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Are there safe investments with high returns?

24 Feb 2022

Safe Investments with High Returns Singapore | VI

Ever wondered if there was a guaranteed way to quickly multiply your money without any risks? Well, we’re sorry to tell you there actually isn’t.

It isn’t to say that there are no “safe investments” out there. Safe investments exist but they aren't too many. But we get why you want to look for safe investments with high returns. We all want to invest in something that protects both our money and grows our earnings.

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Yet, we must acknowledge the fact that whenever we invest, even in safe investments with high returns, there will always be risks.

No investment ensures that you would not lose money but still promises to have huge returns. If you’re offered such a thing, run away because that’s a scam!

You'll need to sort out the possible scams from those that aren’t. As the first layer of protection, you might want to verify with government authorities if these investments are legitimate.

Then maybe you’ll ask: If that’s the case, are there any safe investments in Singapore that you can invest in?

Yes, there are a few of them. We’ve listed them for you in this article, but before we discuss each, let’s settle on what we mean by “safe investments” first and foremost.

Safe investments, anyone?

Safe investments with high returns | VI

A safe investment is an investment that does not involve a lot of risks.

Read that again with an emphasis on the last part -- “does not involve A LOT of risks.” This means to say there are still risks in safe investments, although they are lower than what is commonly associated with other investment vehicles.

As mentioned above, there's no such thing as a risk-free investment. When we invest, we always take some level of risk.

The amount of money you can earn is also related to the amount of risk an investment has. Hence, you’ll often hear about stocks being highly risky but with high returns. Conversely, investments with lower risks typically have lower returns. So, with safe investments, returns won’t be as high as well.

Another thing to note is the condition attached to most safe investments, which requires you to lock up your money with the investment for a long time. Hence, you should only invest what you don’t need and keep the rest for emergency use.

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5 safe investments in Singapore

Below are five of what are considered “safe investments” in Singapore.

We wouldn’t really say they have high returns if you’re looking for such, but these investment vehicles have lower risk versus the other available options. Likewise, they could protect your money and possibly help you outrun inflation.

Because these investments are known for being safe, this list can act as your starting point if you're afraid to invest your money.

1. Singapore Savings Bonds

Fixed-income investments issued by the government are most likely to protect both your cash and your rewards.

The Singapore Savings Bond (SSB), first introduced in October 2015, pays an increasing interest rate every year until the tenth year. This means that the bonds pay a lower return in the first few years, but if you do not redeem the bond before the tenth year, it continues to pay a greater rate each year.

If you have spare cash that you won’t need soon, you can invest it in SSB. Just by putting your money in this investment, you’ll get some returns after some time.

However, if we talk about the liquidity of government bonds, SSB generally offers better liquidity, which means you can withdraw your investment at any time.

Then again, it also means the interest rates will be lower as compared to other government securities that do not provide this same liquidity. Currently, the average return of SSB over 10 years is at 1.79%.

If you’re considering investing in SSB, you can buy these bonds through your bank. For more information about investing in SSB, visit the Monetary Authority of Singapore’s (MAS) website.

See also: Bonds -- Stirred and Not Shaken?

2. Savings plans

Perhaps you already know (or even have) this investment tied to your insurance policy in Singapore.

Many insurance companies offer savings plans to protect your money. So in terms of safety, savings plans are ideal. When you ask about the returns, however, this might not satisfy your criteria, as again, low-risk investments typically yield low returns as well.

>>> Do you really need insurance in Singapore?

Another thing you should consider is the liquidity of your money. Savings plans require you to lock your money up with the investment. What's the big fuss, you ask? Well... when the time comes, say an emergency, that you need a huge amount of money, this investment won’t be easily withdrawn.

Likewise, know that some plans require you to keep contributing funds or risk losing your initial investment. Hence, whenever you agree to invest in any savings plans (and any investment, for that matter), make it a habit to read and understand the terms attached to them.

Perhaps one thing to end off this section on a positive note is this fact: Most savings plans from insurance companies in Singapore are covered by the Singapore Deposit Insurance Scheme.

3. Fixed Deposits

Fixed deposits as safe investments Singapore | VI

So, we all know that we can receive interest when leaving our money in the bank. Well, Fixed Deposits (FDs) are something like that – except they give higher interest rates. And we’re pretty sure you know this investment option and may even have it already.

Banks such as DBS, OCBC, CIMB, and UOB offer fixed deposits. Of course, many other banks have fixed deposit programmes and promotional rates that might be better than the average rates.

Some banks may require you to have a savings account with a minimum amount of money inside, but they may come with requirements such as age limits and citizenship to qualify for the promotional pricing.

The advantage of this option is it’s quite safe as you don’t need to worry about the stock market volatility every single day. This is just like parking your extra cash in the bank so it earns some interest after some time.

And we believe you’ve already guessed its disadvantage. Similar to savings plans, FDs are not as liquid as stocks, although you can withdraw your investment after the lock-in or tenure period.

4. CPF top-ups

CPF top-ups are just like fixed deposits and savings plans, but with a 4% interest rate.

To get a 4% interest rate, all you must do is put CPF top-ups into your account. But since you can’t access the CPF money until you’re 65, you can think of it as more of a safe, which can only be unlocked with time.

Our CPF is backed by the government, so you can expect a guaranteed return of 4% each year. If this interest rate is not good enough for you, you can consider making voluntary contributions to any of your CPF accounts, although it’s also not a guarantee that the interest rate will be higher.

>>> Investing with CPF: All You Need to Know

And doing CPF top-ups is actually like “killing two birds with one stone.” Why so? Making top-ups into your CPF savings account entitles you to tax relief, as well as when you add money into a CPF savings account of someone related to you. Note, however, that when you make voluntary contributions to your CPF accounts, you will not receive any tax benefits.

5. Real estate

What if you have a million dollars in your bank account accumulating dust? Real estate could be a good choice for you.

Real estate may be a secure investment depending on location and demand. In addition, given favourable conditions, real estate gives a decent return. Whether you invest in commercial or rental property, you'll almost certainly earn a consistent income, allowing you to dodge the stock market's ups and downs.

However, as the long-term appreciation for real estate is still low, don’t expect to double your money. Real estate is also not a liquid investment as your funds are locked up until you can sell the property.

You must also know that there are hidden costs in property investing, such as maintenance fees and property taxes. It’s also not too easy to find tenants, be it for residential or commercial properties.

At the end of the day, real estate is one of the investments that require more attention from you, and it’s certainly not for everyone (regardless of how popular it may be in Singapore and other Asian countries).

An alternative you can consider is to invest in REITs or Real Estate Investment Trusts. It’s essentially investing in a company that invests in different types of real estate firms, including commercial and industrial properties.

There are no fully risk-free investments. Even the above-mentioned safe investments include risks. The idea is to think about your particular needs and build a portfolio that provides enough stability while allowing you to benefit from long-term growth.

To find out your needs and which type of investments are best for you, come join our free masterclass.


This article and its contents are provided for information purposes only and do not constitute a recommendation to purchase or sell securities of any of the companies or investments herein described. It is not intended to amount to financial advice on which you should rely.

No representations, warranties, or guarantees, whether expressed or implied, made to the contents in the article is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

We, 8VI Global Pte Ltd, disclaim any responsibility for any liability, loss, or risk or otherwise, which is incurred as a consequence, directly or indirectly, from the use and application of any of the contents of the article.