What is a savings account?
According to Investopedia (2018), it is safekeeping box that stores your money offered by the bank. The main incentive of a bank attracts the attention of the customers is by letting you earn interest rates (which is money) by having the money stored in the account for a time period and protection from personal theft or robbery.
In Malaysia, the banking industry is protected by Perbadanan Insurans Deposit Malaysia (PIDM) via the Deposit Insurance System (DIS), where for savers they will be reimbursed by PIDM if the bank you are involved in shut down due to natural or manmade disasters.
The money which you put in the bank (called deposit) can be taken out (called withdraw) any time you want using bank services such as a bank counter, an Automatic Teller Machine (ATM, always accessible to the public even though the bank themselves are closed), phone banking or Internet Banking.
There is also a checking account, which focuses on cheques. But since the numbers involved are usually bigger (except for the Citibank Basic Checking Account which doesn’t require you to deposit anything when it comes to Malaysia) and more importantly, I don’t have a checking account yet.
This article focuses on how to set up a savings account in a simple way, by using the savings accounts in Malaysia provided by Ringgit Plus (2018) or iMoney (2018) as your starting reference.
These steps are for people who don’t have a savings account and is already 18, who at this age has missed the opportunity for having an account for children where some of them include a cash reward for children that excel in their studies. Let us learn from this mistake and provide the next generation children to have a savings account on their own, it’s not like they are able to use this money to purchase items online.
Step 1: Choose The Bank You Want To Work With
Focus on the branch before you pluck out your fruit. Just by looking at the different types of banks and more specifically the types of account would be a chore by itself (some of them are not even applicable to a young adult due to age or the requirement of minimum deposit being comparatively high).
So, choose the bank you want to work with first, between choices of Maybank, CIMB Bank, Public Bank, HSBC Bank, OCBC Bank and many more. Sometimes, if you are in college, you might be forced to have a savings account due to the government needing a way to pay your student loan online, which for me is CIMB even though I already have a saving account in Maybank before.
Protip: During class, I heard even the workers themselves don’t know the full name of the acronyms of the bank they are working in, here are the full names of the type of banks I have listed in.
CIMB-Commerce International Merchant Bankers
HSBC-Hong Kong & Shanghai Banking Corporation
OCBC-Oversea-Chinese Banking Corporation
Step 2: What Type of Account You Want
The types of account developed by banks can be creative when it comes to catering to a specific demographic (in this case, young adults who are studying in college).
Using Maybank as an example, my choices that qualifies the terms & conditions apply include a basic savings account, a variant where hibah (gift) is paid to the depositors, a variant where I can shop online & without having a passbook (a physical book where you record the withdrawal and deposit of your account) and a variant with an ATM locator & auto debit services with a requirement of needing to pay RM50 with a letter of employment.
Protip: For me, a savings account is not a good way to earn you money passively (this job goes to the stock market, peer-to-peer lending websites or royalties from writing books or songs) since the general interest rate of the banks is generally low. According to iMoney (2018), the rate between the usual interest rate in banks is around 0 to 3 percent.
With the most profitable for young adults, the OCBC Booster Account only provided you an interest of 4.45%…yearly and if you have a balance of at least Rm30,000 with a monthly Unit Trust investment at least RM1,500, where the additional 1.2% interest comes from.
Step 3: Prepare Your Documents
You have chosen the type of savings account of your choice, now search the bank of your choice and see the requirement of opening a bank account.
An example: For my choice, a Maybank Basic Savings Account, I would need to prepare my national identity card (myKad) or a passport if you are a foreigner, and supporting documents such as a driver’s license or an employer’s Letter of Confirmation in case your main identification document is not working as intended.
Since this is the age of internet, I am able to apply online, where I would enter my personal information to the corresponding data required such as the Maybank branch (use a Google Map to locate the nearest branch to prepare for the next step), prefered lifestyle/interest and choosing whether I allow Maybank to process my data for marketing purposes.
Step 4: Prepare Before The Visit
When it comes to online application, there is a need for the applicant to wait until the bank is able to successfully process your application.
In the meantime, photocopy your required documents and improve your standard of living for a while until you are informed to visit the nearest branch (which in this Maybank case, I would wait for 4 days before the eventual visit).
Also, prepare the appropriate amount of cash to activate the minimum requirement of your savings account.
Step 5: Follow The Teller’s Instructions
I can’t really follow the online banking experience since when I first received my savings account (as a teenager) the preparation is done by hand and most of the time my family is stuck waiting for a while until our turn (Maybank is popular in Malaysia, so there are many people doing businesses there after all) and I hope that with the Internet application your process would go smoother than I did.
But I am sure that when you are with the teller, follow their instructions and make sure their mood is pleasant since there is no gain being frustrated at the teller for being distracted with processes and interrupting calls, it will just make the whole process go much slower.
As a final note, if you receive a debit card after you received your savings account, change the pin number immediately.
Lim Zhi Weng is a college student. He is currently pursuing his bachelor degree of business administration developed by the University of Greenwich using the Segi College as my base for higher education. His hobby is surfing the internet, reading, writing, listening to music and improving my finance without doing anything physically excruciating, preferring to idly spend my time. His interest in things would be quite consistent, but not as determined when implementing especially when building from scratch is involved. When it comes to business administration, the least difficult part of the course is having to write an essay, where he would search the internet and later academic journals, collect the most important things in their wall of text and develop a conclusion of my own. For the most nerve-wracking aspect, is with trying to work with people, especially when phones and social media is involved, he started to be familiar with Whatsapp, before Twitter is still out of reach. He lives around Kepong, he likes to eat fried rice, he doesn’t want a job in politics because his hands will be bloody.
You can visit his website here.
- CaldWell, M (2018) When To Use a Basic Savings Account. Available at: https://www.thebalance.com/basic-savings-account-2385661 [Accessed: 1st June 2018]
- Intelligent Money (2018) Compare and Find the Best Savings Account in Malaysia. Available at: https://www.imoney.my/savings-account [Accessed: 1st June 2018]
- Investopedia (2018) Savings Account. Available at: https://www.investopedia.com/terms/s/savingsaccount.asp [Accessed: 1st June 2018]
- PIDM (2018) PIDM Home Page. Available at: http://www.pidm.gov.my/en/for-public/deposit-insurance-system-(dis)/what-is-the-deposit-insurance-system-(dis) [Accessed: 1st June 2018]
- RinggitPlus (2018) Best Current Accounts in Malaysia. Available at: https://ringgitplus.com/en/current-account/ [Accessed: 1st June 2018]
- RinggitPlus (2018) Best Savings Accounts in Malaysia. Available at: https://ringgitplus.com/en/savings-account/ [Accessed: 1st June 2018]