Low Risk, High Interest, Capital Guaranteed Options: Where To Put $10K Savings Now?
So you’ve got some money squirrelled away.
Maybe it’s an emergency fund (aka rainy day fund).
Maybe it’s money that you’ve earmarked for a wedding or the downpayment of an HDB BTO flat.
Or maybe it’s money that you want to invest, but you haven’t quite figured that sh*t out yet.
How now brown cow?
Well, there’re tonnes of financial instruments out there…
So… which one should you go with?
Let’s take a closer look.
Note: the options listed here are correct as of time of writing and will change as we periodically review what are the best options in the market.
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TL;DR: What Kind of Low Risk, High Interest, Capital Guaranteed Options Are There?
Based on the criteria I set out:
- Capital is protected (low risk)
- Fuss-free (no multiple conditions like credit card spend, salary crediting, insurance or investment purchases)
- High liquidity (no withdrawal fees, no early withdrawal penalties, no restrictions and can be withdrawn anytime)
- High interest (definitely higher than the 0.05% base interest given by banks; naturally as high as possible)
- High account limit (no cap or limits preferable)
These are the best options for now:
| If I Have... | Singlife Account (up to 2.5% p.a.) | Standard Chartered JumpStart (1% p.a.) | CIMB FastSaver (0.5% p.a.) | Total Rate of Return After 1 Year | Best For |
|---|---|---|---|---|---|
| $10,000 | $10,000 | - | - | $250 | Only have $10k |
| $20,000 | $10,000 | $10,000 | - | $250 + $100 = $350 | Under 26 years old |
| $20,000 | - | - | $350 | Older than 26 years old | |
| $10,000 | - | $10,000 | $250 + $50 = $300 | Older than 26 years old and want a little more guarantee |
What Kind of Low Risk, High Interest, Capital Guaranteed Options Are There?
Whatever I’m about to discuss here aren’t necessarily the best financial products to use if you’re looking to grow your income or increase your wealth.
Instead, the options listed here are the best if you:
- have emergency savings which you want to have on standby but want to at least beat inflation
- have savings for an upcoming short-term goal or life event (eg. wedding, downpayment for a property)
- have excess funds, which you haven’t deployed in your investments (eg. waiting for the right opportunity or still learning)
And you don’t want to leave it in your regular bank savings account which gives you a base 0.05% interest rate.
Therefore, here is my criteria:
- Capital is protected (low risk)
- Fuss-free (no multiple conditions like credit card spend, salary crediting, insurance or investment purchases)
- High liquidity (no withdrawal fees, no early withdrawal penalties, no restrictions and can be withdrawn anytime)
- High interest (definitely higher than the 0.05% base interest given by banks; naturally as high as possible)
- High account limit (no cap or limits preferable)
Why not Fixed Deposits?
With fixed deposits you’ll be lucky to find a promotional rate that gives you more than 1% p.a.
The tenor for a fixed deposit can range anywhere between 1 month to 3 years.
And the deposit required ranges anywhere from as little as $500 to a minimum of $50,000 just to qualify.
But the biggest problem is how illiquid a fixed deposit is.
Technically, you could withdraw it anytime you want, but you’ll probably receive no or very little interest in return.
Or in the worse case, might have to pay early withdrawal fees.
Why not Singapore Savings Bonds?
SSBs are damn inflexible.
For the SSB issued in October 2020, you’d have to hold it for the full 10 years in order to get an average annual return of 0.90%.
That’s barely enough to even beat inflation.
Even though there’s no penalty if you choose to redeem the bond (in multiples of $500) anytime.
You’ll still need to pay a $2 transaction fee for every redemption request.
Why not Cash Management Accounts?
Since your cash account is invested in various funds in order to grow your capital.
This means that your capital is NOT guaranteed.
I know that there’s a case for keeping your money with the robo advisor or brokerage which you’re already or are planning to invest with.
And accounts like StashAway Simple give up to 1.4% p.a. (note: it’s up to, and this amount is correct as of time of writing)
But you’ll also have to contend with longer withdrawal times — between 1 to 3 business days.
If you need access to the money urgently.
And since your money is being invested in funds, whatever you can take out at that point.
Is subjected to prevailing market conditions.
Option 1: High-Interest Savings Account
Yep.
Even in this low-interest-rate environment where banks are cutting their interest rates left and right.
Your best bet is still a high-interest savings account.
The only downside I can think of is that these accounts are subject to the whims of the banks.
There’s no telling when they’ll revise their interest rates or the conditions required in order for you to enjoy a preferred interest rate.
With this in mind, here are a few fuss-free ones to consider:
1) Standard Chartered JumpStart Account
| Standard Chartered JumpStart Account | Criteria |
|---|---|
| Interest | 1% p.a. (First $20,000) 0.1% p.a. (Above $20,000) |
| Initial Deposit | No minimum |
| Fall Below Fee | None |
| Minimum Balance | None |
| Age Requirement | 18 to 26 years old |
| SDIC Protection | Yes |
If you’re 26 years old or younger, then this is a solid option as you get 1% p.a. for the first $20,000.
2) CIMB FastSaver Account
| CIMB FastSaver | Criteria |
|---|---|
| Interest | 0.5% p.a. (First $50,000) 0.8% p.a. (Next $25,000) 1.5% p.a. (Next $25,000) 0.4% p.a. (Above $100,000) |
| Initial Deposit | $1,000 |
| Fall Below Fee | None |
| Minimum Balance | None |
| Age Requirement | 16 years old and up |
| SDIC Protection | Yes |
If you’re older than 26 years old, CIMB FastSaver is an alternative, fuss-free option which gives you up to 1.5% p.a. for balances under $100,000.
Option 2: Insurance Savings Plan Accounts
If you’re looking for a comparison between Etiqa’s GIGANTIQ vs Singtel Dash EasyEarn vs Singlife Account.
We’ve covered that before.
Based on the criteria I set out, your best bet would be:
1) Singlife Account
| Singlife Account | Criteria |
|---|---|
| Rate of Return | Up to 2.5% p.a. (First $10,000) Up to 1.0% p.a. (Next $90,000) 0% p.a. (Above $100,000) (Above $100,000) |
| Initial Deposit | $500 |
| Fall Below Fee | None |
| Minimum Balance | $100 (to enjoy the rate of return) |
| Age Requirement | 18 to 65 years old |
| SDIC Protection | Yes (Under PPF Scheme) |
Some Other Considerations To Think About…
Based on my ultra-strict, fuss-free criteria, I would naturally not consider GIGANTIQ and Dash EasyEarn.
Their bonus rate of return is only valid for the first year so after that I’ll need to move the money again.
And you’ll have to pay withdrawal fees (between $0.50 to $0.70, depending on your mode of transfer).
But seriously, if I’m chucking $10k in, that $0.70 withdrawal fee is chump change.
Plus if you look closely, GIGANTIQ and Dash EasyEarn both give a guaranteed rate of return of 1% and 1.5% respectively.
Without you having to do anything else.
That’s pretty decent actually.
So if you only want to deal with insurance savings plan accounts (because you like the savings + protection element), here’s my gameplan…
If I Have $10,000
Singlife Account: $10,000 (up to 2.5% p.a.) = up to $250
If I Have $20,000
If I Wanna Max My Returns…
Singlife Account: $10,000 (up to 2.5% p.a.) = up to $250
Dash EasyEarn or GIGANTIQ: $10,000 (2.0% p.a.) = $100 (go with GIGANTIQ if you’re a DBS or POSB customer as the withdrawal fee is lower via Direct Credit)
If I Wanna Play Safe…
Dash EasyEarn or GIGANTIQ: $20,000 (2.0% p.a.) = $200 (go with GIGANTIQ if you’re a DBS or POSB customer as the withdrawal fee is lower via Direct Credit)
If I Have $30,000
If I Wanna Max My Returns OR Play Safe…
Singlife Account: $10,000 (up to 2.5% p.a.) = up to $250
Dash EasyEarn or GIGANTIQ: $20,000 (2.0% p.a.) = $200 (go with GIGANTIQ if you’re a DBS or POSB customer as the withdrawal fee is lower via Direct Credit)
What’s the Maximum Amount of Money I Can Get Based on Different Scenarios
Given that the Singlife Account potentially gives me up to 2.5% p.a.
I’m more likely to put my money there first and adopt a see how approach.
If the rate of returns aren’t that great, I can always switch it around.
If I Have $10,000
Singlife Account: $10,000 (up to 2.5% p.a.) = up to $250
If I Have $20,000
If I’m 26 years old and below…
Singlife Account: $10,000 (up to 2.5% p.a.) = up to $250
SCB JumpStart Account: $10,000 (1% p.a.) = $100
~
If I’m older than 26 years old…
Singlife Account: $10,000 (up to 2.5% p.a.) + $10,000 (up to 1.0% p.a.) = up to $350
OR
Singlife Account: $10,000 (2.5% p.a.) = up to $250
CIMB FastSaver Account: $10,000 (0.5% p.a.) = $50
Note: I would go with the latter option if you want a little more guarantee.
.
.
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If I would like a more guaranteed approach and expand my criteria a bit.
If I Have $10,000
Dash EasyEarn or GIGANTIQ: $10,000 (2.0% p.a.) = $100 (go with GIGANTIQ if you’re a DBS or POSB customer as the withdrawal fee is lower via Direct Credit)
If I Have $20,000
If I’m 26 years old and below…
SCB JumpStart Account: $20,000 (1% p.a.) = $200
Note: whether or not you use the SCB JumpStart account, just open one first, you can come back to it anytime as a fuss-free 1% safe haven.
There aren’t any fall below fees or minimums to be met anyways.
Once you’re past 26, this option is forever off the table!
OR (if you want a bit of protection with the insurance element)
Dash EasyEarn or GIGANTIQ: $20,000 (2.0% p.a.) = $200 (go with GIGANTIQ if you’re a DBS or POSB customer as the withdrawal fee is lower via Direct Credit)
If I’m older than 26 years old…
Dash EasyEarn or GIGANTIQ: $20,000 (2.0% p.a.) = $200 (go with GIGANTIQ if you’re a DBS or POSB customer as the withdrawal fee is lower via Direct Credit)
