Here Are the Finance Accounts You Need to Open Now: Your Future Self Will Thank You!
Ever missed out on something great just because you didn’t hear about it?
Yep, me too!
But fret not, at least when it comes to personal finance!
I’m here to give you a headstart on all the essential (and time-sensitive) personal finance accounts so you won’t miss out and regret it later!
TL;DR: Personal Finance Accounts You Need to Open Now
Here is the list of accounts you should open asap to get a headstart in your personal finance journey in order of time sensitivity:
- Standard Chartered JumpStart Account
- Supplementary Retirement Scheme (SRS) Account
- Central Depository Account (CDP) Account
Bonus
Standard Chartered JumpStart Account
It’s safe to say that most of us would already have a bank account as a student, usually with POSB/DBS since we were kids. However, the POSB/DBS My Account has low interest rates.
And while you can convert your My Account into a DBS Multiplier account or open another high-interest savings account, there are many hoops to jump through to earn higher interest.
Why should you open a Standard Chartered JumpStart Account now?
With the Standard Chartered JumpStart Account, all you need to do is deposit and you can earn 2% p.a. (on your account balances of up to $20,000) fuss-free!
This is an amazing savings account to open especially for fresh graduates to grow your savings with very competitive interest rates.
The only caveat is that you have to be between 18 to 26 years old to open the account, which is why this is the most time-sensitive account to open now. Once you open a JumpStart account, you will be able to keep it and enjoy the prevailing interest on your balance even after you turn 26 years old.
Plus, even if you open another bank account for higher interest, you can still keep this account to use as a separate emergency funds savings account.
Standard Chartered JumpStart Account Details
- Minimum initial deposit: $0
- Minimum daily balance: $0
- Monthly fall below fee: $0
- Bonus interest cap: $20,000
Supplementary Retirement Scheme (SRS) Account
The retirement age of Singaporeans has increased over the years and is currently 63.
However, this is set to change by 2030 with a retirement age of 65!
Why should you open an SRS account now?
One of the main points of opening an SRS account is to lock in your retirement age at 63, before it rises further!
You’ll only need to top up $1 into your SRS account to lock in your retirement age.
Moreover, an SRS account has the following benefits:
- Reduce your taxable income by up to $15,300 every year for Singaporeans and $35,700 a year for foreigners
- note that the annual personal income tax relief cap of $80,000 applies
- Invest your SRS monies and enjoy tax-free returns
- Currently, you will only need to pay personal income taxes if you earn more than $20,000 per year. When you retire and do not have any personal taxable income, you can withdraw up to $40,000 per year from your SRS account tax-free on or after reaching the statutory retirement age (63 years old in 2022). That’s $400,000 over 10 years tax-free.
For a more in-depth look at the SRS account, check out this article which includes a step-by-step guide on how to open one:
Central Depository Account (CDP) Account
At some point in your personal finance journey, you would be investing your monies to grow your savings.
And one of the most important accounts that you’ll need is the Central Depository Account!
Why should you open a CDP account now?
A CDP account safeguards the stocks and bonds purchased through the Singapore stock market.
But more importantly, it is a prerequisite to investing in Singapore Government Securities such as the popular Singapore Savings Bonds and T-bills.
Last I heard, CDP account opening wait times have increased due to the exploding popularity of the above-mentioned investments.
So unless you foresee yourself never investing in Singapore investment products, it’s better to apply sooner rather than later!
Bonus: Singpass Account
While this might sound like a no-brainer to some, there may be some of us who have yet to sign up for a Singpass account.
Why should you open a Singpass account now?
Aside from being a digital identity center for Singaporeans, a Singpass account saves you quite a bit of time when you sign up for personal finance accounts such as bank accounts and brokerage accounts.
It’s a great way to “pre-fill” your information when you sign up for financial products with MyInfo on the Singpass app.
You can download Singpass on the Google Play Store, Apple App Store, and Huawei App Gallery.
Bonus: Brokerage/Robo-Advisor Accounts
Aside from opening a CDP account to invest your money, you’ll also have to open a brokerage and/or robo-advisor account to access the stock market.
Why should you open a brokerage/robo-advisor account now?
While this isn’t really an urgent thing to do, you can start looking out for account opening promotions and take advantage of the rather generous rewards.
I’ve personally earned hundreds of dollars with promotions just by opening broker accounts, depositing money (usually $2,000), and doing some small trades.
Moreover, it’s a great way to familiarise yourself with the various investing terms that you’ll encounter in such apps.
But of course, there is a bit of a time investment for this as you’ll need to know what you’re doing.
So if you’re still brand new to investing and personal finance, you can hold off on this but you’re bound to open one anyway.
