Savings accounts: flexibility first

A standard savings account lets you deposit and withdraw at any time, usually earning a modest interest rate. It's the right home for money you might need on short notice — an emergency fund, or funds earmarked for near-term spending.

Fixed deposits: higher rate, less flexibility

An FDR typically pays a higher interest rate than a savings account, in exchange for locking your money away for a set term. It suits money you're confident you won't need until (or after) the term ends.

A simple rule of thumb

Keep 3–6 months of essential expenses in an easily accessible savings account as a safety net, then consider moving additional savings you won't need soon into fixed deposits (or other investments) to earn a better return.

Laddering as a middle ground

Rather than locking all your savings into one long FDR term, you can split it across several FDRs with staggered maturity dates — a technique called laddering, covered in more detail in the next lesson.

Using this app

The Savings Goal Calculator can help you work out how much to set aside regularly to reach a target amount by a target date.