Life as a student is challenging. You have to juggle between the ever-growing demands of school, manage your daily expenses and even part-time work during your holidays to supplement your allowance.
As a young student, every dollar counts, and there really isn’t a greater crime than banks taking precious money from broke students in the form of fall below fees.
Fall Below Fees And Monthly Average Balance
Fall below fees eat into your savings silently, if you’re not alert. Fall below fees in Singapore can range from $2 to $7.50 per month.
These fees are deducted automatically when your account’s specified Monthly Average Balance (MAB) falls below a certain level. The MAB is the total sum of daily balance in your account divided by the number of days in the month.
Let’s say that your account’s MAB is $1,000. At the beginning of the month, you have $900, because you withdrew some money for a friend’s 21st birthday gift. Even if you replenished your funds back to $1,000 before the month’s end, you’ll still be charged the fall below fee.
Students would really appreciate a savings account with low/no MAB requirements and fall below fees, which will allow them to make the most out of every dollar.
CIMB FastSaver has no fall below fees or monthly charges, and allows you to earn 1% interest per annum on your MAB that month so long as it is $1,000 and above. This is quite nice, since it incentivises students to build up the habit of not touching their funds, while not penalising them if they do.
OCBC Frank has no initial deposit requirement or MAB for account holders below the age of 26, while giving a more modest 0.2% per annum on the first $10,000.
For both of the above accounts, applicants need to be 16 years of age and above.
Wide Network Of ATMs Conveniently Located
Fall below fees aside, another important feature in savings accounts for students is having a wide network of ATMs conveniently located. Admittedly, with cashless payment and money transfer options like PayNow, having a sudden need for cash on hand is less important.
But for the times when you need to withdraw cash, knowing that you can do so easily is really valuable.
When it comes to ATMs, the DBS-POSB ATM network is by far the most extensive. Thus, the POSB Everyday Savings Account is worth looking at. It doesn’t require any minimum deposit, and has a modest MAB requirement of $500 and fall below fee of $2, though this is waived for applicants under the age of 21.
A runner-up would be the aforementioned OCBC Frank, which allows withdrawals from the shared ATM network between OCBC and UOB, adding to its usefulness.
Building Good Personal Finance Habits Early
While you might scoff at the low dollar value of how much your savings accounts are earning you, know that the good personal finance habits you are building up are far more valuable.
If you can optimise a savings account of $1,000 or $3,000, then you’ll have the same savvy and prudent habits to optimise your funds when you have $10,000 or even $30,000.
Learning to understand the terms and conditions of savings accounts and how interest is earned will place you in a solid position to master other personal finance tools in the future, such as credit cards, investments, and more.