IntroductionHello everyone! Welcome to The Investing Iguana, where we talk about all things related to money and finance. I'm your host, Iggy, and today I'm going to answer a question from one of our viewers. This is what they asked: Is it worth saving money with Maribank with 2.5% interest? MariBank Savings Account: Earn 2.5% p.a. Interest with No Minimum DepositMariBank is a Singapore-based digital bank that offers a savings account with a 2.5% p.a. interest rate, no minimum deposit required, and no salary crediting needed. The interest is credited daily and calculated based on the previous day's balance. There are no transfer fees and fall-below fees for the Mari Savings Account. The average interest rate for savings accounts in Singapore is currently around 0.5% p.a., so MariBank's interest rate is significantly higher. The highest interest rate you can get from a traditional bank is 1.8% p.a., but that usually comes with some conditions, such as maintaining a certain balance or crediting your salary. So, if you're looking for a simple and hassle-free way to earn interest on your savings, MariBank is a good option. However, it's important to note that the interest rate is subject to change. Here are some additional things to keep in mind about MariBank:
How does Maribank afford to pay such a high interest rate?Maribank is able to pay a high interest rate because it operates as a digital-only bank. This means that it has lower operating costs than traditional banks, which do not have to invest in physical branches and ATMs. Maribank also uses advanced technology and data analytics to optimize its lending and investment activities, which generates higher returns for the bank. Is Maribank safe and secure?Yes, Maribank is safe and secure. Your account is protected with the latest encryption technology and transactions are protected by multi-factor authentication. Singapore dollar deposits of non-bank depositors are also insured by the Singapore Deposit Insurance Corporation (SDIC) for up to S$75,000 in aggregate per depositor per Scheme member by law. Maribank Deposit InsuranceThe Singapore Deposit Insurance Corporation (SDIC) insures Singapore dollar deposits of non-bank depositors for up to S$75,000 in aggregate per depositor per Scheme member by law. This means that if Maribank goes bankrupt or gets hacked, you will be able to claim up to S$75,000 for your Singapore dollar deposits. Anything beyond that amount or in other currencies or products is not covered by the insurance. How Inflation Is Eroding Your Savings in SingaporeThe latest data from the Monetary Authority of Singapore (MAS) shows that the annual inflation rate in Singapore was 3.8% in July 2023. This means that the prices of goods and services increased by 3.8% compared to the same month last year. So, if you save money with Maribank with a 2.5% interest rate, you are actually earning less than the inflation rate in Singapore. This means that your money is losing its real value over time and not growing as much as you might think. For example, if you deposit S$10,000 in Maribank today, you can earn S$250 in interest after one year. However, the same amount of money can buy 3.8% less goods and services than it could a year ago. In other words, your real return on your savings is negative. Notwithstanding, this is not unique to Maribank. Any savings account in Singapore will face the same problem of inflation eroding your money’s value. However, some savings accounts might offer higher interest rates than Maribank if you meet certain conditions, such as maintaining a minimum balance, crediting your salary, spending on your credit card, or investing in certain products. You might want to compare different savings accounts and see if any of them can offer you a better deal than Maribank. So, is it worth it?So, is it worth saving money with Maribank with 2.5% interest? Well, based on our analysis, it seems like a good option if you want a simple and hassle-free way to earn interest on your savings without any conditions or fees. However, you also need to be aware of the risks involved, such as the lack of insurance for some products and currencies and the impact of inflation rates on your real returns.
Of course, this is not financial advice and you should always do your own research before making any investment decisions. Maribank is a new player in the market and there might be some issues or changes that we are not aware of. So, always read the fine print and understand the terms and conditions before you sign up for anything. Comments are closed.
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