Have you ever used a post office? Possibly after reading this post you will rush in to the nearest post office! Let us summarize what we have learned so far:
- You must put aside a fixed amount of your income as savings
- Write what you spend (do an expense sheet) it helps you control your expenses
- You can use your expense sheet to optimize the amount you save via making a budget
My tip today would be to put your savings in a separate bank account; in my case I receive my salary through HSBC, but I put my savings in the Postal Saving Bank (yes you can open a savings account in the post office). In any banking system there are two main types of saving accounts:
- The Regular savings account: Banks usually require a minimum balance of JOD 200 for such an account. However, you can open a savings account in the Postal Saving Bank with a minimum balance of JOD 25 !
- The time deposit accounts: You deposit an amount of money that cannot be withdrawn for a period of time (say 6 months). The longer the period the more investment flexibility you give to the bank; hence you get a higher return on your investment. I introduce below a sample of available Islamic banking instruments (please note that the profit percentages mentioned below may vary over the year), yet it is good to note that the time deposit accounts are available in all banks.
Jordan Dubai Islamic Bank
Expected profit is around 3.5 % for a year (so if you put JOD 1000 for a year at the end of the year you get JOD 35, profit is not tax exempted)
The minimum for deposit accounts is JOD 3000
Postal Saving Bank (phone: +962-6-569-2385 #135)
Expected profit is around 7 % for a year (profit is tax exempted)
The minimum for deposit accounts is JOD 1000
Trade-off: Supplementary services may not be available (such as e-banking and ATM)
The Islamic International Arab Bank
Expected profit is around 3 % for a year (profit is not tax exempted
The minimum for deposit accounts is JOD 1000
Bad quality of service (honestly i don't recommend this bank to anyone)
In 1861 Great Britain was the first nation to offer the postal savings system. Nowadays you can find post offices all over the globe promoting the saving culture; for example in India the post office sells gold coins! Remember, you save so that you will reward yourself eventually.
* Update: On Feb. 7th 2011 I had the pleasure of meeting Ms. Karen Adams/ CEO of HSBC Jordan. I asked her about saving tips, she said put 10% of any income you get until you retire, the only exception to spend from this account is for investment purposes (for example: buying a property).
Expected profit is around 3.5 % for a year (so if you put JOD 1000 for a year at the end of the year you get JOD 35, profit is not tax exempted)
The minimum for deposit accounts is JOD 3000
Postal Saving Bank (phone: +962-6-569-2385 #135)
Expected profit is around 7 % for a year (profit is tax exempted)
The minimum for deposit accounts is JOD 1000
Trade-off: Supplementary services may not be available (such as e-banking and ATM)
The Islamic International Arab Bank
Expected profit is around 3 % for a year (profit is not tax exempted
The minimum for deposit accounts is JOD 1000
Bad quality of service (honestly i don't recommend this bank to anyone)
In 1861 Great Britain was the first nation to offer the postal savings system. Nowadays you can find post offices all over the globe promoting the saving culture; for example in India the post office sells gold coins! Remember, you save so that you will reward yourself eventually.
* Update: On Feb. 7th 2011 I had the pleasure of meeting Ms. Karen Adams/ CEO of HSBC Jordan. I asked her about saving tips, she said put 10% of any income you get until you retire, the only exception to spend from this account is for investment purposes (for example: buying a property).
