Let’s assume you earn a good salary and/or have low expenses, and you need a place to put 3-6 months’ worth of living expenses (Step 3 in the road to financial freedom). The question now is, which are the best savings accounts in Malaysia, that you can use to keep your emergency funds safe?
Here are 6 savings accounts in Malaysia that you can consider.
Note: This article is about the best savings accounts in Malaysia to keep your emergency funds. Emphasis on emergency. Therefore, all the options on 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’.
(p/s – 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 – ASB / Tabung Haji
Personally, I use my ASB (Amanah Saham Bumiputera) as my primary out-of-reach savings account. Whenever I get extra money, I keep it there instead of leave it in my bank account so I ‘forget’ about it.
Unfortunately, ASB is not available for non-Bumi. The next best alternative for non-Bumi is ASM (but it’s really hard to get). EDIT: Thanks Wan for reminding me about Tabung Haji, which is usually used by Muslims to save money for hajj, but is open to Muslims from any background.
ASB and Tabung Haji are examples of mutual fund/unit trust (technically considered different things, but used interchangeably in Malaysia).
Is unit trust a good place to save money in Malaysia?
I’d say other mutual funds/unit trusts are not as great for short-term savings purposes, because they:
- Lock up your money until retirement – case in point, EPF and PRS (Private Retirement Scheme, kinda like secondary, optional EPF)
- Charge you a lot of fees. Many unit trusts and mutual funds will impose a combination of these 9 types of fees.
You’re better off saving your money in #2-6 in this list.
How to withdraw ASB online
Withdrawing money from ASB is easy. You can go to the bank or to the post office and make a request at the counter.
The more convenient method is to submit the request to withdraw ASB online from myASNB portal or app. It’s a simple enough process yet mafan enough to do that (hopefully) you’ll only take your savings out only if you really want to.
#2 – High-interest savings account (HISA)
Another option to keep your emergency funds is HISA – that’s short for high-interest savings account.
Which high-interest savings account in Malaysia is the best depends on bank promos at the time. Check out the HISA comparison article by RinggitPlus.
The thing about HISA 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, or
- 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
#3 – Fixed deposit
The third place to save money in Malaysia 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, it’s 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 find options at your bank, or use financial comparison platforms. Ideally you want the one that offers the highest interest rates, but keep 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 – Cash Management Platforms
Cash management platforms are like fixed deposits, except WITHOUT the lock-in clause. Therefore, this makes them arguably better than fixed deposits.
As of the time of writing, there are 4 options for cash management platform:
All four are good options. Pick the one that gives the highest rates and/or have sign-up bonus for new users.
#5 – Gold Savings Accounts
Gold as savings 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, I’m not trying to change anyone’s mind. Despite what the agents say, it’s ok to not have gold at all, and just do #1-4.
But if you do want gold, and are aware that (1) gold price fluctuates (so you only put 5-15% of your assets in gold, not ALL of it) and (2) there is cost to buy/sell/keep the gold, then you can consider it.
Some gold savings accounts in Malaysia include:
Note that all the options above are digital gold.
Otherwise, physical gold can also act as emergency savings. Credit to 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
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 fluctuations 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.
#6 – 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. These are not ‘savings account’ in the literal sense, but rather if you feel keeping all your money in RM is risky.
How it works is simple: convert your excess RM into foreign currencies. If you need the cash, you can simply convert them back to RM. If
you’re good at macroeconomics luck is in your favour, the foreign currencies you kept may have strengthened against the RM.
(The reverse is true. It’s absolutely possible that the currencies may weakened against the RM. In this case, you would get less RM than what you started with)
The best place to keep foreign currencies, in my opinion, is via the Wise multi-currency account. You can hold 53 different currencies, and it even comes with a debit card so you can spend it easily.
#7 – 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 embarrassed 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 #5 (Gold), #6 (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.
Now that you know where are the best savings accounts in Malaysia, we also have to cover the obvious fact that…
You can only save for rainy days if you earn enough
How to save money if you are making less than a living wage and/or your commitments are high, and everything you earn goes to necessities? You can’t.
This article is for those of you who are earning more than your core expenses, your financial commitments. If you are not, I’m sorry to say but you have no choice but to earn more, either from earning side income or from jobs with higher salaries. You may also try to increase your savings rate by radically save money on accommodation and food.
Forget all the ‘how to save more money’ advice – first of all, you probably are already good at budgeting, because you NEED to. Secondly, you can’t frugal your way out of low-income lifestyle. If unexpected emergency situations don’t kill you, rising cost of living will.
I realise this is easier said than done for some folks. Unfortunately, the system is not fair and unlikely to change. I can only wish you luck and hope you have the perseverance to make it.
Where would YOU save your money?
Are there any other best savings accounts in Malaysia that’s not in this list? Which methods do YOU personally use to save your money? 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!