Am a fresh grad starting work (3.4k). Should I save or invest 1.5k/mth for 5 years in order to get ~100k to pay off my BTO share by 2025-2026?

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Hi anon, great question!

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Firstly, i would like to point out that not all debt it bad. By paying the entire BTO in cash, you may be at risk of runnning low on liquidity when you need it. Considering that HDB loans have reasonable interest rates, I would be comfortable slowly paying off that debt instead.

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Furthermore, 5 years is too short a time period for me. Anything can happen in the next few years. it is possible that a severe market crash may occur and you will not want to liquidate positions at a loss to pay for your housing.

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All things considered, I personally would not strive to pay the majority of HDB by cash. Instead, I would set aside cash in a high interest account for a HDB downpayment and invest the rest. If you are able to save more, you can contribute it to the savings account and try to pay as much of the HDB as you can. but I think that trying to payoff the whole thing at one go may not be the best plan.

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Hope this helps!

Hi this is a good consideration. With 5 years, I would be alright to put the money into relatively safe investments through stashaway (if that is your preferred medium).

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However do keep a close look on your investments, I would actually recommend taking out the sum in the next 1-2 years as your horizon shortens (depending on market conditions at that point in time)

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What happens next would be to place this money into liquid, high interest accounts such as:

1) Syfe Cash + (not capital guaranteed, 1.5% p.a)

2) Singtel Dash Pet (capital guaranteed, currently around 1.2%)

3) Your personal HISA (High interest savings account) or short term endowments/fixed deposits at that point in time.

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With interest rates at all-time low (highest being 1.5% at any bank), i suggest loaning the money AS LONG AS possible, and not repaying it.