Singapore Government Treasury Bills

Treasury bills - or T-Bills for short - are short-term securities issued by the Singapore Government. In essence, you are lending money to them. They pay out a fixed interest rate when the T-Billsmature after six months or a year.

The interest yield from T-bills are increasing - more than doubling from 0.98 in March 2022 to 2.76 per cent in September the same year. This makes it ideal for investors looking to park their money somewhere for the short term while growing their wealth at the same time.

T-bills are usually sold at a discount, before achieving full value upon maturity. They are also backed by a government that boasts an AAA credit rating which is the best grading by international credit rating agencies. Requiring a minimum investment of just $1,000, it can be a viable option for even the most risk-averse investors.

 

Singapore Savings Bonds

Like T-bills, Singapore Saving Bonds (SSBs) are another form of lending to the Government. But compared to T-bills that have shorter maturity periods, SSBs are suitable for those with longer-term investment horizons.

This is how it works: a Saving Bond has a term of up to 10 years. Interest rates increase each year, leading to higher returns the longer you hold on to it. There is also the option to redeem these bonds anytime, without being charged a penalty.

The rates are locked-in upon issuance, which means that one will know exactly how much the returns are for each year, making it extremely appealing to a low-risk investor looking for higher level of certainty.

Requiring only a minimum investment of $500, SSBs are extremely accessible. With returns recently hitting a record high of 3 per cent in August, demand for them is rising.

ETFs

Buying individual stocks can sometimes be expensive and risky, especially in this uncertain financial climate. But for those who still want to dip their fingers in the stock market, Exchange Traded Funds (ETFs) present a viable, more diversified option.

Most ETFs track the performance of stock indexes - groups of stocks in a selected market or sector. For example, buying a Straits Times Index ETF, which consists of Singapore's top 30 companies, gives you exposure in all of them. Such diversification makes ETFs could be a suitable option for beginner investors who are often unsure about which stocks to buy.  

 

Fixed deposits

Park money in the bank, lock it in for a specific period, and get your interest and capital back - guaranteed. Simple and straightforward, a fixed deposit is one of the most timeless, risk-free methods of wealth building.

While this might seem like an outdated form of growing wealth, fixed deposits are making a comeback as banks hike their interest rates. Investors looking for a stable place to park their cash while earning safe returns should consider this option.