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Best Investment Options for Risk-Averse Singaporeans

When it comes to investing, there are a lot of different options to choose from, each with its own level of risk and potential reward. For some investors, the possibility of earning high returns is worth taking on more risk, while others prefer to play it safe with low-risk investments that offer a stable return on investment.

In Singapore, there are many investment options available for those who are risk-averse. These options range from savings accounts and fixed deposits to government bonds, exchange-traded funds (ETFs), blue-chip stocks, real estate investment trusts (REITs), and even commodities like gold. Each of these investment options has its own set of advantages and disadvantages, and choosing the right one can be a challenge.

In this article, we will explore some of the best investment options for risk-averse Singaporeans. Whether you are a seasoned investor or just starting out, this article will provide you with the information you need to make wise investment decisions that align with your risk tolerance and financial goals.

Understanding Risk Aversion

Risk aversion refers to the tendency of individuals to avoid uncertainty and prefer guaranteed outcomes. This means that risk-averse investors are more concerned with preserving their capital than earning a high return on investment. They are willing to accept lower returns as long as the investment is relatively safe. 

Risk comes from not knowing what you’re doing.

Warren Buffett

Why Do Singaporeans Prefer Low-Risk Investments?

According to a survey conducted by Legg Mason in 2015, global results show that 81 per cent are optimistic about their investments in 2015, yet the figure fell to 63 per cent for the Singapore investors surveyed.

This is due to the country’s culture of savings and the government’s efforts to promote financial literacy. Singaporeans are also wary of market volatility and economic uncertainties, which is why they prefer low-risk investments that offer a stable return on investment.

Why Do Singaporeans Prefer Low-Risk Investments

Factors to Consider Before Investing

Before investing, there are several factors that risk-averse investors should consider. These include:

  • Investment horizon: The length of time an investor plans to hold an investment.
  • Risk tolerance: The level of risk an investor is willing to take.
  • Investment objectives: The financial goals an investor hopes to achieve through investing.
  • Diversification: Spreading investments across different asset classes to reduce risk.

6 Investment Options for Risk-Averse Singaporeans

Here are the best investment options for risk-averse Singaporeans:

1. Savings Accounts and Fixed Deposits

Savings accounts and fixed deposits are low-risk investments that offer a guaranteed return on investment. They are also highly liquid, which means that investors can access their funds at any time. However, the interest rates for savings accounts and fixed deposits are relatively low, which may not keep pace with inflation.

BankType of AccountInterest Rate (p.a.)
DBSMultiplier AccountUp to 4.1%
UOBOne AccountUp to 7.8%
OCBC360 AccountUp to 4.65%
Comparison of Bank Savings Account Interest Rate as of May 2023

Please note that the interest rates mentioned are subject to change based on various factors, such as market conditions and individual bank policies. It is always recommended to check with the respective banks for the latest interest rates and terms and conditions.

2. Singapore Savings Bonds (SSB)

Singapore Savings Bonds (SSBs) are a low-risk investment option offered by the Singapore government. SSBs are designed to be a safe and flexible investment option for Singaporeans. They offer a higher return than savings accounts and fixed deposits, and the longer an investor holds an SSB, the higher the interest rate.

YearInterest RateAnnual Return
5 Year Chart of SSB Annual Returns

As you can see from the table, the interest rates and annual returns of SSBs have remained relatively stable over the past 5 years. This stability makes SSBs an attractive investment option for risk-averse Singaporeans who prioritise safety and stability over high returns.

3. Exchange-Traded Funds (ETFs)

Exchange-Traded Funds (ETFs) are a type of investment fund that is traded on stock exchanges. They are designed to track the performance of a particular market index or sector. ETFs offer a low-cost way for investors to diversify their portfolio across different asset classes. They are also highly liquid, which means that investors can buy and sell them easily.

Example: One example of an ETF is the SPDR S&P 500 ETF Trust (SPY), which tracks the performance of the S&P 500 index. Another example is the iShares Core MSCI World ETF (IWDA), which tracks the performance of global equity markets.

YearSPY ETF Performance
5 Year Performance of SPY

As you can see, the SPY ETF has had a positive performance in four out of the past five years, providing investors with a good return on investment. While there was a small loss in 2018, the ETF bounced back with strong performance in subsequent years. Overall, this table shows that the SPY ETF has been a stable and profitable investment option for risk-averse Singaporeans over the past 5 years.

Read more: Why ETFs Should Be Part Of Your Investment Strategy

4. Blue-Chip Stocks

Blue-chip stocks are considered to be some of the safest investments available because they are backed by companies with a long track record of stability and reliability. They offer a steady dividend income and are less volatile than other stocks. However, they may not offer as high a return as other stocks. 

Example: One example of a blue-chip stock in Singapore is DBS Group Holdings Ltd., which is one of the largest banks in Southeast Asia. DBS has a strong track record of profitability and has consistently paid dividends to its shareholders over the years. 

YearDBS Stock Price
5 Year Stock Prices of DBS

This chart shows the trend of DBS Group Holdings Ltd. stock prices over the past five years. As we can see, there have been fluctuations in the stock price over the years, but overall, the trend has been upward. This illustrates the stability of the company’s stock and its potential as a low-risk investment option for risk-averse Singaporeans.

5. Real Estate Investment Trusts (REITs)

Real Estate Investment Trusts (REITs) are a type of investment fund that invests in real estate assets. They offer a low-risk, fixed-income investment that is backed by tangible assets. REITs are also highly liquid, which means that investors can buy and sell them easily. They offer a steady income stream from rental income and are a good option for risk-averse investors who want exposure to the real estate market. 

Example: One example of a REIT in Singapore is Mapletree Commercial Trust, which owns and manages a portfolio of commercial properties in Singapore. Mapletree Commercial Trust has a strong track record of stable dividend payments and has consistently outperformed the market. 

YearMCT Stock Price
5 Year Stock Prices of MCT

Investing in REITs like MCT can offer a reliable source of income through dividend yields, which can provide investors with a steady stream of passive income. However, it is important to note that past performance is not a guarantee of future returns, and investors should conduct their own research and seek professional advice before making any investment decisions.

6. Gold

Gold is another investment option that Singaporeans may consider. Historically, gold has been viewed as a safe-haven asset during times of economic uncertainty, as its value tends to increase when other investments, such as stocks, decrease in value. In 2020, for example, the COVID-19 pandemic caused significant market volatility, leading to a surge in demand for gold as investors sought a safe place to store their wealth.

However, it’s important to note that investing in gold also comes with risks. Gold prices can be influenced by a range of factors, including global economic conditions, geopolitical tensions, and fluctuations in currency exchange rates. Additionally, gold does not provide any income, meaning that investors are relying solely on its price appreciation to generate returns.

Why Do Singaporeans Prefer Low-Risk Investments

Finding the Right Investment Strategy for Your Financial Goals

Investing can be a daunting task, especially for risk-averse investors. However, there are several low-risk investment options available that offer a stable return on investment. Savings accounts and fixed deposits, Singapore Savings Bonds, government bonds, ETFs, blue-chip stocks, REITs, and gold are all excellent investment options for risk-averse Singaporeans.

This blog post is for informational purposes only and should not be construed as professional advice. The information provided is based on research and personal experience, and may not be suitable for every individual’s financial situation.


What are some investment options available in Singapore?

Some common investment options in Singapore include stocks, exchange-traded funds (ETFs), real estate investment trusts (REITs), savings accounts, fixed deposits, and Singapore Savings Bonds (SSBs).

Are there any risks involved in investing in Singapore?

Yes, there are risks involved in any type of investment, including those in Singapore. Market fluctuations, economic downturns, and other unforeseen events can affect the performance of investments. It is important to do your research and consult with a financial advisor before investing.

How can I choose the best investment option for me?

The best investment option for you will depend on your financial goals, risk tolerance, and personal circumstances. It is important to do your research, consult with a financial advisor, and carefully consider the potential risks and rewards before making any investment decisions.

Is it possible to invest in international markets from Singapore?

Yes, it is possible to invest in international markets from Singapore through various investment platforms and brokerages. However, it is important to be aware of the potential risks and tax implications of investing in foreign markets.

Eugene Chai

Eugene Chai is a seasoned financial expert with over 4 years of experience. His work has graced the pages of prominent Singapore Investment sites. He has also been featured on Channel News Asia - Money Talks. With a passion for simplifying complex financial concepts, he empowers individuals to make informed decisions about their money. Whether it's investment strategies, personal finance, or market trends, Eugene's insights are a beacon of clarity in the world of finance.

Comments (1)

  • My Experience with Options Trading: Making $200 a Weeksays:

    May 28, 2023 at 12:39 pm

    […] Personally, as part of my investment learning journey, I will also be looking forward to trying out new option strategies and also attempting to be more aggressive in terms of Risk/Reward ratio. I am aiming to make at $400/week via options trading which could add up to an additional income of $1,600 a month. Find out more on other investment options for risk averse Singaporeans. […]

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