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A Savings Account for National Servicemen (NSFs)

Update: I made some changes in the post below, reflecting some of the information that was not written previously and made existing information clearer. As of 2/7/16. 

Good news for us in NS! Other than putting the allowance into other savings accounts that offer meagre interest rates, we have this option now! An option to save for the 2 years or 22 months of service.

Introducing the POSB Save As You Earn (SAYE) account.

I was truly excited for this when I got wind of this. Looking deeper, I made some comparison. I thought the CIMB FastSaver might serve as a useful comparison as well. 


1. Saving

At the end of 2 years

  • Good for new enlistees who just wants to save a fixed amount every month and not do anything with it until they ORD. It gives fixed deposit rates for small amounts.
  • Note: This works like a 24-month fixed deposit,  so you will lose the 2% cash gift interest if you withdraw the sum. So do make sure you are comfortable with the amount being put in and go with it for the long haul.
2. Shopping
  • If you shop often, then you have those rebates so long as you have those cards. 
3. Cash Gift
  • More for new enlistees, you will have to decide if you would like the Home-TeamNS-POSB Debit Card or SAFRA DBS Debit. Those cards come with membership fees. Of course, if you are already intending to get either one, then this cash gift is a bonus.  
  • Existing SAFRA/HomeTeamNS card members do get the $30 cash gift too! 
CIMB FastSaver 

  • You don't have to "lock" the savings up and already get 1% from the get-go. 
  • There is a minimum initial deposit of $1000 to open the account. You also need to have a balance of $1000 in order to have interest paid, though. 
  • There are no ATM cards and no cash rebates for this account. You might also derail from your savings goal and feel the urge to spend since it is convenient to transfer between banks. 
Compared to POSB SAYE

CIMB FastSaver
Initial Amount: $1000 
Monthly Deposit: $100 
At the end of 2 years, 
Principal Amount: $3400  
Interest: $45.35 

Assuming the cash gift interest of 2% and not including the standard interest rates which can be accessed here
Initial Amount: $0 
Monthly Deposit: $100 
At the end of 2 years, 
Principal Amount: $2400  
Cash gift Interest: $51.80

POSB SAYE offers around $5 more. 

My personal thoughts

For the fresh enlistees, this will make perfect sense. If I am a fresh enlistee, I will sign up for POSB SAYE definitely. I can lock it up and forget about it until 2 years later. Probably transfer extra savings to POSB so that I can increase the monthly contribution. Don't transfer emergency funds to SAYE too, if you find yourself needing the cash, you are going to waste the effort. 

For existing enlistees, probably not worth it since time is not on our side. I have around 15 months of service left. Let's say I am to open a FastSaver SAYE account now, assuming $100 monthly contribution, at the end of 15 months, the interest will be $2.50 more. I would prefer to just keep it in FastSaver throughout and save the trouble since the 2% cash gift will not be applicable after ORD. 

With that said, I think the decision will lie on whether you want the HomeTeamNS or SAFRA cards if you don't have either one yet. The $30 cash gift, in a way, can then subsidise the costs. 

Fellow and future servicemen, please do your OWN homework for this! It's your hard-earned allowance! 

Till next time, 
Mr K. 


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