Those looking at retiring need to make prudent investments so they can build their nest egg.

When you are approaching retirement, capital preservation becomes an increasingly important investment objective. For some, it simply means no loss and for others it’s about avoiding loss through inflation.

While you will be paying closer attention to guarantees, maturities, liquidity and fees, diversification is still key. In Singapore, this secure portion of your portfolio will likely be made up of CPF (Central Provident Fund), and SGD denominated instruments such as Singapore Savings Bonds (SSBs), fixed deposits of various maturities, bonds with high credit ratings and money-market funds. So let’s go through each of these:


If you fancy the risk-free rates of CPF accounts and desire liquidity, here is an option.
Each year, if mandatory contributions do not add up to S$37,740, the member can voluntarily top-up his or her CPF accounts with cash. Top-ups are not tax-deductible and allocation rates are shown in the table below:

Once the Medisave account balance hits the ceiling for that year (known as the Basic Healthcare Sum), the top-ups will overflow proportionally to the Ordinary and Special Accounts. Members aged 55 years and above can make full or partial withdraws anytime from their Ordinary and Special Accounts with Special Account Savings being paid out first.

Fixed deposits

Largely offered through banks and cooperatives, these are deposited for a fixed period typically up to 36 months to earn a guaranteed interest. However, if the deposit is withdrawn before maturity, there may be no or lesser interest earned. Usually higher promotional rates require larger minimum deposits.

Singapore Savings Bonds (SSB)

When you buy a bond, you become a lender, therefore you get paid interest usually semi-annually and the principal is redeemed at maturity, which is a fixed date in future. There are many different kinds of bonds.

Offered monthly since October 2015, the Singapore Savings Bond, guaranteed by the government offers applicants a maximum tenure of 10 years with step-up yields. Redemptions can be as early as the following month which amount to your principal plus accrued interest. There is a minimum investment of S$500, as well as an application and early redemption fee of S$2. The effective return per year reflects the average 10-year Singapore Government Bonds yield two months before the issue. See the table below:

To apply for SSB, you need to obtain a Central Depository (CDP) Account and link it to your DBS/POSB,UOB or OCBC account. Go to for details.

Singapore Government Securities (SGS)

For a minimum investment of S$1,000, you can purchase these bonds ranging from one- to 30 -tenures. Brokerage fees apply and the investor can either trade it at the market price for liquidity or capital gains, or hold the bond to maturity. SGS are ‘AAA’ credit-rated, representing the lowest risk of default.

Money-market and Bond Funds

Beyond the more secure options above, one can also invest in lower-risk, short-term money market instruments and bonds with high credit ratings through unit trusts and exchange traded funds (ETF). The product highlight sheets and prospectus accompanying the funds will provide the investor information to understand the expected risks and returns.

Unit Trusts are available through financial advisors or banks, and directly through online platforms, whereas ETF is traded over a brokerage account. Do compare fees and charges for trading or switching funds as it may take a chunk out of the already low returns.

In summary, keep a low-risk portfolio simple to monitor and easy to monetise. Always exercise prudent asset allocation to reduce risk and not by timing the market.