Where to park your funds? Well, it depends
Tay Peck Gek
Singapore
PUTTING all your savings in fixed deposits may not be a wise move when interest rates are rising.
Alfred Chia, the chief executive at financial advisory firm SingCapital, said that though the average inflation for the past 10 years has been around 1.5 per cent, it would be important to monitor the future inflation rate and ensure that deposit rates are higher than that.
"Otherwise, your savings will be eroded due to inflation," he advised.
However, he said, where one should park one's funds depends on the person's risk profile, investment objective and time horizon in selecting a suitable instrument.
For risk-averse investors, fixed deposits are an option.
Other alternatives are high-quality bonds like the Singapore Savings Bonds and Temasek retail bond launched in October.
Investors with balanced and higher risk profiles should look at diversifying their investment portfolio.
READ MORE: Competition for funds driving up fixed deposit rates
