Investments for the young

If you are under 21 in Singapore and are a budding investor, in all likelihood, you are scatching your head and wondering ," how do I put my money to work for me??". This problem is compounded by the lack of investment education and the many regulations that exist. If you have not already known, MAS law is that people under 21 are not allowed to invest in stocks,bonds or even in unit(mutual) funds, unless on a joint account basis.

With all these obstacles, how does one invest??

It's possible and I shall highlight certain investments that should be considered.

1) High yield savings account

As explained in the previous post, due to the rise in the SIBOR ,banks have been falling over each other to offer more and more competitive interest rates. The 0.125 rate is now passé and one can consider high yield savings account like to iSAVvy ,giving 1.38%, or the eSaver trustee account at 1.28 % .

2) Fixed deposits

Considered the cousin of saving accounts this form of deposit can give greater returns by locking your money up for a period of time. For small amounts, consider the finance companies eg Singapura or Hong leong Finance or certain obscure banks like the bank of east asia.( www.hkbea.com.sg)

3) Joint holding Mutual(unit trusts)

Although you are under 21, you may subscribe to unit trusts if it is done jointly with someone above 21. The categories are plentiful: bong funds, equity funds,balanced funds.
If you lack experience I recommend index funds which typically have lower expenses and track market indices. In Singapore look for the infinity series by the Lion Capital group(www.ocbc.com.sg)

4) Foreign currency fixed deposits

Such FDs pay higher interst rates .For example the New Zealand FD pays about 6% pa for 1 month and the euro about 0.8 % p.a. for a similar tenure.

However, one must remember that this is subject to interest rate fluctuations.

Have Fun!

Linus