Last Updated on January 11, 2021 by Chin Yi Xuan

Dear readers,

We started 2021 off with a worrying note.

Last week, the number of pandemic infections has been hitting historical highs. Today (11/1), it is likely that the prime minister will announce restrictive measures in hope to improve the situation.

If anything, this pandemic has taught us 2 solid money lessons:

  • Lesson #1: Anything can happen in life. That’s why it’s crucial for us to have an emergency fund in place.
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  • Lesson #2: We can never tell for sure how long a challenging period will continue to drag on. That’s why 3-month of emergency fund is better than none, 6 is better than 3, 12 is better than 6, and so on.

Regardless, it doesn’t seem like 2021 is getting any better (yet) from the pandemic. Hence, it is only wise that you have several months of funds in place to support your expenses if anything were to happen.

Best place to store your emergency funds?

#1: FRANK by OCBC high-interest savings account

FRANK by OCBC is a one-of-a-kind savings account that was released in 2020.

What makes this savings account by OCBC unique from the others is that it offers a straightforward and competitive interest of 1.80% annual interest. This means that users can enjoy the stated interest without the troublesome restrictions/conditions imposed by conventional savings accounts.

Some of the highlights of FRANK by OCBC are:

  • Save Pot & Spend Pot feature: Adjust your money accordingly when you want to save or spend.
  • Earn interest up to 1.80% per annum for money saved on Save Pot + 0.3% per annum for money in Spend Pot.
  • No typical FD lock-in period & withdrawal penalty. Minimum account balance & initial deposit of RM20 (extremely low barrier of entry).
  • Debit card & online banking function. Withdraw money at no extra charges from any ATM by OCBC (Malaysia, SG, Indonesia, HK & Macau)
  • Capital is protected by PIDM up to RM250,000.

Downsides:

  • You’d need to visit an OCBC branch to complete your account-opening process.
  • Relatively lower interest than money market solutions (eg. StashAway Simple)

Personally, I have been using FRANK by OCBC since November last year and I enjoy the no-hassle yield on my savings.

I highly recommend FRANK by OCBC to you if you are looking for a straightforward high-interest account to place your emergency funds.

Read my full review on FRANK by OCBC HERE.

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#2 StashAway Simple

StashAway Simple one of my favorite financial products that was released in 2020.

Essentially, it is an investment solution that invests in money market funds (eg. High-credit-rating short-term debt by institutions and governments) with a projected annual yield of 2.4%.

Some of the highlights of StashAway Simple are:

  • Account opening process is all done online.
  • Earn a projected yield of 2.4%/year. (p.s. Maybank 12-month FD rate is at 1.85%)
  • No minimum balance required – you can start using StashAway Simple at any amount, anytime you want.
  • No lock-in period like FD – deposit & withdraw anytime you want.

Downsides:

  • No capital protection by PIDM.
  • Withdrawal takes around 3 – 4 working days to be processed. This could be an issue if you really need the money in a rush.

I have been using StashAway Simple since June 2020 and I have no problem recommending it to anyone looking for a more flexible FD alternative.

Read my full review on StashAway Simple HERE.

Hopefully the timing of this week’s newsletter is just right for you because it is always a good time to start examining the state of your emergency fund!

Talk soon,

Yi Xuan


Disclaimer: This is just a general sharing. You should always find the financial solution that fits your needs the most. Always seek a licensed financial planner for guidance and professional advice.