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Growing up, we would likely have a savings account where we can safekeep our allowance from our parents, internship or part-time jobs. As we grow older and enter the workforce, we may continue using the same savings account to receive salaries and make cash withdrawals from.
However as our savings grow and our requirements change, having just one savings account may not be sufficient for the various needs we have. For example, once we start our investment journey, it’s ideal to have a savings account that acts as our designated savings account for investment purposes.
Keep Your Investment Monies Separate From Savings Meant For Other Purposes
The main reason for having a separate savings account for investment purposes is to differentiate between our funds that are set aside for investing from savings that are meant for other purposes such as future big-ticket purchases and emergency usage. Such a savings account will also allow our investment returns such as dividends or proceeds from the sales of stocks and bonds to be deposited into this designated savings account for investment purposes.
Ideally, we would want this designated savings account to provide us with tangible benefits. These would include bonus interests, cashback benefits and even cash reward for maintaining a higher average account balance. While these added incentives may not be the primary reason to keep our investment monies in the account, it’s still a benefit that we shouldn’t ignore.
A Multi-Currency Account Allows For Ease Of Foreign Investment
More importantly, this designated savings account for investment purposes that we have should ideally be a multi-currency account. This will allow us to pay and receive money in foreign currencies when we buy and sell overseas stocks.
For example, if we purchase stocks in the US, we may pay in US Dollar (USD). If we want to invest on the Hong Kong Exchange, we pay in Hong Kong Dollar (HKD). A multi-currency account allows us to hold the foreign currencies that we need to make our investments that are denominated in foreign currencies. And even if we don’t intend to make an investment immediately, we can also convert our Singapore Dollar (SGD) to foreign currencies and keep in our multi-currency account whenever we feel that the exchange rate is favourable.
A foreign currency account allows us to minimise unnecessary currency conversion costs. For example, if we sell our investment that is denominated in USD and the proceeds are deposited to our SGD-only savings account, the funds will be converted to SGD first, thus incurring an unnecessary currency conversion cost. If we deploy the funds later to invest in a USD-denominated stock, we have to make the SGD/USD conversion again. Having a multi-currency account allows us to hold the proceeds in USD which can then be easily deployed for future US investment.
Utilising Our Savings Account To Invest With The Same Bank
When we have a multi-currency account with a bank, one advantage that we enjoy is that it becomes seamless to invest in the financial markets through the same bank. For example, if we invest in stocks via the bank’s brokerage platform, funds needed for the investments can automatically be deducted from the designated savings account that we have with the bank. This way, we don’t need to hold our savings and investment portfolio with two separate entities.
Another advantage is that using the same digital banking app, we can also manage both our savings and our investment actions.
By opening an investment account with HSBC, you also get to enjoy their new competitive brokerage fees of 0.15% along with key features such as Wealth Insights, intra-day trading (buy/sell) capabilities, and digital corporate action capabilities – which is enough to get you started or to tide you through with most functions you need as an investor who is starting out.
HSBC investment solutions include investing in unit trusts if we want a diversified, hands-off approach towards investing, securities such as stocks, ETFs and REITs if we prefer to be a self-directed investor, or bonds if we want a fixed income instrument that gives us potentially higher interest than a regular savings account.
Beyond just the primary objective of investing, having a multi-currency account can also be cost effective when we need to perform money transactions that require foreign currencies. These would include global money transfers, online payments for goods and services that are quoted in foreign currencies or making retail payments when we are travelling overseas.
HSBC Everyday Global Account: A Multi-Currency Account That Allows Us To Transact In 11 Different Currencies
One such multi-currency account that we can consider using as a designated savings account for investment purposes is the HSBC Everyday Global Account. The account allows us to save, transfer and transact in 11 different currencies including the Australian Dollar, Canadian Dollar, Euro, Japanese Yen, New Zealand Dollar, Pound Sterling, Swiss Franc, US Dollar, Hong Kong Dollar, Chinese renminbi, and of course, the Singapore Dollar.
With the Everyday Global Account, we can easily keep foreign currencies that we need to fund both the local and foreign investments that we wish to make. The good thing is that with an Everyday Global Account, we can fund these investments directly from our multi-currency account using any suitable currencies.
As a global bank, money transfers can also be made easily (via the HSBC Singapore app) to our overseas accounts that we have including overseas trading accounts.
Beyond the convenience we enjoy for investing, the Everyday Global Account can also be utilised for non-investment related purposes. For instance, with the HSBC Everyday + rewards programme, we can get 1% p.a. Bonus Interest on our incremental SGD Average Daily Balances in our Everyday Global Account. We can also enjoy a one-time bonus cash reward of SGD 300/SGD150 when we are a new qualifier to Everday+ Programme^ and maintain an Average Daily Balance of SGD200,000/SGD100,000 for the first 6 consecutive months.
If we do spend using an HSBC credit card or the Everyday Global Debit Card, we can enjoy 1% cashback on our eligible spends on top of other perks that are already offered by the HSBC credit cards that we use. Giro bill payments are also eligible for 1% cashback (no minimum spend). Find out more about the HSBC Everyday + rewards programme.
With overseas travelling resuming, the Everyday Global Account can serve a secondary function as a travel account – whenever it’s required. With this multi-currency account, we can not only make overseas money transfers to our loved ones faster and fee-free* via HSBC Global Money Transfers, But also make cash withdrawals and purchases with the HSBC Everyday Global Debit Card while we are overseas. The HSBC Everyday Global Debit Card offers a $0 fee in 10 currencies for your retail purchase and cash withdrawals ** ***.
If you’re new to HSBC Personal Banking, you can be rewarded with up to SGD550 in cash rewards^^ by getting started when you sign up for an HSBC Everyday Global Account, HSBC Credit Card and start investing. Don’t forget you get access to all the other benefits we’ve covered in this article too.
^ Visit hsbc.com.sg/ega for more details on the HSBC Everyday+ Rewards Programme.
^^ T&Cs apply. SGD deposits are insured up to S$75k by SDIC.
*Most transfers are fee-free but some intermediary banks may charge fees. Visit hsbc.com.sg/globalmoney for more details.
**Applies to successful retail purchase, online shopping and cash withdrawal made via the 10 supported currencies. If you do not have sufficient foreign currencies to complete the transactions, we will convert the transaction at a prevailing rate as determined by the bank and bill you in Singapore dollar.
***HSBC Jade and Premier Everyday Global Debit Card Cardholders enjoy $0 HSBC ATM fees for overseas cash withdrawals across all ATMs worldwide.
HSBC Personal Banking Everyday Global Debit Card Cardholders enjoy $0 HSBC ATM fees for overseas cash withdrawal at all HSBC ATMs except in Argentina, France, Brazil, Greece, Malta, Mexico, New Zealand and Turkey.
HSBC Fees apply for cash withdrawals at non HSBC ATMs. Please note that for all customers, fees may be applied by the 3rd party banks for cash withdrawals at non-HSBC ATMs worldwide.
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