t have to remember to transfer money each month or quarter. Secondly, many regular savings plans offer higher interest rates than traditional bank accounts, allowing for potential returns over time. 

To boot, regular savings plans enable savers to diversify their portfolios and take advantage of different investment options in the market. Finally, regular savings plans are a great way to build discipline when saving money, as the transfers are automatic and disciplined.

Tips for setting up a budget to meet your savings goals

When setting up a budget to meet your savings goals, you must be realistic about what you can save each month. Knowing how much money you need to save for your chosen goal and the timeline you want to achieve it is also essential. Once you have established these parameters, you can decide whether a regular savings plan or another option best suits your circumstances. 

Furthermore, it is worth noting that different types of regular savings plans offer various tax benefits, so it’s wise to review the options carefully and ensure they align with your financial objectives. Lastly, don’t forget to factor in inflation when planning how much money needs to be saved to meet your goals.

How to maximise returns from regular savings plans

When maximising returns from regular savings plans, the key is to take advantage of compound interest. Compound interest occurs when your money earns interest on both principal and previously-earned interest, leading to exponential growth in your wealth over time. To get the most out of a regular saving plan, stick with it for the long run, as this will result in higher gains than if you were to commit only a short period. 

Furthermore, consider transferring funds from other accounts or sources, such as bonus payments, into your regular savings account to maximise your returns. Lastly, continually invest in a product with the best interest rate available.

To that end

Regular savings plans are an excellent way to build wealth over time and reach financial goals that might be difficult or impossible without discipline and commitment. Several regular savings plans in Singapore offer higher returns than traditional bank accounts, as well as tax incentives and the potential for compound interest. 

When setting up a savings plan, it is essential to factor in inflation and consider the best interest rate available on the market. Transferring funds from other sources, such as bonus payments, can maximise returns. Ultimately, regular savings plans are an excellent tool to help you grow your wealth over time and reach your financial goals.