Investment Methods – Fixed Deposits vs Stocks/Forex/Crypto

What is the simplest investment method? It is, of course, to open a fixed deposit (FD) account with your local bank. You can deposit the angpows you received during the CNY/Raya/Diwali seasons. You can also save the annual bonus from your paycheck. Unfortunately, even in the best of times, FD accounts will only offer you a very marginal rate of return. Your growth will thus be substantially hindered.

Why? The YoY (year over year) Growth of MAS Core Inflation was recorded as 5.5% in January 2023. What does your bank offer in its FD rates? With some good ‘lucks’ during the bank promo, you may get over 3.5% interest rate with at least a S$10,000 deposit or up to 4% with a minimum of S$250,000 deposit. And yet you agree to let the banks lock your money for 6 to 12 months, only to return them in lesser value.

It’s even worse if you realize how the banks make more money with your money. For instance, the banks would lend your locked money as hirepurchase or mortgage loan with higher interest rates. Visualize, that could be your neighbour using the loan (your money) to buy the property, or your manager at work who uses the loan (your money) to buy a car. And you? Still renting a room/house? Still waking up early to take public transports?

Many complain about the inequality between the rich and poor, but they are the same people who happily deposit their hard-earned money into the banks, naively hoping the interest rate could fight inflation, or “the banks will help me make most of my money”. Haha! The banks are not charities. Wake up!

And if you are saying, “The banks are safe to keep our monies mah”, please look at what happened to Silicon Valley Bank (SVB), Credit Suisse, and First Republic Bank. (FPB). SVB is a top 20 American commercial bank with over 40-year reputation and close to US$209 billion in assets at the end of 2022. However, it collapsed in just 48-hour after it encountered a classic run on the bank in March 2023, and became the largest failure of a US bank since Washington Mutual in 2008. On the other hand, Credit Suisse, a 167-year-old bank and the second-largest lender in Switzerland, faced bankruptcy due to a series of events which included the ‘No’ from its top backer, Saudi National Bank towards its plan to borrow up to $54 billion to shore up liquidity. Similarly, FPB was seized by the federal regulators after its deposits had plunged by more than US$100 billion in the last week of April 2023. It had then won the title of “second largest failure of US bank” after SVB.

To add, think of the increasing fraud cases when bank customers unknowingly lost their monies to scammers while the banks may take a looong time to investigate the dispute of the fraud transactions.

Simple math, the banks are not as ‘safe’ as they used to be, plus, the FD interest rates cannot fight inflation, equals to You Have To Find Another Way Out! So, utilize your hard-earned money by investing in other methods with higher returns, and of course, with the lowest risk possible.

The solution is that you can open an investment account now, only with a little of online paperwork and you can start investing for as little as S$100. Thereafter, you can call yourself an investor or a shareholder and begin dabbling in the Stock/Forex/Crypto market with one or more feet.

Click here to start your investment journey and be part of the InvestNow family.

Click on the next page to explore how Stock/Forex/Crypto tradings could yield a higher return than Fixed-Deposits.

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