Best way to invest capital of $10K for short term of 2 years?

I already have $10K saved as emergency fund so I'm willing to grow my other $10K when serve my 2 year NS. I don't want the money to be just sitting in the bank for the next 2 years so what's the best way to grow the amount within a short 2 year period? I'll also be saving a bulk of my NS income so I can afford a bit of risk.

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James ng

29 Jul 2020

Don’t invest money you need in 2 years. It’s extremely risky. You never know what will happen when you want to liquidate your investment in 2 years.

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Joey Gaeth

29 Jul 2020

BSc Economics at London School of Economics and Political Science

Since you'll be in NS, that means DIY-investing is out as you won't have the time to monitor the stock market. Fixed deposits now are at its worst rates due to covid, so i don't recommend that either although it's safe and guaranteed. I'll list down various options you can consider, starting from convenience and easy to liquidate options.

1) You can leave your other $10k in a high-yield savings account such as 2.50% in Singlife, or 1.00% SCB jumpstart account. The SCB jumpstart also comes with a debit card that gives 1.00% cashback for all mastercard transactions which is quite great for students.

2) You can set a recurring transfer monthly (DCA) into several robo-advisors. I'm currently using both Stashaway and Syfe and i'd say my returns on Stashaway is relatively higher (+10.29% time-weighted), which could be due to me investing in it during the 2018 us-china trade war when prices are low and during march and april covid i DCA $20 DAILY. You can either go for Stashaway or Syfe Equity100.

3) You can lump-sum into three etfs (S$3333 into each) and just let it hold out for the next 2 years and see your capital grow. For this, you can consider IWDA for world diversification, CSPX/VUSD for US growth and CQQQ/KWEB for china tech.

4) Lastly, you can buy an endowment plan that give u guaranteed returns. But do take note that some or most do not allow you to withdraw during the time period. You can consider NTUC Grow Capital Ease-2year with 1.85% guaranteed return (min $5000), or Great Eastern Great SP-2year with 1.80% guaranteed return (min $10k), or Etiqa Tiq-3year with 2.10% guaranteed return (min 10k).

You have to consider whether you prefer safe guaranteed returns, or higher returns with risks involved. And also whether you will ever need the $10k during the next 2years of NS because if you ever need it, you might not want to consider endowment plans at all.

Hope the above did help you a bit in deciding what are your best options!! All the best.

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