What are the Safest Investments in Singapore?
Singapore is well-known not only for the high tourist influx but also for the good trade sector and developed financial sector. Also, Singapore is a popular place for investments thanks to low taxes and great opportunities for foreign investors. With these thoughts in mind, you should consider Singapore as a good option if you are looking to invest now. In fact, with a strong economy and skilled people in the work field, and also with various investment opportunities, Singapore could be considered the best place to invest in 2018. There are plenty of options both for any Singaporean and foreign investors coming here to get some profit out of their money.
Singapore has a diversified economy which leads to numerous investment options, from safer options to riskier choices that could double the yields. Both companies and individual investors have a wide range of business sectors to choose from and the most popular of them being tourism, financial services, shipping, and trade or pharmaceuticals. Here are a few of the most common ways to invest in Singapore:
- Government Bonds
- Government Treasury Bills
- Saving bonds
- Saving deposits
- Saving plans
- Fixed deposits
- Dividend Stocks
- Value-growth investing
- Deep value investing
Choosing the best way to invest in Singapore now depends very much on what you are looking for as an investor. If you want to know which are the safest ways to invest in Singapore in 2018, we have prepared a list of low-risk investment methods:
1. Dividend Stocks
Dividend stocks are very popular among investors since they promise a steady passive income if you choose to invest your money in the right companies. This is a low-risk investment for intermediate to expert investors who are already familiar with the market opportunities and threats and know what are the wisest steps to make a risk-free investment. If you are looking into this method, you must search for senior companies that have spent a few good years on the market and can maintain a stable profit, revenue and, most importantly, cash flow. Also, another important aspect to look for is the track records of the company for paying dividends – you want to make sure you are investing in a well-grounded, serious company that will ensure your passive income.
When we talk about bonds, we think about an investment that takes the form of a loan you give to a company with a stated interest rate that is known to be fixed in Singapore. The risk is low for this type of investment and the only thing that can go wrong is that the company will stop paying the money back as it cannot afford it anymore and issues a bond default. The returns can vary, depending on how much risk you are willing to take. The safest way to invest in bonds is with The Singapore Saving Bonds that is known to have almost no risk and requires a minimum investment of $500. However, you shouldn’t expect the greatest return – 2.38% annually over 10 years if you stick with the bond. Other popular bonds are Singapore Government Securities (also very low risk) or corporate bonds (which are generally riskier but have higher returns). Bonds are suitable for beginners since they are easy to understand and very low risk.
3. Fixed deposits
Fixed deposits are popular in Singapore now being a low-risk investment that is easy to understand, offers predictable returns and can be accessed by any investor. A fixed deposit is a bank deposit for a determined period of time through which you, as an investor, will not be able to access your money without paying a penalty. You get a higher interest rate if you choose to lock your deposit in. However, because these types of investments are so common, the interest rate is quite low – between 0.30% to 1.50%. Fixed deposits are suitable for beginner investors.
4. Saving Plans
Saving plans are also a low-risk investment opportunity in Singapore. These can usually be found at insurance companies, but make sure you go for the non-participating type that also guarantees returns. This type of investment asks you to lock your money over a determined period of time or contribute over a fixed period of time. The only way you could see some good returns from a saving plan is to contribute until the end of the period. The savings plans are covered by the Deposit Insurance Scheme in Singapore which makes them one of the safest types of investments.
5. Unit Trusts
This is an investment option for more experienced investors who know the market. However, it can also be suitable for a beginning investor depending on their objectives, risk profile and investment strategy. Unit trusts or mutual funds receive money from a number of investors and are managed by a fund manager who uses the cash to further invest in bonds, stocks or other types of investments. As an investor, you will gain profit if you invest in a unit trust when dividends are paid to unitholders and the price goes up. The downside is you will probably be required to invest a larger sum of money in a unit trust than in other types of safe investments.
As an investor in Singapore, there are many opportunities to look at even if you are just looking to play on the safe side. As you can see, you can find safe methods to invest your money without too much fuss. However, always keep in mind that low-risk opportunities are not always the most profitable ones. In order to stay safe while investing in Singapore, many entrepreneurs work at the beginning of their career with a financial specialist who can help them with the different types of investments – such as fixed deposits and saving plans – and with relevant information about financial rules and taxes in Singapore. Probably, the safest investment method in Singapore, considering its good public laws, is investing in Singapore Saving Bonds or in Singapore Government Securities.
In the end, as a Singaporean investor, you should first consider your financial goals and budget so that you can build a good stock portfolio and invest your money wisely in the market.