High-interest bank account is top investment choice among the young

Survey shows many young employees prefer putting their funds in risk-free bank products

- Tan Ooi Boon

Most young working adults in Singapore are conservative when it comes to managing and investing their money, as many of them put their funds in risk-free bank products such as high-interest accounts.

A Straits Times survey of around 1,000 young people aged 18 to 30 found that 73 per cent of young full-time employees have bank savings accounts.

This result mirrors other polls which found that many bank customers are drawn to savings accounts that can give them an extra $100 to $400 to spend every month, simply by depositing their salaries there or using the bank's credit cards.

The monthly bonus interest, which is usually applicable to only the first $100,000 in such accounts, is an attractive option for young employees because many probably have yet to save beyond that amount since they have been working for only a few years.

The survey, which was carried out by market research firm Kantar, appears to dispel the common perception that young investors are more daring in jumping into lucrative and high-risk investments.

Alternative products like cryptocurrency do not rank high in their choices, the poll shows.

Instead, their investment choices probably mirror their parents' portfolios because they also choose to put money in common products such as fixed deposits, public-listed stocks, exchange-traded funds and bonds.

It is interesting to note that many of them based their preference on the reputation of their investments and were more willing to park their money with well-established products such as gold, bond and real estate.

Close to half of them also appeared to be more risk averse and were drawn to investments that protect capital or those investments that grow steadily over a long period, even if this means getting lower returns.

Only about 12 per cent of young investors made use of technology in managing their funds, by engaging the services of robo-advisory platforms and micro-investment apps.