Chinese New Year is just around the corner and it is an exciting season for many reasons – it’s the best time to catch up with your family over good food, to do house visitations and of course to receive Angpaos. (Chinese red packets containing money gifts) However, many people do not know what to do with their Angpao money.

At a younger age, their parents would usually help to keep them in a bank account. After a certain age, many will end up spending a portion of their Angpao money to splurge on an item they’ve been eyeing and stick the remaining portion in the bank. But all of these are actually missed opportunities to make your Angpao money work harder for you!

If you have ever wanted to try investing but always felt that you didn’t have enough capital to start with, this is the golden opportunity for you to start making small investments and build up! For first-time investors, it may seem daunting to make your first investment and you may be wondering how and where to invest your money. Thus, we have compiled a list of 3 simple ways you can start growing your Angpao money!

Singapore Savings Bond

Singapore Savings Bond (SSBs) are safe, long-term and flexible bonds that are offered by the Singapore government. You can start by making small investments from as little as $500 and receive an interest on your investment that will grow over the duration of 10 years. SSBs are also one of the safest instruments as it is backed by the Singapore government (which has received the strongest “AAA” credit ratings from international credit rating agencies). Moreover, an attractive feature of SSBs is its flexibility where you can cash out your bond at the end of every month and still retain whatever interest you have accrued up to that point – a feature that most of the other bonds do not have! You can head on over to SSB’s website to read up more on it.

Contribute to Your CPF Account

If you are above the age of 18 and are working, you are likely to already be automatically contributing to your CPF Account.

It is wise to top-up your CPF account for a multitude of reasons. Firstly, it does not hold any risks as it is guaranteed by the Singapore government. Secondly, it offers attractive interest returns especially since it holds such low risk – up to 3.5% per annum for the Ordinary Account (OA) and up to 5% per annum for the Special Account (SA). This interest return is better than most bank savings accounts and even safer than investments in big firms. Thirdly, you can receive tax reliefs if you top up to a certain amount, which you can find more information about on the CPF website.

However, it is important to note that a downside to topping up your CPF account is that your investments will be ‘locked’ in your account till withdrawal after you reach 55 years old or through paying for housing or medical bills through MediSave.

Investing in Peer-to-Peer Investments

Peer-to-Peer investments (P2P lending) are an alternative investment option that gives investors an opportunity to earn passive income by financing business loans for small and medium-sized enterprises (SMEs). Our platform connects investors and SMEs looking for business funding, allowing individuals to earn interest on the business loans you invest in.

P2P lending is an easy-to-understand instrument where you can expect your first repayment in as fast as a month after the funds have been disbursed to the SME. Funding Societies will perform a scorecard-based risk assessment to minimise the risk involved in your investment. You can expect returns of up to 14% p.a. depending on the risk profile and is also a great way to diversify your portfolio if you are an experienced investor. You can read more on the  “Overview of P2P lending in Singapore” here!

An attractive feature of investing with Funding Societies is that you can make small investments starting from just $20! It is easy to start investing with us, and you can begin by following our Step-by-Step Guide to Investing!

We hope that this article has motivated you to start growing your Angpao money in these 3 simple ways. Chinese New Year does not have to be just a season of splurging and indulging but it can also be one where you start building your financial securities!