I heard that y’all have a problem with spending your savings away, is that right? Despite your best intentions to save money, that company’s marketing campaign caught you at a bad time and there you are, nursing the most horrible buyer’s remorse.
Note that I didn’t name this article, Best Places to Invest Money in Malaysia. It’s Best Places to Save Money in Malaysia. Emphasis on saving money.
Therefore, all the options in this list MUST either be cash or can be quickly converted/sold into cash without losing much value. In investing-speak, we call this ‘liquid’.
According to Google image search, ‘liquid investment’ is also a tap that drips dollar signs, coins and banknotes. I can confirm this depiction is 100% accurate.
With that clarified, let’s go ahead and rank the best places to save money in Malaysia. The ranking order is decided by myself, but let me know if you have opinions – open to compelling arguments.
#1 – Mutual funds, unit trusts and roboadvisory platforms without withdrawal fees or ‘locking period’
The first place I would suggest you to keep your money is in mutual funds, unit trusts and roboadvisory platforms without withdrawal fees or locking period. I like these because not only I am saving money but also I can take the money out at any time, AND the money tends to grow if you leave it there long enough. Best of all worlds!
Personally, I use my ASB (Amanah Saham Bumiputera) as my primary out-of-reach savings account. Whenever I get extra money, I channel it there so I ‘forget’ about it. Whenever I have cashflow issues, I would withdraw money from the account, use it to make payments, then ‘reimburse’ myself at the next available opportunity.
Cashflow issue. Money that is supposed to come in haven’t come in yet. Had to withdraw from Asb to make pending payments. Ughhh stressnyaaaa
— Suraya Zainudin (@surayaror) September 10, 2019
I understand ASB is not available or hard to get for everyone, so here’s the second, almost as good option – roboadvisory platforms, which I use as my secondary out-of-reach savings account.
As of time of writing, I’ve used Wahed Invest for 3 months and so far, so good! You don’t have to use the same roboadvisory platform – others like Stashaway and Mytheo do not impose withdrawal fees, too.
If you decide to use Wahed Invest as well, don’t forget to insert my referral code ‘surbin1‘ for $5/RM20 bonus! At 0.79%, they currently offer the lowest fee among roboadvisory platforms in Malaysia for funds under RM50,000.
EDIT: Thanks Wan for reminding about Tabung Haji. That option works too. Withdrawal fee to bank accounts is just RM1 (if Maybank, not sure of other banks).
So yes to ASB, roboadvisory platforms and Tabung Haji. I can’t really put any other mutual funds and unit trusts as #1. Not even your investment-linked insurance. They will either:
- Lock up your money until retirement – EPF and PRS (Private Retirement Scheme, kinda like secondary, optional EPF)
- Even *if* they say they don’t charge withdrawal fees, many unit trusts and mutual funds will impose a combination of these 9 types of fees
EDIT: In June 2020, Stashaway launched a new product called Stashaway Simple, which serves as cash management portfolio. This is an option too
#2 – High-interest savings account
In addition to #1, you can make use of high-interest savings account offered by various banks to keep your money.
The money in there is not really locked away – a blessing and a curse tbh. If you find yourself ‘dipping’ into your own savings account too often, then may I suggest you to:
- Open an account with another bank and hide the debit card
- Use other methods in this list
But otherwise, many people find high-interest savings accounts a good financial tool for saving money. Some people open separate savings accounts for:
- Marriage fund
- Car fund
- Travel fund
- Fun fund
- And more
Which high-interest savings account to get? Suyin here gives 3 options, up to 3.25% per annum.
Personally I use the Maybank2u Saver account. Only because I’m an existing Maybank user and I’m lazy to open accounts in other banks, but it’s pretty good. Every month I get a little bit of money just for keeping extra funds in there.
#3 – Fixed deposit
The third best place to save money in Malaysia, IMO is fixed deposits or FDs. It’s funny because here, ‘locking up’ your money and not being able to access it for a time period is not a bug, its a feature. If you need a financial tool that will PENALISE you for taking out your own money before the contract ends, then FDs is for you.
Selecting one is super easy. You can use financial comparison platforms to make comparisons. Ideally you want the one that offers the highest interest rates, but bear in mind how long you’re locking your money for, and the minimum deposit you need.
iMoney makes it easy to find Islamic FDs too. You can just enable the button in the red box, the one that says ‘Show Islamic Products Only’
#4 – Gold
I wouldn’t have included gold here as an option if not from this contribution by Sams, in the 4 Things You Can Do If You Need Money URGENTLY in Malaysia article.
Sams – (I would) take my gold bar – purposely bought for emergency situation like this – to Ar-Rahnu. With them, I’m able to get a loan worth 60%~70% from the the current market gold price. They charge 0.07% per month in fees (note: fees may vary).
I’ve done this a lot when I need to renew car insurance, repair car breakdown, cover medical bills and more. By using Ar-Rahnu or pawnshop service, always try to redeem your gold as fast as possible, to avoid more charge (‘upah simpan’). The good thing about this method, you are able to get your gold back once you redeem it thus maintaining your asset.
Example calculation: 10g gold bar 10g x RM190 x 60% = RM1140 | Fees – RM1140 x 0.7% = RM7.98 per month
Otherwise, keeping gold *on top* of #1, #2 and #3 is not a bad idea too. If you happened to buy your gold at a good time, then you’d make a nice profit when you sell it. Not guaranteed, but there is that excitement.
Gold savings or gold investment is… a bit polarising, in my observation. People either love it or hate it. Read up my various articles on gold investment if you’re interested in it, I’m not trying to change anyone’s mind.
Personally, I love the experience of owning gold. Like many people, I bought some gold with the ‘trader’ mentality – heard that gold prices went up from the news and just wanted to make a quick buck. Over time, it prepared me for price flunctuations and taught me how demand/supply works in the world market.
If it weren’t for gold, I wouldn’t be brave enough to dip my toes in higher-risk, higher-rewards investments like stocks and even crypto. But that’s just me.
#5 – Keeping foreign currencies
And last but not least, you can also keep your extra money in other country’s notes. Especially ‘valuable’ ones like the US Dollar, Euro, Japanese Yen and British Pounds.
How it works is simple: simply keep them somewhere safe. If you need the cash, you can simply go to money exchangers and convert them foreign notes back to RM. If
you’re good at macroeconomics luck is to your favour, the USD you kept may have strengthen against the RM.
(You can compare rates from different money exchangers online. Try and avoid banks as their exchange rates are not the best)
#6 – Keep your money in cash
Once, I witnessed a young woman breaking down at an LRT station after she was informed her room was broken into and all her savings were gone. You probably have experienced this yourself, or know someone who had their money stolen this way.
I did, too, when I was younger. Hid some money in my room. It was stolen by my own family member.
(I’m embarassed to admit I used to steal my mom’s money as well. Mak, Aya minta maaf!)
Please be careful when you save money with methods #4 (Gold), #5 (Foreign currencies) and in cash (RM). Please keep them safe, or avoid them totally, especially if you live in a high-crime area. Use the other methods in this list.
Where would YOU save your money?
Are there any other good places to save money in Malaysia? Which methods do YOU personally use to save your money? Do you double up your savings with investment, like I did with ASB and roboadvisory platform? Do you have bad experience with any of these methods? Do you agree or disagree with the ranking?
Let me know in the comments section, I’d love to hear from you!