What kind of short term savings / investment products should I be using?

I've started pursuing a part time degree for which I have taken a tuition loan for. I already have some savings put aside in my DBS Multiplier to repay in the future. What product would you recommend I use withthis amount of money to get as much gain until the payment is due? (To repay without interest, this is due 4 years frm now!)

Considering that I don't have a good safety net (6 months of my current salary) in my savings account should I wait until I hit that number before I start anything

DBS/POSB Multiplier Account

2

Discussion (2)

What are your thoughts?

Learn how to style your text

Hariz Arthur Maloy

26 Dec 2019

Independent Financial Advisor at Promiseland Independent

Hey Anon, yeah start with bumping up your cash savings to 6 months of expenses for emergencies.

For products to consider for a commitment in 4 years, I'd go for short term bonds, money market instruments, fixed deposits, short term endowment plans.

All these provide a capital guarantee so you are unable to lose money, and give you a high 1.xx to low 2.xx percentage yield.

But since most High Interest Savings accounts already give you that, you can keep money there too.

Just make sure you stay out of the equity markets.

Reply

Save

Pang Zhe Liang

26 Dec 2019

Lead of Research & Solutions at Havend Pte Ltd

Firstly, we need to have a complete understanding on our cashflow. Through this process, we will understand our earning ability and spending habit. Here is a guide to help you: https://www.blog.pzl.sg/understanding-your-pers...

Next, do a detailed calculation to understand the total fee due upon graduation. From there, work backwards to understand how much money you need today in order to repay the loan. Now, create a budget that is capable of helping you through this process. The best way to do this is via automation and this is how I do mine: https://www.blog.pzl.sg/how-to-create-a-monthly...

While doing so, understand your personal schedule and how you can make use of free-time to gain part-time or full-time employment to boost your cashflow. Accordingly, go back to the first two steps to plan it as part of your cashflow and budget. The more detailed you can be, the better your direction will be.

Depending on your budget and risk tolerance, investment may or may not be right for you. This is because investment yields only non-guaranteed benefits while your loan repayment date is guaranteed. As a result, the willingness to take a risk depends on you.

For savings, you will need to look into various high yield bank deposits to help you boost your returns. All things considered, your cashflow and budgeting will play a critical role to help you through the process.

If you are open to understanding further on how I help my clients plan their cashflow, drop me a coffee invite: https://www.work.pzl.sg/#coffee

Here is everything about me and what I do best.

Reply

Save