Key Points:
- With inflation rising, the value of your money can decrease if left in a regular savings account.
- If you're looking for a safe place to park your cash that offers higher interest, there are several options you can consider.
- There are four strategies worth trying, such as high-interest savings accounts and money market funds.
Interested in having a more convincing investment strategy?
Imagine you have money saved in a piggy bank. If you just leave it there, it might lose its value because prices of goods keep going up (this is called inflation). So, to make sure your money grows, here are some strategies you can try.
- Take Advantage of High-Interest Savings Accounts
Think of this like finding a piggy bank that adds extra money every month. For example, you can open an account with the digibank by DBS app and use the Maxi Savings Account, which offers a high interest rate of up to 3% per year. With this interest, your money can grow faster without you having to do anything.
- Park Your Money in Fixed Deposits
Fixed deposits are like putting your money in a safe for a certain period of time. While your money is there, you'll get a higher interest rate. Choose:
- Currency: Indonesian Rupiah or foreign currency
- Tenor: The length of time your money is deposited, ranging from a few months to several years
- Amount: Starting from IDR 1 million
Check the latest interest rates before deciding. Remember, sometimes smaller amounts can yield higher interest.
- Invest in Government Bonds for Regular Payouts
Indonesian Government Bonds are like lending money to the government, and in return, you get a fixed interest. This is a fairly safe way to get regular income. The interest (or coupon) you get can increase each year. If you need money urgently, you can cash out these bonds anytime before maturity without penalty, but the price depends on the market when you sell.
- Park Your Cash in Money Market Funds or Short-Term Funds
Money market funds are like putting your money into a pool managed by experts, where they invest it in short-term, stable, and liquid investments. Usually, they invest in short-term debt instruments such as repos, treasury bills, and commercial paper issued by governments, municipalities, and corporations. Their safety-first characteristic makes money market funds and short-term funds an option for those looking to earn some yield on their surplus funds. But remember, even though they are considered safe, your capital is not guaranteed.
Note: Short-term funds come with slightly higher risk compared to money market funds, but in return, they offer slightly higher potential returns.
