How to Invest Money in 2024 (Low Risk)

Each person’s financial situation is unique, and the key to growing your money is through smart investments. Your choice should align with your preferences, current, and future financial status. Select an investment plan that matches your comfort level with risk. Given that inflation can chip away at your money, safeguarding it is crucial. Below, I’ll outline different investment types from the least to the most risk.

Savings Accounts

A Savings Account is where most of us park our money. It provides account holders with a secure space to deposit their funds while offering the convenience of easy access. One of the primary advantages is the safety of the principal amount deposited; your money remains secure, and you can withdraw it whenever needed. While the returns on savings accounts may be modest, they provide a reliable haven for emergency funds and day-to-day transactions.

The interest rates on savings accounts vary depending on the bank and the type of savings account you choose. Rates can range from a modest 0.05% per annum to a more lucrative 7.8% per annum, offering a spectrum of options for individuals based on their financial goals and preferences.

Singapore Treasury Bills (T-bills) are short-term debt instruments issued by the Monetary Authority of Singapore (MAS) on behalf of the Singapore government.

Fixed Deposits

Fixed Deposits, also commonly referred to as Time Deposits, stand as a reliable choice for individuals seeking a systematic and secure path to nurture their savings. What sets Fixed Deposits apart is their tendency to provide higher interest rates, making them an appealing option for those looking to maximize returns compared to traditional savings methods. With durations as short as 3 months and extending up to 24 months. Although Fixed Deposits permit immediate withdrawals, opting for premature withdrawals typically attracts fees and may result in the forfeiture of accrued interest.

For the month of Janurary, the interest rate range from 3.00% to 3.65%.

Singapore Savings Bonds (SSBs)

Introduced in October 2015, Singapore Savings Bonds (SSBs) stand as a resilient financial instrument issued and backed by the Singapore government, positioning as one of the most secure investment options available in the country.

With a flexible investment period that extends up to 10 years, SSBs are tailored for retail investors seeking a balance between higher interest returns and the preservation of their hard-earned savings. The unique feature of SSBs lies in their step-up interest rate structure, where the bonds start with a lower yield in the initial years and progressively increase their interest rate annually, culminating in the 10th year.

What distinguishes SSBs is the guarantee that bondholders will receive their full principal back in any given month, assuring them against capital loss or penalties. This safety net makes SSBs an attractive option for risk-averse investors. However, should an investor choose to exit the investment before the completion of the 10-year period, the average return per year would be lower.

The minimum investment for SSBs stands at a modest $500, ensuring accessibility for a broad range of investors. At the same time, the maximum individual holding is capped at $200,000, allowing for a diversified and controlled investment approach. It’s important to note that there is a $2 transaction fee associated with both the purchase and exit of this financial product.

For the month of Febraury, the average return over 10 years is at 2.81%

Singapore Treasury Bills

Singapore Treasury Bills (T-bills) are short-term debt instruments issued by the Monetary Authority of Singapore (MAS) on behalf of the Singapore government. Designed to fulfill the government’s short-term financing requirements, T-bills play a pivotal role in the intricate tapestry of the country’s financial landscape. Notably, Singapore boasts a Triple-A credit rating, a testament to the government’s unwavering creditworthiness and its robust capacity to honor commitments to investors.

These short-term debt instruments, available in 6-month and 1-year durations, offer investors a glimpse into the government’s commitment to sound fiscal management. With a minimum investment threshold of $1,000 and a nominal administrative fee of $2, T-bills are both accessible and cost-effective, making them an appealing choice for a diverse array of investors.

The process of issuing T-bills is orchestrated through an auction system conducted by MAS. Investors participate by submitting competitive bids, specifying their desired investment amount and the corresponding interest rate. The government, in turn, accepts bids starting from the lowest interest rate, progressively filling the issuance until the total T-bill amount is met. While competitive bids allow investors to stipulate both the investment amount and desired interest rate, non-competitive bids necessitate accepting the interest rate determined by the competitive bids.

An intriguing aspect lies in the secondary market dynamics, where T-bills can be bought and sold before maturity. It’s important to note, however, that prices in the secondary market may fluctuate, impacting the overall return on investment.

The auction results on 18 Jan is at 3.7% per annual.

Singapore Government Bonds

Singapore Government Securities (SGS) are issued by the Monetary Authority of Singapore (MAS) on behalf of the government. This financial instrument, spanning categories such as Market Development, Infrastructure, and Green Infrastructure, presents a versatile array of investment avenues. Bolstered by a prestigious AAA credit rating, SGS stands as a robust and reliable choice for investors seeking stability.

The varying tenors, ranging from 2 to 50 years, cater to a spectrum of investment preferences. Moreover, the accessibility of SGS extends to individuals, including foreigners aged 18 and above, making it an inclusive investment opportunity. The minimum investment amount of S$1,000, in multiples of S$1,000, further enhances the accessibility of SGS, empowering investors to engage in the nation’s economic growth.

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