Put Your Emergency Fund In These Special Savings Accounts
We’ve been talking about building our emergency fund to shield us from financial worries should any change in our current financial status changes. At the moment, your emergency fund is most likely stashed in an interest-earning passbook savings account, which is all good. However, we’ve also been talking about making our money work for us and we’ve started exploring special savings as a way to make our money work harder and grow.
I’m putting forward the idea that you should put your emergency fund money in a special savings account. Why? Two reasons: first, since you’re not going to touch this money anyway unless absolutely necessary, why don’t you stash it away so that you really won’t be tempted to use it. Also, you don’t want to make it too inaccessible, like a time-deposit, which you can only access without charges at the end of the term.
Let’s assume that your emergency fund is at least 100,000 pesos. I’ve searched for some of the special savings products in the market offering the most competitive rates for this amount and one of them is Chinatrust Commercial Banking Corporation’s Ultimate Earner savings account. As of August 6, 2010, the interest rate for deposits with an average balance of 50,000-499,999.99 pesos is 2.45% per annum. You may open an account for as low as 5,000 pesos, maintaining balance is 10,000 pesos and balance to earn interest is 50,000. Since interests are tiered, the higher you save, the higher you earn.
ChinaBank always makes it to our market survey because they offer products that are accessible and rates that are competitive. Their special savings product, MoneyPlus Savings, requires 20,000 pesos to open, maintain and earn interest. Interest is also tiered with 1.125% per annum for deposit of 20,000 to 99,999.99 and 1.25% per annum for deposit of 100,000 to 499,999.99 pesos. A maximum of 2 withdrawals is allowed per month.
Security Bank’s special savings product, “Build-Up Savings Account”, may be opened with a little as 10,000 pesos and will earn interest for as low as that amount. It’s rate of 2% is also very competitive. Maximum number of withdrawals is 3 per quarter.
Almost all banks offer a special savings product. Before you open one, remember to ask how much the interest rate it and how many withdrawals are allowed per month. Always get the product that will give you the most benefits.