A trip to the emergency room, unexpected home repairs, family issues, unplanned travel….these are some unforeseen circumstances that can put a drain on your hard-earned savings.
An emergency fund can help to act as a safety blanket in the event that these unexpected incidents occur, without you having to dip into your regular cash flow, run up a debt on your credit card or request for financing.
So how exactly should you start an emergency fund?
Where can you park your emergency fund?
To ensure your savings are secure and will be readily available when you need it, seek facilities that are:
Safe from market risk. You’ll know your money is secure when you need it the most.
Easy to access. All to ensure you’re able to withdraw the money easily and effortlessly.
Income-earning. Although the reason behind an emergency fund isn’t about making money, you can still capitalize on the opportunity to earn some profit on your savings.
Two popular places you can park your emergency fund:
Fixed Deposits or FDs typically earn higher interest than a typical Savings Account, such as our Fast Fixed Deposit. However, do note that should you withdraw your deposit before the FD matures, you will lose all extra interest that you’ve earned.
If you have an emergency fund already sorted, you’re well ahead of the pack. If not, it’s never too late to start preparing for a rainy day. Don’t hesitate to contact us should you need help with finding the right account for you. It’s better to be safe than sorry!
Important Notes & Disclaimer
This article is brought to you by CIMB as part of our ongoing efforts to raise the level of financial literacy amongst Singaporeans. Financial knowledge and understanding are key to making well-informed and meaningful financial decisions that will improve everyone’s well-being. This in turn, achieves CIMB’s purpose of advancing customers and society.
This is intended for general information only, and does not take into account the specific objectives, financial situation or particular needs of any person. The reader may wish to seek advice from a financial adviser before making a commitment to a product.
Deposit Insurance Scheme
Singapore dollar deposits of non-bank depositors and monies and deposits denominated in Singapore dollars under the Supplementary Retirement Scheme are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law. Foreign currency deposits, dual currency investments, structured deposits and other investment products are not insured.