The habit of saving should be instilled in a person from an early age. This is because saving offers many benefits and conveniences for life.
Saving typically aims to set aside a portion of income for short-term, medium-term, or even long-term needs.
However, everyone has different goals for saving, whether it’s for cash reserves, investments, preparing funds for the Hajj pilgrimage, and many more.
Before you start saving, it’s important to know that there are various types of savings accounts in Indonesia. Understanding these types can help you choose the savings account that suits your needs.
In this article, we will discuss the various types of savings in Indonesia. Read on to learn more.
Key Takeaways:
- Savings are funds set aside from income that is not used, saved for the future, and can be withdrawn anytime.
- Having savings allows you to have readily accessible funds whenever you need them.
- With the advancement of time, there are now many types of savings in Indonesia to meet the needs of individuals and businesses, including conventional savings, investment savings, Hajj savings, giro or business savings, and children’s savings.
What Are Savings?
Before diving deeper into the types of savings, you need to understand the definition of savings. Savings are funds set aside from income that is not spent, saved for future needs, and can be withdrawn anytime.
Banks are one of the most common places chosen by people to save. Banks offer numerous benefits to their customers, from secure saving to the convenience of withdrawing cash independently via ATMs.
Additionally, banks provide various types of savings accounts that customers can choose based on their needs.
There are many facilities offered when you open a savings account at a bank. Some of these include ATM cards, passbooks, mobile banking, and various other services that typically vary depending on each bank’s policies.
By having a savings account at a bank, you can benefit from interest rates that will affect the growth of your savings over time. However, banks generally charge administrative fees to their customers.
The Importance of Having Savings
As mentioned earlier, saving provides many benefits for everyone, from children and students to parents and even business needs.
With savings, you have reserve funds that can be easily accessed whenever you need them. Savings can also be used for investments, such as through fixed-term savings, stock savings, and more.
Beyond just storing money, saving also generates profits due to the interest rates offered by banks, which help grow the balance in a customer’s savings account.
5 Types of Savings in Indonesia
With the advancement of time, there are now many types of savings in Indonesia to address the needs of individuals and businesses. Here are the types of savings available in Indonesia:
Conventional Savings
The first type is conventional savings, which is the most common and widely held savings account among Indonesians.
Typically, customers of conventional savings are provided with facilities such as a passbook, debit or ATM card, and banking services, including SMS banking, mobile banking, or internet banking.
Although it is one of the most popular types of savings in Indonesia, the profit or interest earned from conventional savings is relatively low.
This low return occurs because the purpose of conventional savings is typically for storing money, not for growing funds.
The interest rate for conventional savings generally ranges from 0% to 2%.
Investment Savings
Investment savings are a type of savings or account designed to facilitate investments. Usually, many investment products require investors to open a savings account before starting to invest.
This savings account allows customers to deposit funds into an account that will later be used to purchase investment products.
There are many investment savings products to choose from, including gold savings, foreign currency savings, fixed-term deposits, securities accounts, P2P lending, mutual funds in the capital market, and cryptocurrencies.
Besides serving as a means to store funds, banks also generally offer different types of investment savings. Below are some common types of investment savings products provided by banks.
Fixed-Term Savings or Deposits
Compared to conventional savings, fixed-term savings are suitable for those saving with the goal of storing money and achieving other objectives, such as vacations or other plans.
Fixed-term savings offer relatively better interest rates than conventional savings, with interest rates ranging from 3% to 7% per year.
However, with this type of savings, you can only withdraw funds according to the agreed-upon amount. You may face fines or penalties if you violate the agreed-upon amount in fixed-term savings.
Stock Savings
This type of investment savings is specifically used for regularly purchasing stocks. Stock savings are also used to store money or profits from stock transactions.
Stock savings are a type of long-term fixed savings, where the benefits of saving in stocks can only be felt after a relatively long period.
Foreign Currency Savings
For those who frequently conduct transactions in foreign currencies, opening a foreign currency savings account can be the right choice.
Foreign currency savings, or valas (valuta asing), are a common type of savings in banking. Foreign currency investment savings take advantage of fluctuations in domestic currency exchange rates.
As the name suggests, this savings account involves foreign currencies such as dollars, euros, pounds sterling, and other foreign currencies. However, you can still invest in foreign currency savings using rupiah, which is converted into the desired foreign currency.
The initial deposit for foreign currency savings varies. However, this type of savings can offer greater profits due to the higher conversion value of foreign currencies compared to the rupiah.
Hajj Savings
For those planning to perform the Hajj pilgrimage in the coming years or wishing to fulfill their parents’ dream of performing Hajj, opening a Hajj savings account is the right choice to realize that dream.
Hajj savings are similar to fixed-term savings, where you can withdraw funds once the required amount for Hajj departure costs is met.
Compared to conventional savings, the requirements and documents needed to open a Hajj savings account are more extensive.
In addition to the initial deposit and personal identification, you need to prepare health history data.
The initial deposit for Hajj savings varies depending on each bank’s policies. However, the larger the funds you deposit, the faster you can achieve your goal of performing the Hajj.
Giro or Business Savings
Often referred to as business savings, giro savings are a product designed to facilitate business needs. Giro savings address business requirements for transferring funds to multiple accounts using checks or giro slips.
Opening a giro or business savings account can be done by individuals or business entities. The minimum initial deposit for this type of savings is around Rp 2 to 3 million.
Children’s Savings
As the name suggests, children’s savings are accounts specifically designed for children. With children’s savings, kids can grow to be independent and learn to manage finances. Children’s savings also benefit parents by helping teach children to save from an early age.
This type of savings differs from others due to its smaller deposit amounts, as children typically receive smaller sums of money.
Additionally, children’s savings have lower monthly administrative fees and lighter initial deposit requirements.
Prepare for the Future by Saving with BTN
That’s the information about the types of savings in Indonesia. Now that you know the available types of savings and their benefits, you can choose the right savings account that suits your needs.
Interested in starting to save at a bank? You can begin saving with BTN, Indonesia’s trusted family bank.
BTN is a trusted bank in Indonesia, established since 1987. BTN is committed to serving and supporting housing financing through three main products: individual banking, business banking, and sharia banking.
BTN also offers various types of savings accounts tailored to customers’ needs, including BTN Batara savings, BTN Business savings, BTN Investa savings, BTN Cermat savings, BTN Felas savings, BTN Juara savings, BTN Junior savings, and more. Additionally, you can now open a BTN savings account online via BTN Mobile, so you don’t need to visit a bank branch.
So, what are you waiting for? Open a savings account with BTN now to experience the benefits of saving firsthand. Click this link to learn more about BTN’s banking products.
