(This article was originally published on the 1st July 2017 and updated on the 21st May 2020).
During this Hari Raya, some of us will receive ‘duit raya’ from our parents and also relatives. For some, their ‘duit raya’ could accumulate to hundreds of ringgit. Hence, this leaves many in facing the dilemma of thinking what to do with the ‘duit raya’? Of course, indulging yourself to splurge on your wishlist items may sound very tempting. But, try resisting yourself and do consider saving and growing the fund instead!
It is a smart way to start building your own savings to be used for emergencies and unexpected expenses down the road. Find out how you can maximise your ‘duit raya’ savings pool with these handy tips.
1. Savings Account
Own more than one savings account to build your funds for varying purposes. This way you will be able to track the expenses more efficiently as well as to take advantage of better interest rates or terms from different banks. If you happen to own a ASB account, you can choose to place your money into your ASB account as the yearly dividend is much higher than commercial bank savings and fixed deposit rates.
If you are saving together with family members, this is also a great way to quickly build up your Raya fund with a dedicated account and to collect contributions in one place. You do not have to stick with the bank (or banks) you currently hold accounts with. Instead, look for a savings account with the best terms and rates. Browse through comparison sites like RinggitPlus and iMoney to help you find one that is just right for your savings needs.
2. Fixed Deposit
Consider investing a portion of your money in an Islamic fixed deposit account to earn a profit. This way, not only will you be earning more money on top of your principal, you will be able to put money aside effectively, instead of spending it needlessly. There are tons of Islamic fixed deposit accounts for you to choose from.
However, it is not a good idea to just randomly pick a bank and account. You could be missing out on better terms and profit rates. Be sure to do your research on comparison sites or through individual banks before making your decision.
With as little as RM1,000, you can start investing with Amanah Saham Nasional Berhad (ASNB) unit trusts and potentially earn dividends on your investment. This type of investment is good for those who want to get started in the world of investments. Do read through the prospectus, a document that contains all the important details of the investment, before you invest. Note that you can invest in ASNB unit trusts through major banks such as Maybank, RHB and CIMB.
4. Save a Little Everyday
Make it a point to put money away daily, even if it is just a small amount. This will help you focus on your savings goals and keep you from spending unnecessarily. Remember that even little contributions have the potential to grow with time!
If you have trouble sticking to a daily amount, do set up a standing instruction with your bank to automatically deduct a sum at the beginning of each month (or when you receive your salary) and put it into a dedicated savings account. Learn more how to successfully save your money using the 50/30/20 rule.
5. Pay Off Debts
If you owe money on your credit card bill or other interest-accruing loans, clear it off as soon as possible. It might benefit you in terms of interest savings. For instance, if you pay your credit card off during the grace period (typically within 20 days of the purchase), you can save on interest and eventually bring down the tiered interest rate. For more debt clearing tips, do check out our article on effective ways to pay off your debts.
We hope that you would find these tips useful or the least have an idea of how to spend and invest your ‘duit raya’ wisely. On behalf of Direct Lending, we would like to wish all Muslims a blessed Ramadan. Have a joyous Raya celebration with your family.
If you ever need more some extra money this Hari Raya, you can always apply with us for free! Direct Lending is a personal loan platform that offers affordable rates as low as 3.9% or as fast as 2 working days. Don’t forget to follow us on our Facebook page for more updated finance content and promotional offers.