The Best Short Term Investments in Singapore

Wishing to make your money work harder for you, even in the short term? Perhaps you are growing your funds for a dream vacation, a down payment on a car, or simply building a buffer for unexpected expenses. Short-term investments can be a fantastic way to achieve these financial goals.

This article is your guide to navigating the world of short-term investments in Singapore. We will explore what they are, see examples of short-term investments, and learn how we can choose the right ones.

What are Short-Term Investments?

Short-term investments are like temporary repositories for your money. These assets can be easily converted back into cash, typically within two years, allowing you to access your funds fairly quickly. They are ideal for individuals who want to earn a return on their capital without taking significant risks.

Here are some key characteristics that make short-term investments so attractive:

More Liquid: Relatively speaking, short-term investments are more liquid compared to long-term investments (like owning a property or an investment-linked policy). This allows investors to gain quicker access to their funds when needed.

Steady Returns: While not offering the highest potential returns, short-term investments can provide predictable and steady income. This can be helpful for those nearing retirement or needing a reliable source of income.

Lower Risk: Compared to long-term investments, short-term investments tend to be less volatile, meaning they experience smaller swings in value. This makes them a suitable choice if you are risk-averse and prioritise preserving your capital.

Goal-Oriented: Short-term investments are a great way to plan for and grow your funds for specific short-term goals, such as a down payment on a car, a vacation, or home renovations.

Shorter Maturity: The shorter maturity dates of these investments make them attractive to older investors like retirees who may not have the time horizon of younger investors.

How to Invest Short Term?

Ready to explore the world of short-term investments? Here are some pointers to get you started.

#1 Start with Financial Goals

Before diving in, take a moment to identify your short term financial goals. Are you aiming to grow your funds for a specific purpose, or simply looking to earn some extra interest on your idle cash?

Knowing your goals helps you determine the investment time horizon (when you'll need the money) and the level of risk you can tolerate.

#2 Gauge Risk Tolerance

Understanding your risk tolerance is also crucial. How comfortable are you with potential fluctuations in value? Do you have investments in other financial instruments?

Short-term investments generally carry lower risk than long-term options. However, some may be slightly riskier than others. Assess your comfort level with potential value fluctuations.

#3 Understand Market Trends and Investment Options

The financial landscape is dynamic, so staying updated on market trends and available short term investment options is essential. Doing so empowers you to make informed decisions and select the investments that offer the best potential returns for your situation.

#4 Always Diversify

Do not put all your eggs in one basket! Diversifying your short term investments across different asset classes and sectors helps you spread out risk. This strategy can help mitigate losses if one investment underperforms.

#5 Use Technology and Tools

Take advantage of financial tools and platforms that provide access to short-term investment products and valuable market insights. In Singapore, there are various financial planning apps as well as specialised investment platforms that offer tailored investment advice based on your financial profile and goals.

Long Term vs Short-Term Investment

The key difference between these two approaches lies in the investment horizon. The investment horizon is the total length of time an investor expects to hold a portfolio or an investment before taking the money back.

Long term investments are held for several years or even decades, offering higher returns through compound interest. Short-term investments, on the other hand, are ideal for more immediate goals within a shorter time frame.

Here is a quick comparison:

‍

BigFundr - a Stable and Consistent Short-Term Investing Option

Looking for a secure way to grow your money in the short term? BigFundr's real estate-backed investments offer several advantages compared to traditional short-term options:

#1 Fixed Returns and Principal Protection

Unlike the uncertainty of the stock market, BigFundr prioritises security. Our investments offer protected principal and interest through a legally binding contract between BigFundr and Maxi-Cash*. This ensures you receive your initial investment amount back in full, along with the promised interest payments.

#2 Short Investment Horizon

Short-term investment goals like upcoming vacations, down payments, or emergency funds require quick access to your capital. BigFundr's investment options typically have maturities of 18 months or less, aligning perfectly with these short-term needs. This compares favourably to long-term investments that may lock your money away for years.

#3 Reduced Market Volatility

Short-term investments are generally less susceptible to market fluctuations than long-term options. BigFundr further mitigates risk by focusing on real estate-backed loans. Real estate has a history of providing stable returns, and the property itself acts as collateral for the loan, adding another layer of security.

#4 Transparency and Control

BigFundr prioritises transparency. Each investment opportunity comes with a comprehensive fact sheet detailing the project. This allows you to make informed decisions based on your specific goals and risk tolerance. Additionally, your funds are held securely by an independent cash administrator until all contractual requirements are met, ensuring your investment is protected.

#5 Competitive Returns

BigFundr's short-term real estate investments offer attractive interest rates, typically exceeding 6% per annum (as of July 2024 as interest rates may vary due to market conditions). This allows you to predictably maximise your returns within a shorter time frame.

By combining guaranteed returns, short investment horizons, reduced market volatility, transparency, and competitive returns, BigFundr provides a compelling option for Singaporean investors seeking a secure and potentially rewarding short-term investment strategy.

Sign up for a free BigFundr account today and explore the possibilities!

‍