Should you park more savings in ringgit? What weekly JB visitors need to know about hedging, FX rates, and Malaysian bank accounts

Independent Singapore

3 hours ago

MALAYSIA: For Singaporeans who head to Johor Bahru every weekend to shop, dine, or stay overnight, the question of whether to 'hedge' against a rising ringgit is becoming a common personal finance dilemma.
On Facebook, one frequent traveller to JB shared that he keeps RM10,000 (S$3,000) in cash as a hedge. 'I usually buy when the rate is 3.35, which is more favourable than 3.25 now. I go to JB to stay at a hotel once a week. Should I increase my hedge to RM20,000 or RM30,000? Should I open a ringgit account in a Malaysian bank to earn 3% interest if available?' he asked.
The post has sparked lively debate online, touching on everything from the feasibility of opening a Malaysian bank account as a foreigner to whether ringgit deposits actually make sense in the long run. Why hedge in ringgit?
For those who spend regularly across the Causeway, holding a stash of ringgit can act as a buffer against short-term fluctuations. If the currency strengthens from 3.35 to 3.25 against the Singapore dollar, those who stocked up earlier effectively lock in cheaper hotel stays, meals, and shopping.
Some commuters liken it to 'prepaying' for future consumption, much like buying travel vouchers. The difference, however, is that the ringgit's track record is one of long-term depreciation, making such hedges inherently speculative. See also Ipoh - The Perfect Weekend Escape from Singapore Treat ringgit as spending money, not an investment
Many online reactions stressed that the ringgit should be viewed as a convenience for spending, not a long-term hedge. 'It depends if you are going to spend it in M'sia. The ringgit generally depreciates against a basket of currencies. The interest rates are deceptively high — that still isn't enough to prop up the ringgit. I have money in both countries, but my M'sian deposits are only for spending in Malaysia, not investments (including hedging). The rest are in SGD and USD. Meanwhile, my M'sian friends invest in SGD instead,' one netizen said.
The remark reflects a widely shared sentiment: even Malaysians often look outward to the Singapore dollar as a safer store of value. For Singaporeans, that reinforces the idea that holding large ringgit balances is more about easing weekend expenses than actually building wealth. Banking hurdles for foreigners
Others pointed out that opening a bank account in Malaysia is not as straightforward as it sounds. 'Not as easy to open a Malaysian bank account if you're a foreigner post the 1mdb saga. Couple of conditions to satisfy from having a job to serving a housing loan. Best to check with the banks. I wouldn't go through the hassle to hedge,' a Facebook commenter said. See also It's June! Best time to hit the beach in Johor Bahru!
The analysis here is sobering: the perceived 3% interest rate that might entice Singaporeans is largely out of reach unless one has the right residency or employment status. The banking restrictions act as a natural barrier, which means hedging strategies that rely on Malaysian deposits are impractical for the average JB weekender. The risk of holding too much cash
A few users also warned against hoarding physical notes. 'Hope you're not buying via physical notes, I have a stack of ringgit from 80s that local money changer that refuse to take in. I have to go to Maybank in Malaysia to exchange…. This will never happen to SG currency… So I never think to hedge such [an] unstable currency unless you have huge business dealings using their currency,' one netizen shared.
Their story highlights a hidden risk: Currency redesigns and policy changes can make old notes less liquid. For Singaporeans used to the Singapore dollar's stability, the idea of notes becoming unexchangeable at money changers can be bothersome. It highlights the reality that large ringgit stashes aren't just vulnerable to exchange rates, but also to the currency's weaker credibility over time. So, should you hedge in ringgit?
For Singaporeans who cross into JB weekly, keeping a good sum of ringgit can provide convenience and certainty. It smooths out the volatility of daily exchange rates and saves the hassle of multiple trips to the money changer, but the consensus from online reactions is clear: treat ringgit holdings as a way to pre-pay for your future consumption, not as an investment.
Those who try to turn this into a profit-making strategy may be overlooking two realities: that the ringgit has historically lost ground against the Singapore dollar and that Malaysia's tighter banking rules make it difficult for foreigners to truly benefit from higher interest rates. Add to this the risk of holding too much physical cash, and the idea of 'hedging' starts to look less like a smart investment play and more like a lifestyle convenience.
Ultimately, the safer long-term bet is still to keep savings in stronger currencies such as the Singapore dollar or US dollar, while using the ringgit simply as a practical tool for weekends across the Causeway.
Read also: Ringgit edges higher as US dollar weakens, buoyed by steady domestic demand