The reduced OPR will have two notable effects on your finances: lower interest rates on loans and lower savings returns. We won't be seeing high rates of return on savings accounts and fixed deposits while the OPR is low (but FDs that you made prior to the revised OPR will remain at the same rate).
So, what can you do with your finances? If you’re in need of a loan, you can take advantage of the lower interest rate and apply for it now. As for current loan payers, you will be glad to know that some of your current monthly interest repayments might be reduced. This means extra money in your pocket! Before you start spending the cash, concentrate on these two must do’s:
- Use the extra cash to build your emergency fund:
As we’re preparing for a possible economic downturn, it is more important than ever to have an emergency fund ready. If you’re struggling to save up for a minimum of 6-months’ living expenses, you can use the extra cash to beef up your savings!
- Build an investment portfolio:
If you have your emergency fund sorted, you can use the extra cash to build your investment portfolio that may give you better returns in this economic climate. So why not diversify and look at other investment opportunities to grow your money? From Unit Trusts to gold, there are plenty of options for you to try out. If you’re having doubts about where to park your investment, you can always speak with us to find out more.
