BTW I already have about 100K on SSB, bought a few months ago when first year interest was 1.88 pct.
If you like SSBs, you'll be happy to know that the individual cap has been raised to $200k so you can buy another $100k if you like.
I'm not sure about dividend stock or ETF, so haven't invest in them.
Dividend stocks are nothing special. ETFs can be good though if you select one that is suitable for the risk profile you want.
If I purchase an etf which own bonds from various companies. It means that if one of them default, I still won’t lose most of my money right?
Can I sell my etf anytime? How does it give me 2.5 pct? They release dividend?
Yes, ETFs give you the diversification such that one failing company won't drastically affect your investment. It would depend on how many percent is being invested in that company.
ETFs are traded on the stock markets so can be bought and sold anytime the stock markets are opened. However if you purchase through an RSP program like POSB Invest Saver, OCBC BCIP or FSMOne RSP, then the buy/sell may only happens once or twice per month on a fixed dates.
ETFs use the dividends/coupons they receive to purchase more shares/bonds, which will increase the price and value of the ETF. ETFs can be accumulating or distributing. The accumulating will not distribute dividends, and instead continue to let the prices rise until you decide to sell off the ETFs. The distributing ones will sell some of the assets to pay out the ETF owners as dividends. Each time that happens you can see the value of the ETF drop by a corresponding amount.