Subscribe to RSS feed
posted on 1 Mar 2016  -  2,942 views
The company that I am currently working for in Tokyo has a cafeteria that serves free lunch to all employees, hence during lunchtime, we would get together for lunch and chat.
Occasionally, the topic about money management would come up, and to date, I have yet to find a Japanese colleague who invests in the stock market, citing reasons of either finding it too risky, lack of knowledge, or more commonly, both.
They would instead keep their money in the bank that gives virtually zero interest. In fact, banks in Japan charge you for withdrawing your own money from the ATM! However, the habit of keeping money in the bank is not unique to Japan because even in Singapore, I personally know quite a few people who do that.
How about you? Do you keep your extra cash in the bank? If so, I hope that I can convince you in this article that there is an investment instrument that is safer, yet gives higher returns than a savings accounts, and does not carry the penalties of early withdrawal of fixed deposits.
Firstly, I assume that you are putting your money in savings accounts for two main reasons:
flexibility (can take out your money anytime) and
very low risk (bank won't go bankrupt easily). But do you know that there is something called
Singapore Savings Bond?
Singapore Savings Bond
"Investors can redeem their Savings Bond with the Government in any given month before the bond matures, with no penalty for exiting the investment early."
Flexibility without penalty? Check.
Singapore Savings Bond is fully backed by the Singapore Government and it even guarantees that you can get back the amount you put in whenever you want irregardless of how the market interest rate changes. This makes Singapore Savings Bond literally risk-free.
Read more here.
What returns would Singapore Savings Bond give you? In the latest bond issue on 1 March 2016, the first year's interest would be 1.09%. No savings account in Singapore gives an interest rate even close to 1%. Most time-deposits do not even give beyond 1%, and those that do come with many fine print and conditions and of course, penalties for early withdrawal.
Furthermore, Singapore Savings Bond uses a step-up approach, so the longer you keep your money with the Singapore Government, the more interest it would give you. For the 1 March 2016 issue, interest from the 5th year onward is 2.95% and in the 10th year, it is 3.35%.
Click here to learn more about 1 March 2016 issue.
Higher interest than banks? Check.
With flexibility without penalty, risk-free, and higher interest than banks, I hope that you are at least convinced that the Singapore Savings Bond is worth considering.
Here is how to apply for the Singapore Savings Bond!
Lastly, if you are one of those who believes in owning physical properties with your extra cash in order to generate a stable passive income for your retirement, do read
this article to learn more about REITs, which is a much easier way to become a property owner without all the hassle.
p.s.: This is not an advertorial and I was not approached by Singapore Savings Bond to write this article. It's just that a good friend from Singapore was visiting and he shared that both he and his wife keep all their money in a savings account, and was wondering if there were better options out there. So, this article is specially dedicated to you, Winston!
Next Article >
< Previous Article
Improved Dividend Strength Estimator
Dividend Strength Estimator
List All Articles
Other articles by evankoh
Trapped in Chennai, India
On a recent business trip to India, I was stranded in Chennai because of massive flooding everywhere, including the airport, due to the worst rains the city has seen in the recent century. I shall skip the details of who, what, when, where, why and how I was trapped and escaped, but focus instead on what I felt during my time there. The Rich vs The Poor It was Day 3 since the heavy flooding started. ...
Fundamental Metrics - See More, More Easily
For each listed stock in SGX, there is a profile page (e.g. DBS) that displays the valuation and financial metrics of that stock. Personally, I use it often to learn the historical and current fundamental values of the stock. However, there are limitations to it. 1) Due to space constraint, I can only display partial information. For example, for Valuation metrics, I only show 52 weeks high, low, median, ...
Improved Portfolio Reporting
One of the main goals of SGXcafe is providing a portfolio management tool. It is also one of the most popular features in SGXcafe. When I added the ability for one account to have multiple portfolios, it was quickly adopted and used by hundreds of users. However, at that time, you could not look at individual portfolio for the portfolio reporting tab and a few users requested to have this feature added. ...