Previously, I talked about how to accumulate wealth when you’re in your 20s. Now that you’ve started to rein in your expenses, it is time to look at finding the most effective financial instrument(s) in which you can invest in for more returns.
Increase the returns on your savings accounts
If you’re the sort who prefers to preserve your capital at all costs, one of the safest (and laziest) methods would be to move your money into a savings account that offers higher returns for your money, compared to the POSB account you’ve been holding since years ago. OCBC 360 and UOB One are great choices to start with.
Move your money around In fixed deposits
Banks also offer fixed deposits at higher rates than savings accounts and require you to lock up your funds with them for a minimum holding period of one to five years. You’ll need to do some research and actively shift your money from one fixed deposit to another in order to enjoy these returns, so it takes a bit of homework, but is also as safe as it gets.
Subscribe to the Singapore Savings Bonds
Another practically risk-free method would be to purchase the Singapore Saving Bonds – which was only just set up by the government last year. If you had purchased $20,000 of SSB last month and did nothing for 10 years, you would be rewarded with a generous $4,442 in April 2026! In simple math, that’s a whopping 22% at the end of the entire duration, made possible through the compounded returns.
If you can stomach the emotional roller-coaster of the stock market, I highly recommend index investing – your money goes into broad, diversified indexes that track market returns, typically comprising the largest companies on the market, such as DBS, Keppel Corp, and more. This is also known as “automatic investing”, since there’s very little homework needed and you won’t have to worry too much about individual stock price fluctuations.
Invest in individual stocks
If you’re willing to work a little harder, investing in stocks can be quite rewarding when you invest in the right companies who will grow and flourish over time. For instance, if you had bought into Raffles Medical Group’s stock in 2012 when it was hovering at about $2, you’ll be sitting on more than two-folds of your invested capital today, without even counting the dividends you received over the years to reward you for your patience!
Do not be afraid of investing, as it can help bring you closer to that financial freedom you’ve been dreaming of.
Image: Сергей Тряпицын / 123RF.com
Text: Budget Babe
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Budget Babe writes on personal finance and investing, and is Singapore’s top female financial blogger. All her advice are offered free on her personal blog and she does not sell or conduct any trading or investment workshops.