How to generate more than 2% interest?

hardwaregone

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I've already topped up CPF SA, not planning for more.

I've about 80k recovered from the 6 months Tbill that had expired. How should i get the best from it?

Prefer something very safe.
BTW I already have about 100K on SSB, bought a few months ago when first year interest was 1.88 pct.

I'm not sure about dividend stock or ETF, so haven't invest in them.
 
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hardwaregone

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Do you have a bank account like DBS Multiplier or UOB One?
No for either but DBS multiplier seems to need me to do a lot of things?
The thread itself is very lengthy, also it doesnt' cover interest for all my 80k right?
 

Shiny Things

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I've already topped up CPF SA, not planning for more.

I've about 80k recovered from the 6 months Tbill that had expired. How should i get the best from it?

Prefer something very safe.

Doesn't exist, sorry mate. You can either have "very safe" or "yield greater than 2%"; you can't have both.

Your alternatives:
1) Singapore government bonds. Rock-solid safe, but low yields (about 1.5-1.6% from the 1-year out to the 5-year); if you want a 2% yield you have to buy the 30-year.
2) High-grade corporate bonds. Generally safe (there is a slight risk of the company defaulting on its debt, but that's why you buy an ETF that owns bonds from a wide range of different companies); and a good SGD corporate-bond ETF like MBH yields about 2.5%.
 

luvalist

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Do u spend?
Uob one 75k. Set up 3 giro and spend $500 per month. More straightforward than multiplier?

No for either but DBS multiplier seems to need me to do a lot of things?
The thread itself is very lengthy, also it doesnt' cover interest for all my 80k right?
 

testingabc

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if you want very safe, put 75K into maybank isavvy savings account, then musical chair with isavvy-i. currently 1.9% without much requirements, i also do that but i take a risk put above sdic guarantee amount.
 

hardwaregone

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Doesn't exist, sorry mate. You can either have "very safe" or "yield greater than 2%"; you can't have both.

Your alternatives:
1) Singapore government bonds. Rock-solid safe, but low yields (about 1.5-1.6% from the 1-year out to the 5-year); if you want a 2% yield you have to buy the 30-year.
2) High-grade corporate bonds. Generally safe (there is a slight risk of the company defaulting on its debt, but that's why you buy an ETF that owns bonds from a wide range of different companies); and a good SGD corporate-bond ETF like MBH yields about 2.5%.
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?
 

tangent314

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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.
 

weng0202

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No need think so much for 80k. 0.1% is like a difference of $80 a year? Might as well spend the time go and earn that $80.
 

MikeDirnt78

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No for either but DBS multiplier seems to need me to do a lot of things?
The thread itself is very lengthy, also it doesnt' cover interest for all my 80k right?

You just need to do simple things.

Not difficult to earn 2.X% interests.
 

hardwaregone

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I'm just wondering about REITs ETF.

Are they worth a consideration to be part of my portfolio?
 

hardwaregone

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You just need to do simple things.

Not difficult to earn 2.X% interests.
If I already have a dbs account, must I open a new account or can convert the DBS saving account?


My housing loan is by hdb, so can't be switching to DBS.
For the insurance, what are the good options that don't take too much of my interest
 

MikeDirnt78

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If I already have a dbs account, must I open a new account or can convert the DBS saving account?


My housing loan is by hdb, so can't be switching to DBS.
For the insurance, what are the good options that don't take too much of my interest

Yes you must open a DBS Multiplier account. It is free.

You can credit your salary there.

You can apply a POSB Everyday credit card. Buy an ice cream from Mcdonalds each month.

You can sign up for POSB Invest Saver to buy the lowest risk ETF.

You can sign up for an insurance plan.

The extra interests will be more than enough to cover the cost of your insurance plan. In other words, your insurance is free and you get higher interests.
 

kkcheng77

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Not sure what does your "very safe" means. My very safe investment is in China Taiping i-save Endowment. Guaranteed return of 2.28% p.a. for 3 years.

Fully subscribed for now. You have to wait for next tranche.
 

Gattberserk

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Not sure what does your "very safe" means. My very safe investment is in China Taiping i-save Endowment. Guaranteed return of 2.28% p.a. for 3 years.

Fully subscribed for now. You have to wait for next tranche.

There is also NTUC CSN available to put your 80K in. 2.3% pa per year for 3 years.
 

lavive_gp

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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.

Also note a downside of an ETF composed on Bonds:
at the time the interest rates go up, the market prices of bonds will decrease and your invested money will too.
If you had bought the bonds directly, you could always hold the bonds to maturity and you are sure to get your principal and interest back (assuming no default happened of course).
The net effect is that the market price of the bond ETF will be somewhat exposed to interest rate volatility, which is a risk to accept.
So a Bond ETF doesn't solve the problem, and is also partially exposed to one of the underlying companies default (which would lower the Bond ETF value should it happen).
There's no miracle product without risks to assess and accept.
 
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