Where should I place my money since I’m serving the nation soon? TIA. - Seedly

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Asked by Anonymous

Asked on 22 Jul 2019

Where should I place my money since I’m serving the nation soon? TIA.

I don’t see myself spending much while serving the nation, and for emergency funds, i can probably ask my parents for support. As for experience, i have none but will do my part and research as well. I’m open to all suggestions!

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Victor Lye
Victor Lye
Level 5. Genius
Updated on 28 Aug 2019

First, thank you for serving our nation.

Second, it will be important to understand your stage in life. Presumably, you may be turning 19 after your A-levels or 20 after your poly studies. Either way, you are young and have a long investment runway ahead of you.

Third, where can you place your money while you serve the nation for the next two years?

www.squirrelsave.com.sg

Assuming you can get emergency funding if needed from your parents, then you must decide the risk you want to take in placing the money.

The safest (lowest risk) with no return is to literally keep your money in the safe. That’s not the best way frankly when there are slightly riskier ways to grow your money with decent returns.

One possibility is to place into a bank savings account in Singapore, preferably in a fixed deposit which offers a higher return than the basic savings account.

However, I would recommend investing in a well-diversified global portfolio, especially when you have two years of runway to grow your money. After all, it will be good to have good returns after you complete your national service to help you meet expected expenses when you further your studies or take a well-deserved holiday.

Investing globally is easy with Robo-advisers. Pick one which is fully automated where you don’t have to make decisions except how much to invest. In selecting the Robo, check if the risk management is done by machine learning AI or if it is managed ultimately by a human manager. Diversification requires massive data analytics, which is not humanly possible. Yet it is easily done with the computing power available today.

Before you start, you need to know or select your own risk profile. It is not easy as most people do not do what they say. Further, conventional risk profiling poses technical questions which some people may not fully understand. Instead, look for risk profiling tools which reflect your personality and risk-reward behaviour. Using such a tool that can analyse your risk-reward attitude is a critical step to start your investing journey.

www.squirrelsave.com.sg

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Sarah Chan
Sarah Chan, Business Administration at NUS
Level 6. Master
Updated on 05 Aug 2019

Hi anon! I’ve most certainly not served the nation but here at Seedly, we’re all about making smarter financial decisions. So let’s break things down together and see how we can grow your finances during your NS years.

TL;DR: These 3 tools should be able to help you grow your finances over your 2 years in NS:

  • POSB Save As You Serve (SAYS): 2% p.a. interest on your monthly savings
  • CIMB FastSaver Account: 1% p.a. interest for balances up to S$50,000
  • Investing as a beginner: STI-ETF, SSB, Robo-Advisors

For starters, it’s great that you don’t picture yourself spending a lot in your NS days! Do keep up with the good work and discipline over the next 2 years. With whatever savings you have at the moment together with your monthly NS pay, here are 3 different ways you can grow your money:

#1 POSB Save As You Serve (SAYS):

From as little as S$50 per month, you get to enjoy up to 0.25% p.a. base interest + 2% p.a. additional interest. Also, if you intend to get a debit card to use alongside the account, there’s the SAFRA DBS Debit Card and HomeTeamNS-PAssion POSB Debit Card with pretty reasonable cash rebate deals and additional privileges

#2 CIMB FastSaver:

A popular savings account among young adults, the CIMB FastSaver is a really attractive savings account due to its 1% p.a. interest rate.

  • From as little as S$1,000 per month, you get to enjoy 1% p.a. interests for balances up to S$50,000.
  • Beyond S$50,000 balance, you get to enjoy 1.50% p.a. interests up to S$75,000 balance.
  • Beyond S$75,000 balance, you’ll only get to enjoy 0.6% p.a. interests.

I’m pretty sure you have AND can maintain at least S$1,000 in the account given how disciplined you are. Not sure about you but 1% p.a. interest rate sounds pretty good to me especially when there aren’t multiple conditions to fulfil! There’s no need to hit a minimum spend every month, do salary crediting or meet any online bank transaction quota.

By simply depositing a portion of your monthly NS salary into this account, you get that 1% p.a. You can continue using the CIMB FastSaver Account beyond NS too, the account is pretty popular among undergrads and fresh grads saving up for their financial goals!

#3 Investing for beginners:

Given that you’re ready to do your own research, I take it that you want to start investing but you aren’t too sure where to begin or what to do. I recently answered a similar question for an investing newbie here, do take a read! To sum things up, I would recommend you invest in STI-ETF, SSB and Robo-Advisors since you’re a beginner. Given that you’ll be busy serving the nation, these investment products are great for you too since they’re passive investments over a long term horizon. To learn more about the 3 investment products, here are some useful Seedly articles to help you along the way:

STI-ETF:

SSB:

Robo-Advisors:

More importantly, as a beginner of investing who’s also busy serving the nation, I’d recommend you do Dollar-Cost Averaging (DCA) through a Regular Shares Savings (RSS) Plan. The idea behind doing DCA is essentially setting aside a sum every month (as low as $100!) to invest. You can do DCA for all 3 investment products by setting aside a sum of your monthly NS pay to invest in them, e.g. $100 in each investment product.

I hope this summary on where you can park your savings & NS pay in order to grow them over the next 2 years was helpful! Wishing you all the best serving the nation and achieving your financial goals! :-)

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LN
Lucas Neo
Level 2. Rookie
Answered on 09 Aug 2019

Highly recommend using POSB:SAYS as you utilise your free time to educate yourself on investment. Remember to setup your SAYS account early, so that you’re able to start crediting your NS Allowance as soon as you first receive it.

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Leonard Tan
Leonard Tan
Level 1. Freshie
Updated on 06 Aug 2019

I will ORD soon in another few more days and am quite embarassed to say that I just started saving seriously only recently by setting aside $100 a momth. If only I had been even more serious at the start, I would have already had a decent pool of svaings. sighs

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Kenneth Lou
Kenneth Lou

06 Aug 2019

Haha it's fine man! Don't be so hard on yourself haha. I was like you last time also. Because I had a girlfriend (through Army as well, and she was in Uni) I almost had no savings left (oops) because every weekend we would go out. haha :D But I find that what's important is starting your savings and investment journey in University, that is most critical in my opinion!
Gabriel Tham
Gabriel Tham, Tag Team Member at Kenichi Tag Team
Level 8. Wizard
Answered on 22 Jul 2019

POSB Save as you serve is a pretty good account while serving NS. https://www.posb.com.sg/personal/deposits/savings-accounts/says Check it out and see if it suits you.

If not, there is always CIMB fastsaver, 1% interest per year if you have 1k and above inside.

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