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How to invest in Singapore: 5 best ways in 2022

From stocks and cryptocurrency to bonds and index funds, these are the 5 best ways to make your money grow.

Between the rise of meme stocks, geopolitical tensions causing havoc on industries, rising interest rates and talk of an impending recession, you might be wondering, “How do I invest in Singapore?”. Instead of getting wrapped up in investing trends, finding the best way to invest money comes down to your risk tolerance, goals and how long you plan to hold your investments.

We compared multiple investment options and chose the five best ways to invest in Singapore based on the return rate, liquidity, time horizon, and how much activity and knowledge you need.

Find the best way to invest money in Singapore

We’ve rounded up the 5 best ways to invest money in Singapore depending on what type of investor you are, plus a bonus strategy during times of inflation.

1. How to invest in Singapore if you want to control your portfolio: Stocks

Stocks have the greatest variety of trading options because you can choose from emerging businesses you think will explode, companies that pay dividends, established businesses in industries resistant to downturns, and so on. In addition, it’s easy and often free to open a stock trading account and start trading.

  • Where to buy: Online brokers
  • Risk level: Low, medium or high—depends on which stocks you invest in
  • Liquidity: High
  • Minimum: No investment minimums
  • Fees: Starting from $0 depending on the broker

2. Best way to invest money if you want to be hands-off: Robo-advisors

Robo-advisors trade automatically based on an algorithm and invest your funds on your behalf. You have to set up guidelines, such as your risk tolerance and preferred investment types, and the algorithm will allocate your funds and rebalance your portfolio accordingly. This is great for people who don’t want to dedicate the time and energy to building and maintaining their portfolios.

  • Where to open: Brokers and financial companies like Syfe and StashAway
  • Risk level: Low, medium or high—but this largely depends on your settings
  • Liquidity: High
  • Minimum: Starting from $0—depending on the Robo-advisor
  • Fees: From $0 to 1%—depending on the Robo-advisor

3. Best way to invest money if you are a conservative investor: Index funds

Index funds offer one of the best risk/reward ratios for long-term investing, meaning they offer decent rewards for relatively low risk. That’s because major indices have consistently gone up in the past 90 years. For example, S&P 500 has averaged a 10% annual return during this time. So if you invested $500 USD/$685 SGD each month for the past 30 years, you would now have about $1 million USD/$1.3 million SGD to retire on.

  • Where to buy: Brokers
  • Risk level: Low, medium—depends on which funds you invest in
  • Liquidity: High
  • Minimum: No investment minimums
  • Fees: Annual fee of about 1% depending on the fund

4. Best way to invest money if you are a risk taker: Cryptocurrencies

Being a relatively new investment option among mainstream investors and institutions, cryptocurrencies are a high-risk, high-reward investment. What’s more, there are always new coins coming out or older ones getting the spotlight now and then. Because of that, the rate of return could be way higher than investing in stocks. But since cryptos aren’t currently regulated, you could lose your entire investment.

  • Where to buy: Brokers and crypto exchanges
  • Risk level: High
  • Liquidity: High
  • Minimum: No investment minimums
  • Fees: Starting from 0% depending on the broker and the exchange

5. Best way to invest money if you are close to retirement: Government bonds

Investing in Singapore government bonds, also known as Singapore Savings Bonds(SSB) is one of the safest investments. That’s because the chances of the Singapore government failing to pay off its debts are low—which is why this investment option comes with a relatively low return compared to other options like stocks and ETFs. In addition, investors who are close to retirement likely want to be exposed to low-risk investments. Since they might need to access the proceeds in the near term, market fluctuations can significantly impact them.

  • Where to buy: Apply through local banks (DBS/POSB, OCBC and UOB). Using their funds under the Supplementary Retirement Scheme (SRS), Singaporean retirees can apply through the operator’s internet banking portal.
  • Risk level: Low
  • Liquidity: High
  • Minimum: $500 minimum investment per bond
  • Fees: Non-refundable S$2 fee per transaction

Bonus: The best way to invest money for inflation

Believe it or not, inflation can be a good time to get in on certain market sectors. Consumer staples, for instance, are typically resistant to volatile periods. You can refer to this guide on commodities trading and ETFs.

5 steps to start investing

Now that you have an idea of the best ways to invest your money, here’s how to start.

1. Identify your goals, time frame and risk tolerance

  • Time horizon: Your time frame dictates your risk. The sooner you need the funds, the more liquid you want to keep them. This way, a dip in the market (which always recovers, but we don’t know how long it will take) won’t destroy the retirement fund you’ll need in a year.
    • If you’re nearing retirement, typically, a low-risk investment, such as bonds, is the way to go. You would earn less, but the risk is minimal compared to stocks or crypto.
    • If you’re younger, you have a long way to go before retirement so you might want to consider setting aside some funds for riskier investment options (like more speculative stocks or crypto).
  • Risk: Be honest about how much risk you can reasonably tolerate. Suppose it will be impossible for you to watch your portfolio drop in a downturn. In that case, you’ll want to use a Robo-advisor (which is immune to emotional investing!) or invest in lower-volatility assets like bonds. Remember, an easy way to hedge risk is through diversification — investing in different assets so that your entire portfolio doesn’t depend on the success of one investment.
  • Goals: Do you want to be highly involved in picking stocks? Are there some industries you aren’t comfortable investing in? Is your goal retirement, or do you have other shorter terms goals? The answers to these questions and those above will dictate how to invest your money in Singapore.

2. Decide how much help you need

Investors who are just starting or those who have never had the chance to manage their portfolio may consider using a Robo-advisor or consulting an expert. Investors who want to try their luck can always start by themselves, as many platforms have research tools and low barriers to entry. Make sure you use money that won’t impact your life if you lose it.

3. Depending on your goals and investment time frame, you can choose from the below accounts:

  • Open a custodian account: The brokerage platform offers a custodian account to store your investment. This account means that you have no direct ownership of these shares as they are held in custody by the firm. It also means that you will have to buy and sell stocks using the platform.
  • Open a Central Depository Account (CDP) with the Singapore Exchange (SGX). This account allows you to store investments that are registered under your name.

Most brokerages offer both a custodian account and a CDP-linked account, but you can review the pros and cons of having either using our online guide here.

4. Open your investment account

Depending on who manages your account, there are two types of investments accounts to choose from:

  • Standard account with an online broker. This is the most common option for those who want to place their own trades and choose their investments. You will need to open a stock trading account, which is easy and usually free.
  • Robo-advisor. This option is for those who want an algorithm to manage their account based on parameters set by the investor.

5. Deposit and invest

Once you open and fund your account, it’s time to put your money to work. Then, you can decide on the best way to invest, depending on your financial situation and goals.

How to start investing

Compare stock trading platforms

Name Product Brokerage Fee Market Access
Interactive Brokers
SGX stocks: $2.50
US stocks: $1 per share
SG, US, CA, AU, UK, IN, JP, HK, MX, FR & 17+ more
CFD service. Capital at risk. Take advantage of low trading fees, multiple platform support, and an extensive list of asset classes across global markets, including stocks, options, futures, forex, bonds, and funds.
Syfe
SGX stocks: N/A
US stocks: $1.49 per trade (regular pricing)
SG
Get $60 when you sign up on Syfe Trade (minimum deposit of $2,000 and make one trade). Promo code: 'TRADENEW'.T&Cs apply.
Saxo Markets
SGX stocks: $5
US stocks: $4
SG, US, CA, UK, AU, HK, CN, SG, JP, IT & 16+ more
Trade 19,000+ international stocks on global exchanges with brokerage fees as low as $5. Low-risk account is also available for beginners.
Tiger Brokers
SGX stocks: $1.99
US stocks: $1.99
SG, US, HK, CN, AU
Sign up and enjoy unlimited zero commission trades for US stocks for 180 days. T&Cs apply.
moomoo
SGX stocks: $0.99 per order
US stocks: $0.99 per order
SG, HK, US, CN, AU
Access Singapore, Hong Kong, US stocks and ETFs with one account. Enjoy free level 2 market data and lifetime commission-free trading on US stocks.
Maybank Kim Eng
SGX stocks: $25
US stocks: $20
SG, HK, MY, TH, US, UK
CFD service. Capital at risk.
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Compare up to 4 providers

Disclaimer: This information should not be interpreted as an endorsement of futures, stocks, ETFs, CFDs, options or any specific provider, service or offering. It should not be relied upon as investment advice or construed as providing recommendations of any kind. Futures, stocks, ETFs and options trading involves substantial risk of loss and therefore are not appropriate for all investors. Trading CFDs and forex on leverage comes with a higher risk of losing money rapidly. Past performance is not an indication of future results. Consider your own circumstances, and obtain your own advice, before making any trades.

Bottom line

Figuring out how to invest in Singapore depends on your financial goals, risk tolerance, level of involvement and time frame. There is no single best way to invest your money, but these five investment options (stocks, Robo-advisors, index funds, cryptocurrency and bonds) are good places to start when deciding how to invest in Singapore.

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