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What should I do with the $10,000 in my pocket?

Suggestion #1

Take the money out of your pocket. Go to your bedroom. Lift your mattress up. Put money under mattress. Or if you prefer a biscuit tin, that works too.

Interest earned per year: N.A.
Risk of capital loss: low, unless your house gets burglarized.

Suggestion #2

Put it in a CIMB time deposit. Earn 1% for 3-mths or 1.8% for a year. (link)

or

Earn 1.5%-2% bonus interest if you top up your e$aver or open a Xtrasaver account with $6k (link)

or

Start a “high-interest” savings account (link)

Interest earned per year: 0.25%-2%
Risk of capital loss: None

Suggestion #3

Put your money in a money market. One way to do it is through dollardex.com. Opening an account is free and there are no fees for putting or taking your money from a money market fund.

LionGlobal SGD Money Market


It’s 1 week’s performance is currently 0.042.
If it stays at this level, annual yield = 2.184%

It’s 1 month’s performance is currently 0.151.
If it stays at this level, annual yield = 1.812%

Interest earned per year: varies, but generally higher than savings account.
Risk of capital loss: possible, but unlikely.

Suggestion #4

Take a look at the Standard Chartered XtraSaver Account. It’s actually a current account and offers only 0.15% pa interest. Obviously the interest rate isn’t an attractive factor at all. What is attractive about this is that it comes with a Mastercard debit card, and if you maintain a $6k balance per month, every transaction you make with that card gives you 2% back in rebates*!

$10k in UOB High Yield

So if you currently had $10,000, and lets say you would to put it into a UOB High Yield Account at 0.55% pa, you would only earn $55 in interest a year.

$10k in various accouts

If you were to maintain $6k in Xtrasaver for a year (interest at 0.15% = $9) and the balance $4k in a UOB High Yield or NTUC Fairprice Plus** ($20-22), and you charge just an additional $1300*** onto your card through out the year, you would have already earned $55 in interest. If you charge anything else on that card, you would have effectively beat the ‘highest interest accounts’ currently listed on that page. You can play around with this calculator to see if it’s worth trying it out:

Most of us would make over $1300, be it for clothes, holidays or outside dining, so why not take advantage of the 2% rebate?

* Don’t charge your petrol purchases on this card (if any). If not you will not get back 2% – it’ll be lower. Other bank cards have better tie ups for petrol discounts.
** I personally would choose NTUC Fairprice plus over UOB High Yield. Historically so far, NTUC has been slow to lower it’s interest rates, and in terms of web interface, internet banking on NTUC’s site is a lot more friendly than UOB’s.In my opinion, there’s no point chasing bank interest rates with them changing so often. I would like to offer another suggestion instead. Take a look at the Standard Chartered XtraSaver Account.
*** $1300 has to be on top of your existing $6,000.

Interest earned per year: 0.5% and above
Risk of capital loss: None

Suggestion #5

Do you currently have minimum sum in your CPF? Have you maxed out your current year’s CPF contributions, and are you nearing 55 years old?

Why not consider contributing the $10k into your CPF account, and then transferring that sum into your SA? You’ll earn about 4% pa, and at 55, you can take that cash out after leaving your minimum sum in. What’s more, all contributions to CPF are tax deductable, so you are effectively earning more than 4%.

Of course this only makes sense if you are close to retirement (ie. less than 5 years).

Interest earned per year: approx 4%
Risk of capital loss: None

In general, all the above suggestions do not beat inflation, so it should be used for money you need within the near term (ie 5 years or less). Invest the rest of your money prudently, or you may find that inflation would eat up your savings!

Do you have a tip on where to stash $10,000 in cash?

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