High interest saving accounts are the most sought after in Malaysia but it comes with a price.
Let us explain. First of all, a high interest savings account offers everything that we love in a typical savings account: reliability, safety, and easy withdrawal. What sets it apart is that it yields high interest.
Yet, like with all things that seem to be too good to be true, it’s important to read the fine print. Owning a high interest savings account may not be for everyone. It comes with its own set of terms and conditions, requiring customers to go above and beyond. Before you decide to apply for a high interest savings account, let’s go through these requirements and see whether it is the best fit for you.
Requires a high minimum deposit to create an account
To open a high yield savings account in Malaysia, banks require customers to make a minimum deposit which can start from RM200. Without sufficient funds, you will need to save your money first – losing the opportunity to earn additional money through interest from the get-go.
Requires a minimum balance to get high interest
To unlock the highest interest rates, you need to maintain a minimum balance – usually above RM10,000. For example, the UOB Stash Account which offers a high yield of 2.30% requires you to maintain a minimum balance above RM100,000. There’s an underlying risk of losing interest if you are forced to take out your money for emergencies or to make important payments.
Requires you to pay and spend frequently
Each bank has a different set of requirements for users to qualify for high interest, depending on the services provided. It’s important to go through the terms and conditions before deciding to open a high interest savings account. Unfortunately for many, it’s unlikely for customers to qualify for high interest immediately, therefore losing potential interest from the beginning.
To qualify for a high yield savings account, you must carry out certain activities each month. The general concept is “Save, Pay, Spend” – such as making at least 3 retail transactions on your debit card or depositing a certain amount of money each month. As many of these requirements require you to spend money, a high interest savings account may not be a feasible choice if you’re planning to grow your savings.
Comparison of High Yield Interest Savings Accounts in Malaysia
| Savings Account | Base / Max Interest Rate | Minimum Conditions |
|---|---|---|
| Standard Chartered Privilege $aver |
0.05% – 4.30% p.a. |
● Deposit RM3,000 monthly ● Spend RM1,000 on your credit card monthly ● Make at least five retail transactions on your debit card monthly ● Invest or insure at least RM30,000 during the month |
|
RHB Smart Account |
0.05% – 2.85% p.a. |
● Save RM2,000 monthly ● Pay three bills online monthly ● Spend a minimum of RM1,000 with your credit or debit card monthly |
|
UOB Stash Account |
0.05% – 2.30% p.a. | ● Maintain a balance above RM100,000 |
|
Hong Leong Bank Pay & Save Account |
0% – 2.25% p.a. |
● Deposit at least RM2,000 in a single transaction monthly for three consecutive months ● Spend at least RM500 with your debit card monthly ● Pay at least RM500 online on your bills, loans or credit card monthly |
|
Alliance SavePlus Account |
0% – 2.25% p.a. |
Maintain a balance above RM400,000 |
|
OCBC 360 Account |
0.05% – 2.15% p.a. | ● Deposit RM500 ● Pay at least three bills online ● Spend at least RM500 on your OCBC card(s) |
|
UOB ONE Account |
0.10% – 2.15% p.a. |
● RM50,000 in your account ● Spend a minimum of RM500 with your credit or debit card per month ● Pay at least three bills (minimum RM50 per bill) ● Deposit RM2,000 a month. |
*as of April 2021
Annual fees and transaction costs
There may be hidden fees, so it is important to inquire about additional fees such as account closure fees or online transaction fees. Moreover, savings accounts have transaction fees differing by the bank. For example, the bank may charge 10 cents for interbank GIRO (IBG), RM2 for instant IBG, and RM1 per withdrawal at the ATM of a different bank.
Choosing the best high interest savings account in Malaysia
Despite the large selection of high interest savings accounts available in Malaysia, it comes down to whether or not you have the means to fulfill the high requirements.
The best alternatives to high yield savings accounts
There are fixed deposits which offer a higher interest rate than savings accounts. However, consider the fact that fixed deposits have a lock-in period and lack the same liquidity as a savings account. Without the flexibility to withdraw your funds, you may find yourself strapped for cash in times of emergency.
Luckily, another good alternative is money market funds. Money market funds offer potentially higher interest rates, on par with fixed deposits. It gives you the flexibility to withdraw anytime with no hidden charges. Money market funds make a great choice if you do not own huge funds or are uninterested in making monthly payments to qualify for higher interest.
If this is a great fit for you, then why not get started with Versa? It is a digital cash management platform that invests your funds in low-risk and highly liquid assets. By just saving a minimum of RM 1 with Versa, you are already eligible for higher interest rates from the get-go (2.46% p.a. as of 31 Dec 2020)! You won’t have to go through the hassle of saving, paying, and spending. Instead, you will get to Save, Earn and Duit your Way!