Why Trust MoneySmart?If you’re new to investing in Singapore, start by building your financial foundations:
Set aside an emergency fund covering 3 to 6 months of essential expenses
Pay off high-interest debts such as outstanding credit cards monthly bills or personal loan debts.
Next, define your financial goals: Are you investing for retirement, a home, or your child’s education? And be honest about your risk tolerance.
For most beginners, a sensible next step is to choose simple, diversified investments like low-cost index funds or exchange-traded funds (ETFs). These options help you grow your money steadily, without the need for active, complicated decision-making.
Common investment options for beginners
Index funds
These funds invest in a basket of stocks designed to track a market index, such as the Straits Times Index (STI). Index funds spread your risk by investing across many companies and usually come with lower fees thanks to passive management. You can buy them through banks, online investment platforms, or through MoneySmart's online brokerage comparison platform for limited promotions.
Exchange-traded funds (ETFs)
ETFs pool investors' money to buy a diverse selection of stocks or bonds, then list the fund on a stock exchange so you can buy or sell units any time during trading hours. They typically have lower minimum investment amounts, are straightforward to understand, and are popular for their simplicity and cost-effectiveness.
Workplace retirement plans
The Central Provident Fund (CPF) is Singapore’s national retirement scheme, with both employer and employee contributions. For those looking to save more, the Supplementary Retirement Scheme (SRS) offers additional, voluntary retirement savings opportunities with tax benefits.
READ: Best Ways to Invest With Your SRS Account
Robo-advisors
Digital investment platforms like Endowus, Syfe, and StashAway use algorithms to create and manage a diverse investment portfolio for you, based on your goals and risk appetite. With low management fees (e.g. 0.2%–0.8%) and the ability to start with smaller amounts, robo-advisors take care of investing for you.
High-interest savings accounts
For those building an emergency fund or needing a place for short-term goals, local banks like DBS, UOB, and OCBC offer savings accounts with higher interest rates when you meet specific criteria (like salary crediting or spending targets). Check out the best high-interest savings accounts in Singapore to find the one that matches your needs, facilitating your savings grow a little faster with minimal risk.
Important steps for new investors
Build up an emergency fund equivalent to around three to six months of core living expenses in a higher-interest savings or fixed deposit account.
Pay off high-interest debts before you start investing, as the cost of debt can cancel out potential investment gains.
Set clear investment goals and timelines. Invest more aggressively for long-term goals (like retirement), keep things conservative for short-term targets (like buying a home).
Open an investment or retirement account through a reputable, MAS-regulated platform. Many local banks and online brokers in Singapore make this easy.
Automate your investments where possible. Scheduling regular, automatic contributions helps you stay consistent and avoid emotional or impulsive investing decisions.
Disclaimer
This article contains general information only and is not financial advice. Always consult a qualified financial adviser in Singapore to create an investment plan tailored to your objectives, needs, and circumstances.
