Making good use of flexible home loan with online banking

I notice nowadays quite a lot of people are financing their house with flexible home loan. However, from their sharing with me during some chit-chat session, I noticed that not many are making good use of the flexibility provided by their home loan, and they treat it just like a traditional mortgage loan.

In my opinion, if you have a flexible home loan, you should:

• Put in extra money (excess payment) into your account to reduce interest charges
• Make use of your excess payment when needed

If you never put in excess payment into your account, perhaps you don't need a flexible home loan, and should opt for a traditional home loan package in the very beginning. In general, it is easier for you to fight for relatively lower interest rate by not having the flexibility provided in a flexible home loan.

If you very seldom make use of your excess payment in your account, perhaps you just need a semi-flexible home loan.

Here is my sharing on how I use my Citibank FlexiHome loan.

I have 2 types of account with Citibank: the FlexiHome loan, and credit card. I applied for an ATM card for my FlexiHome loan account, which cost me a one time application fee of RM8 only. I haven't used the ATM card in any bank teller machine yet, but that card is very important, because I need it to create a consolidated Citibank Online internet banking account.

Once the online banking is created, I am able to see the account information for both my FlexiHome loan as well as my credit card accounts. I can always check for the balance and transaction details of both the accounts even before I receive their monthly statement from Citibank.

This is particularly useful in monitoring how much interest I've been charged daily for my home loan. Citibank Online shows me 2 key figures of my FlexiHome loan account:

• Amount I owe the bank, which is calculated as the outstanding loan minus excess payment in the account. This figure will slightly increase daily, because the account has a daily rest interest calculation scheme. This is interesting, because from here I can monitor closely how my interested is charged by the bank, and how much is charged for each day.


• Amount available for withdrawal, which is the excess payment. This figure will not change until the next installment due date, where the installment will be paid directly from here.

Of course, if I put in money into the account, it will be added to the amount available for withdrawal, and will also affect the daily interest amount charged thereafter to be lesser.

On the other hand, by using the online banking, I can pay off some of my utility bills, including the accessment of my house, with my credit card from my computer at home. I can even get double Rewards Points by paying the house accessment with this credit card.

Every month when I get my salary, I wrote a cheque to myself and bank in to my Citibank FlexiHome loan account. The cheque amount will have some excess payment for my savings, as I know that my home loan interest is higher than fixed deposit interest, so it is a better idea to put the money in the loan account to reduce more interest, than to put in deposit account to earn the very tiny interest. In addition, fixed deposit does not provide the flexibility to take out the money at anytime without any lost in interest calculation.

When the due date of the credit card payment comes, I just need to login to Citibank Online and make a transfer from my FlexiHome loan account to my credit card account. My credit card will then be paid in the next business day. This transfer between my own accounts with Citibank is free of charge. Isn't this a good idea of making use of the flexibility provided by the FlexiHome loan account to pay the credit card bill without hassle, by using the online facility?


When I make a new share investment which requires me to bank in money into my trading account, I can also make an external transfer from my FlexiHome loan account to my share trading account using the same online facility too.

To summarize, I use my FlexiHome loan as my main savings account, as I can save loan interest with any excess payment I made, and the saving in loan interest is higher than fixed deposit interest. FlexiHome loan allows me to take out any amount of excess payment available at anytime, which makes it an even better place for main savings purpose. I also use my credit card to pay utility bills and earn Rewards Points, and use the savings (excess payment) in my FlexiHome loan account to pay for that credit card bill.

If you also have a flexible home loan with any bank, you're welcomed to share your experience on making good use of the flexibility of your home loan account too.

You might also be interested to read about my other article on "What to look for in a flexible home loan?".

Top 5 trends in Customer Relationship Management (CRM)

Customers today have changed. Thanks to the emergence of various internet and web technologies, they have access to more information. Also, the recent global economic situation has made spending to be more cautious.

It is predicted that the following trends will accelerate or begin to emerge.

1. Companies will begin to break free from old habits
The companies are seeking to communicate with customers through channels that facilitate engagement and personalization with new marketing channels. The shift of power from corporations to buyers is intensified. Marketing needs to change the strategy to be more collaborative.

2. Interactive marketing will emerge as the dominant marketing discipline
This will engage the customers and prospects in a cross-channel dialogue that builds on their past and current behaviour.

3. Companies will renew efforts to increase customer awareness
They need to find ways to listen and understand more from the customers.

4. Customer decision making will be centralized to drive the dialogue
A centralized decision-making capability that can facilitate dialogue across outbound and inbound, also online and offline marketing channels, is needed.

5. Companies will restructure in order to aid cross-channel execution
More skill sets are required for interactive marketing. Companies need to be more creative, analytical, technical savvy and process focused.

* The above top 5 trends in CRM is referenced from an article written by Elana Anderson in the Baseline Magazine.

Top 10 IT trends for 2009

What IT technologies are able to bring enterprises with competitive advantage in the predicted tough times of 2009?

1. Software as a Service (SaaS)
According to RBC Capital Markets, SaaS is expected to command a 23% share of the $120 billion software market in US by 2010 with its current annual growth rate of above 40%.

2. Virtualization
It is estimated that about 50-60% of all servers are now virtualized to reduce server sprawl.

3. Enterprise Mobility
This is boasted by the emergence of high speed wireless network, such as the 3G, HSPDA, etc.

4. Energy-Efficient Data Centres
The concept of Green IT is blooming...

5. Security, Risk and Compliance
More automation will be seen in these areas.

6. Social Networking
Companies are tapping into the powerful virtual communities in social networks such as LinkedIn, Facebook, MySpace, etc.

7. Web 2.0
More and more websites and web applications are jumping into this bandwagon, which is able to provide seamless ubiquitous rich content and better interactivity.

8. Document Management and E-Discovery
More and more IT vendors are producing and enhancing solutions in this area.

9. Project Management (PM) and Project Portfolio Management (PPM)
More and more organizations are migrating from simple tools such as spreadsheets and e-mail to formal PM and PPM applications.

10. Web and Video Collaboration
More and more organizations are adopting video conferencing and telepresense systems.

* The top 10 IT trends above are referenced from an article written by Samuel Greengard in the Baseline Magazine.