Singapore is one of the high-class states in Southern Asia. It occupies the maritime line of the Malayan peninsula that links over 600 ports from 120 countries. Singapore also acts as a headquarters for about 37,000 international companies. Therefore, these features make Singapore a promising investment state for individuals who want to make fortunes from any legal business. Investors only need to understand the ups and downs of investing in Singapore to make informed choices whether they should make it as part of their portfolios.
Not only local investors are profiting from running businesses in Singapore, but foreign investors are also attracted to invest in Singapore due to various reasons, including;
Thriving trading and financial sectors:
There is a far-reaching trading network that amounts to 20 free trade agreements with over 30 trading partners. As of December 2019, Singapore Exchange Limited, the country’s stock market, had a market capitalization of about $7.1 billion.
A boosted pro-business environment:
Singapore is characterized by a low tax rate and low level of corruption. It is made home to 7,000 international corporations from U.S, E.U, and Japan. It also harbors 3,000 companies India and China.
Skilled workforce:
Most skilled foreign workers in Singapore are from abroad than any state in Asia.
More advanced infrastructure:
Singapore is one of the developed countries in Asia in terms of infrastructure and over 100 international airlines. Its amazing digital infrastructure covers almost 99% of the country.
As a Singaporean, you may be thinking where to put your excess cash to earn interest and create wealth. You may be wondering how to start even after getting the right choice. With the country’s full opportunities, getting the right investment option has never been a hassle to determined investors. However, there are several scams in the country that look too good to be true. Therefore, you need to be vigilant and fish out such scams whenever they are presented to you. That is why we have come up with the most profitable investment options to kick-start your investment journey.
What Are Risk-Free Returns?
Risk-free return is the rate at which you expect to earn more returns after taking no or less risk. As an investor, that should only act as a dream to you because, at some point, you must take some risks for you to succeed in your investment. Most investment opportunities in Singapore are risk-taking, and you have to take chances with your money to have guaranteed returns. Here are some of the risky options with high yields;
1. Singapore Savings Bonds (SSB)
The Singapore Savings Bonds were launched in October 2015 by the Singapore government. The government issues them to investors as the debt securities for the money borrowed by the government. The SSB has a maturity period of ten years, meaning the holder of the bonds can redeem them after ten years. However, the investor can cash in the savings bonds even before ten years elapse, only that the accrued interest will be much lower.
Therefore, it calls for investors to hold on to the SSB longer if they want to get higher benefits on the redeeming.
When you invest in the Singapore Savings Bonds, you are offered superb liquidity, which allows you to redeem them within their maturity period. Although a bit lower, the SSB pays out similar interest rates than other securities issued by the government, but do not offer liquidity benefits.
2. Exchange-Traded Funds (ETFs)
ETFs is one of the easiest ways of investing in Singapore because they offer diversified opportunities in the country in a single U.S traded securities. The popular ETFs in the country are iShare MSCI Singapore ETF, with a net asset value of more than $530 million and 25 different securities in medium and large companies. Because Singapore is majorly a trading nation, ETFs are more significantly directed to financial institutions by 46%, the industrial sector by 18%, and the rental housing market by 17.5%. However, this makes ETFs riskier if one of the areas is overwhelmed. This means that investors should be watchful when putting their money in ETFs sectors.
3. Residential Property Investing
The rental housing market is the most exciting asset in the Singaporean economy. One thing about property investing in Singapore is that it is a tightly controlled market, especially by the government. This makes it take longer to respond to any global macro factor, usually 9 to 12 months before it is affected by changes in the worldwide market. Typically, the Singaporean rental housing market is characterized by sellers asking for higher prices on their properties due to the imposed ABSD taxes. However, the buyers are not willing to pay much on the properties because they know about the new changes, making the market to have a falling transaction volume. This forces both parties or one of them changing their mind on the price.
As a new investor looking for where and how to make money from residential property, you should learn about the uniqueness of the investment and find that home you love. It is better to buy the property regardless of where the global macro factors are because you never if you will get a better price with the government interventions.
4. CPF Top-Ups
CPF top-ups are also a better way of earning great interest through your Special Account (SA). They earn a minimum return of 4.0% per year, and they are guaranteed by the Singapore government. Noticeably, the first $60,000 of the COF funds, with up to $20,000 balance in the CPF Ordinary Account, earns an additional 1.0% in returns. This is an indication that you can earn up to 5.0% with your CPF top-ups. However, unlike other savings accounts which you can redeem at any time, CPF top-ups are irredeemable until you hit 65, when you will start withdrawing your cash payouts under CPF Life annuity scheme.
The Bottom Line
There are many other opportunities, such as Singapore Dividend Bonds, Fixed Deposits, Singapore Government Treasury Bills, and Closed-End Mutual Funds. All these are great opportunities that new entrepreneurs should deeply learn before venturing in.
However, before choosing the best option to work with, it should be noted that the Singaporean economy is more susceptible to slowdowns due to its overreliance on global trade. Therefore, any investor is asked to measure all the pros and cons before investing in any sector. Learn more about saving and investing in Singapore from https://www.instantloan.sg/.
