Friday, December 1, 2023

Lock-Up Savings Accounts: An Idea To Stash Your Emergency Fund?

In response to the prevalence of online scams, the three major local banks DBS, OCBC and UOB had introduced lock-up savings accounts, where you could park your monies safely and they could only be withdrawn via physical means (either in person over-the-counter and/or ATMs – automated teller machines). 

Since the roll-out was just a couple of days ago, you could find out more from the respective banks (click DBS , OCBC , UOB).


Whilst reading up on the lock-up accounts, an idea sprang up: why not use them for starting up an emergency fund?


The gist is simple; the idea of the emergency fund is to tide over unexpected situations in life, such as sickness, unemployment of just about anything that would eat into your money. The advantages are two-fold: there is a behavioral disincentive in touching the fund, thus it is protected against frivolous spending, and the lock-down can also protect against scammers wiping clean your monies. 


However, as sometimes spillovers from the set quotas in the emergency fund are used to fuel investments and/or other savings, it would be a slight hassle to do the non-digital way of withdrawing. But hey, at least one could experience nostalgia by learning how to use an ATM and/or encountering the goings-on within the bank branch. 

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