How to Choose the Best Fixed Return Investments in Singapore

Found yourself asking, "What fixed return investment in Singapore best aligns with my financial goals?" With the rising costs of living and inflation, more Singaporeans are considering different ways to secure a steady income stream while maintaining their financial stability.

With many different fixed income investments offering various returns, maturity dates, and risk levels, it can be confusing to figure out which option best fits your specific situation.

This article delves into the benefits of fixed return investments, the typical fixed income rate of returns, and steps on how to choose the fixed return investment that suits your needs.   

What are the Benefits of Fixed Return Investments?

Before we explore the different options available, let us examine the benefits of fixed return investments, and why they play a pivotal role in a well-rounded investment plan:

#1 Predictability and Stability of Returns

Fixed return investments offer predetermined interest rates, providing a predictable income stream free from market fluctuations. This certainty simplifies financial planning, making it easier for you to budget accurately for future expenses and major purchases.

#2 Lower Risk Compared to Equity Investments

At maturity, the principal amount you invested is typically returned along with a fixed interest. This means that fixed return investments generally involve a lower risk compared to equity investments like stocks, which may fluctuate in value. 

During economic downturns, riskier assets may plummet in value. By investing in fixed return options, you can protect your principal and avoid the stresses associated with market volatility. 

#3 Suitability for Conservative Investors Seeking Regular Income

Fixed return investments appeal to conservative investors with lower risk appetites. Whether you are a retiree preserving your savings or a working individual seeking to supplement your income, these investments provide a stable and reliable source of funds. They prioritise capital preservation and consistent returns, offering a dependable income stream. 

If you are investing to cover your living expenses, medical bills, children’s education, retirement, and other essential financial obligations, consider fixed income options. They provide you with peace of mind without the unpredictability of equity investments. 

#4 Simplified Investment Choices

Compared to equity investing which requires constant research and monitoring, fixed return investments often need less active management and complex decision-making. This straightforward, "set it and forget it" approach makes them suitable for investors who prefer simplicity, reducing the need to obsessively track market fluctuations. 

With fixed return investments, you can focus on your other priorities while knowing that your money is working for you. This ease of management makes them an attractive option for busy professionals looking for a hassle-free investment strategy.

#5 Portfolio Diversification

Diversification is one of the key strategies in managing investment risk, as it involves spreading your investments across various asset classes to reduce exposure to any single asset's poor performance. 

Fixed return investments complement more volatile assets like stocks and unit trusts. By including fixed return instruments in your portfolio, you can achieve a balanced mix that mitigates overall risk. This blend helps smooth out returns over time, providing a more consistent performance across different market conditions.

In short, fixed return investments offer numerous benefits to your financial portfolio. From predictability and stability, to lower risks and simplified management, these investments provide a solid foundation for helping you to build a secure financial future. 

How to Choose the Best Fixed Return Investments

With this overview of popular options, how do you select the ideal fixed-return investment for your needs? Let us look at some of your key considerations:

#1 Factor in Risk Tolerance

Assess your comfort level with varying degrees of risk. While fixed-return investments are typically lower-risk than equities, their risk profiles can vary. Understanding your ability to absorb potential losses helps you to make better decisions. 

#2 Look at Investment Horizon

Your investment horizon should match the timeline of your financial goals. Short-term investment products might be suitable for goals within the next 1 to 3 years, while investments with a longer term until maturity may be appropriate for goals that are more than 10 years away. 

You should also consider how soon you need to access your funds. Some fixed return investments may penalise early withdrawals or may be less liquid. 

#3 Understand Income Needs

Depending on whether regular income is required or if your goal is capital appreciation, different fixed return instruments can be chosen. Retirees might prefer investments that pay regular interest, while younger investors might opt for reinvesting interest payments to compound growth. 

#4 Evaluate Credit Ratings

Credit ratings, given by rating agencies, indicate the creditworthiness of issuers. Higher-rated bonds (AAA, AA) are considered safer but offer lower yields, while lower-rated bonds (BB, B) offer higher yields but come with an increased risk of default. Investors should select bonds that reflect their risk tolerance, with a focus on maintaining a balance between yield and security.

#5 Determine the Diversification Strategy that Works Best for You

Investing across different types of fixed return investments can help spread risk. By including investments from various issuers, different sectors, and geographic locations, you can diversify your financial risk. 

Implementing a laddering strategy, where investments are staggered across different maturity dates, can further provide both liquidity and exposure to different interest rates over time. Thus, fixed return investments can be part of a broader investment strategy that includes equities, real estate, and other assets to balance risk and return.

Ultimately, your priorities and financial goals will determine the right fixed return investment for you. By carefully considering your risk tolerance, investment horizon, and income needs, you can select the best options to achieve financial stability and growth.

Invest with BigFundr for Attractive Fixed Returns

If you are seeking higher returns than conventional fixed return options while protecting your capital, BigFundr’s real estate-backed Deals may be just right for you. Here are some reasons why BigFundr may be suited for your financial goals:

#1 Higher-than-Market Rate of Return

BigFundr offers attractive net interest rates of up to 6.38% per annum, easily outpacing inflation.  This rate significantly surpasses the typical returns of traditional fixed income instruments, providing a better growth opportunity for your funds. 

#2 Liquidity

BigFundr is more flexible than other fixed income instruments. With investment periods ranging from 6 to 18 months, you gain greater financial agility relative to the longer lock-in periods of other investment products). This flexibility gives you quicker access to your capital, enhancing liquidity without sacrificing potential returns.

#3 Capital and Interest Protection

BigFundr employs a robust multi-layered protection strategy, ensuring that your capital and interest are preserved. This comprehensive approach bolsters the security of your investment.

While equities offer high potential gains, they also carry greater volatility risks. BigFundr offers you the best of both worlds — providing capital protection alongside attractive inflation-beating returns, without exposing you to the turbulence of equity markets.

Sign up with BigFundr today to access these investment opportunities and fortify your portfolio with stability and growth potential: https://portal.bigfundr.com/BigFundr/SignUp.