We are forced to be investors whether we like it or not: Low Interest Rate Singapore 25 Years

This one chart explains it all. It was just a “few years” back when my parents told me that it is important to save money in the bank. Saving money in the bank does have many tangible benefits. Firstly, it creates a pool of emergency funds for a peace of mind. Secondly, it gives you a lump of money to prepare for any opportunities. Thirdly, if you don’t do anything, the banks will give you up to 7% interest per annum (Dec 1980). That sounds good to me!

Fast forward to 2021, the bank is giving on average around 0.05% and it seems to be getting lower. The low interest rate environment has changed many areas of finance. Firstly, it has already affected the insurance companies’ participating plans. Secondly and more importantly, it has lead to the erosion of money.