The death of savings accounts?

With Standard Chartered and DBS cutting their interest rates yet again from this month onwards, is there really a point in putting money in savings accounts anymore?

I use DBS Multiplier account as my main account and Standard Chartered JumpStart account for mandatory savings. It is the only two banks that I currently have savings accounts with. I also place some funds in FSMOne Auto-Sweep account and multi-currency cash account (though the latter is mainly for my USD and HKD denominated investments).

Not proud to say this but I’m actually pretty cash poor – so I don’t face the “problem” of having to hunt for several high yield savings accounts or fixed deposits to park my idle or excess funds after maxing out the cap.

I am writing this post as an exercise to decide whether I should consolidate my money in fewer accounts or spread them across several places, such as the recently launched Cash+ portfolio by Syfe which boasts a 1.75% return.

Pros of consolidation:

  • Potentially higher interest received in dollars despite lower % due to higher overall amount
  • Easier to track total available cash flow instead of managing multiple accounts
  • Highly liquid and available immediately when required

Cons of doing so:

  • No segregation between savings and expenses which may lead to overspending
  • Unable to maximise interests/returns from various financial providers
  • Placing all eggs in one basket (technically local banks are a pretty strong basket but not sure about other financial institutions that offer generous promotions)

Despite all this talk about nerfed interest rates, I still believe that people will continue to put money in banks, myself included. It really is quite hard to beat the liquidity and ease of use of a savings account.

I have funds in FMSOne cash management account but cashing out the money is not immediate and takes up to three days. Furthermore, FSMOne is not technically a bank so how safe exactly is it to place a large portion of my savings there?

With the rise of many financial providers offering rather attractive but unconventional and unique quasi/hybrid savings cum insurance cum spending solutions, perhaps its time for me to turn to those. However a part of me still feels some distrust towards them as well as reluctance to manage my money in so many places.

Or perhaps the next best option would be to stash my cold hard cash in a biscuit tin like the generations before us did for an absolute peace of mind.

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