Dec 01, 2025

I recently heard that yields on traditionally low-risk investments such as Treasury Bills and Singapore Savings Bonds have fallen sharply in Singapore. Treasury Bills now yield around 1.39%, while Singapore Savings Bonds offer about 1.35% in the first year and 1.85% over a decade. This is a significant drop from the approximately 4% yields seen just a couple of years ago, indicating that investors will need to temper their expectations for returns from risk-free cash holdings going forward.

In this challenging yield environment, generating steady passive income through dividends is still feasible but requires a well-thought-out portfolio. For example, aiming for a 6% dividend yield on a portfolio of one million dollars could provide roughly $5,000 in monthly income. However, achieving such returns necessitates careful asset selection and diversification across sectors to balance the trade-off between yield and risk.

On the property side, there’s an ongoing debate about whether renting might now be more financially advantageous than owning a home in Singapore. Property prices continue to climb, while rental yields are declining, making ownership less attractive for those with shorter investment horizons. Renting offers greater flexibility and may present better financial outcomes compared to the upfront costs and risks tied to buying a property, which challenges the traditional view that owning is always the superior long-term choice.

Ultimately, the decision between renting and buying depends heavily on individual circumstances, including financial goals and investment time frames. With rising property prices and changing market dynamics, both options carry distinct pros and cons that must be carefully weighed in today’s economic climate.

All in all, these trends underscore the need to reassess investment strategies amid evolving market conditions, whether by adjusting expectations for fixed income yields or rethinking real estate decisions in Singapore’s unique environment.

Stay Well!