What can we do in this low interest rate environment in Singapore?

Interest rates are low hovering around 1.5% or less for shorter tenures as can be seen here in my previous post on Singapore banks and fixed deposits interest rates for the last 2 years.

There is nothing much we can do...unless
In reality, for most savers, there is very little you can do if you are not willing to accept more risk for the possibility of greater returns. If you do not have the time, inclination and more importantly the interest to learn about other investments such as stocks and shares, property, unit trusts (mutual funds) etc, then it will be difficult to get a better return than what banks and finance companies can give you for a relatively risk free investment (especially your first $20,000 deposit that is covered under the deposit insurance scheme in Singapore).

If you are happy in your job, do not want to worry or take on the REAL POSSIBILITY of your investments going -20% (or +20%) or even -50% (or +50%) which CAN HAPPEN for stocks and shares, then you should just look at strategies to lock in higher interest rates and learn about treasury bills which can move higher than fixed deposits in terms of interest returns.

Other riskier strategies include foreign currency fixed deposits where you place a fixed deposit at much higher interest rates (e.g. 7-8% per annum for New Zealand Dollar) for 1-12 months (depending on your deposit amount and individual banks packages). The interest rate is high but so is the risk. The risk comes from the movements of the foreign currency against the Singapore dollar. To some extent, this risk can possibly be higher than stocks and shares because the variability of currency movements can be higher in a short space of time of weeks or months.

Remember the number 1 rule of investment (NOT TO LOSE MONEY)
For those of you who are just starting out in investments, you have time on your side and can consider reading and learning about investments beyond fixed deposits and treasury bills whilst leaving your money there FOR THE TIME BEING. But do equip yourself with the knowledge, skills and competence to learn about what is available to you as someone who wants to make your money work harder for you.

If you are totally new to investments, I'll recommend you reading "The Richest Man in Babylon" for fundamental principles on personal finance and slowly work your way up with books on equity investments "One Up on Wall Street" (Peter Lynch) and "The Intelligent Investor" (Benjamin Graham) - though this book is more heavy going.

Get yourself an education using the public libraries so that you can make your money work harder for you. :-)