When you think of “safe” or “low-risk” investments, T-bills and high-yield savings accounts probably top the list. But with T-bill rates dipping below 2% and banks cutting bonus interest rates, those returns aren’t as exciting as they once were.
The closure of the CPF Special Account (SA) for those aged 55 and above also closes the door on the once-popular CPF-SA hack, where you could earn a guaranteed 4% interest rate.
So, what’s next for Singaporeans looking for a steady income without taking big risks in the stock market?
The smarter income strategy: ETFs that pay you regularly
One option that often flies under the radar is dividend-paying Exchange Traded Funds (ETFs). If you’ve never touched an ETF before, here’s the gist: Instead of buying a single stock, an ETF is like buying a basket of investments in one trade. That basket might hold:
- Property trusts (REITs)
- Bonds
- Dividend-paying shares in companies across sectors
Because you’re buying into a collection of assets, you’re instantly diversified, which lowers the risk of being overly exposed to one sector or company. For a deeper explanation, read our beginner’s guide to investing in ETFs.
Now, not all ETFs work the same way. Accumulating ETFs reinvest the dividends and interest they earn back into the fund, increasing its value over time, but not paying you directly. Dividend-paying (or distributing) ETFs, on the other hand, pass those earnings on to you as cash payouts, typically monthly, quarterly, or semi-annually. You can spend these payouts as income or reinvest them to grow your portfolio further.
The Singapore Exchange (SGX) lists a variety of dividend-paying ETFs that can help you earn steady payouts while keeping your portfolio liquid. Examples include:
| ETF Name | Ticker | What It Holds | Indicative Yield | Frequency |
| CSOP iEdge SREIT Leaders ETF | SRT | Basket of top Singapore REITs | ~5%–7% | 2 times/year |
| Nikko AM SGD Investment Grade Bond ETF | MBH | High-quality Singapore dollar bonds | ~3%–4% | 2 times/year |
| iShares USD Asia HY Bond ETF | QL3 | Non-Investment Grade USD-denominated Bonds | ~ 7 – 8% | 4 times/year |
| SPDR Straits Times Index ETF | ES3 | Top 30 Singapore blue-chip companies | ~4% – 5% | 2 times/year |
| Lion-OSPL APAC Financial Dividend Plus ETF | YLD | Dividend-paying financial stocks in Asia Pacific | ~6% – 7% | 4 times/year |
These yields aren’t fixed; they can change depending on market conditions, but they’re considerably higher than what most banks are offering for “safe” products today.
Build your passive income portfolio in 3 easy moves
Think of ETFs as the scaffolding for your passive income plan—they give you structure, stability, and room to grow. The key is to invest regularly, a habit known as dollar-cost averaging. This simply means putting in the same amount at set intervals, no matter what the market is doing, so your costs even out over time.
When it comes to building your portfolio, a balanced mix of ETFs can give you a blend of steady income, healthy yields, and long-term growth potential. Here’s a simple, 3-step framework you can use as a starting point:
What makes SGX-listed ETFs investor-friendly?
If you’ve ever tried building your portfolio from scratch, you’ll know there are pitfalls: hidden fees, low transparency, and long lock-up periods. SGX-listed ETFs sidestep many of these issues.
Firstly, they’re liquid
Unlike fixed deposits or certain bonds, where your money is locked up for months or years, ETFs can be bought and sold just like stocks during market hours. That means you can adjust your portfolio in real time, respond to market movements, or simply cash out if you need the funds.
Transparency is key
With ETFs, you know exactly what you’re investing in. Most SGX-listed ETFs disclose their holdings daily, so you can see the precise mix of REITs, bonds, or equities in your portfolio. There’s no such thing as ‘black-box’ investing, a type of algorithmic trading that buys or sells stocks for you without you being privy to the rationale behind the action. You’ll be able to make your own decisions.
Unlike traditional unit trusts or mutual funds, you will instantly know the price that you are paying when buying or getting when selling your ETF units on the Exchange.
ETFs are cost-efficient
ETFs generally have lower expense ratios compared to unit trusts or actively managed funds that are not listed. That’s because they’re designed to track an index or follow a set investment strategy, rather than paying for a fund manager to pick stocks. On top of that, local brokers often waive custodian charges for SGX-listed ETFs, and some even offer zero minimum commission or flat fees, making it possible to start investing with relatively low capital.
Lastly, accessibility
You can choose to fund your investments not just with cash but also have the choice of using your Supplementary Retirement Scheme (SRS) or even CPF-OA funds, which means you can put your money that you don’t see to work and earn higher interest. A word of caution: It’s generally not advised to use your CPF-OA funds for investment if you are saving it to buy a house.
Some brokers make it even easier. If you’d like to invest without worrying about timing the market, consider a low-cost Regular Savings Plan (RSP), which lets you dollar-cost average (DCA) into your preferred ETFs. FSMOne’s ETF Regular Savings Plan charges no processing fees for SGX-listed ETFs and others like DBS, OCBC and Phillip Securities, offer low-cost monthly investment plans.
How to get started
First, explore what’s available. Use the free SGX ETF screener to check for the ETF you are interested in. You can filter by either dividend yield or asset class. From there, pick one or more ETFs that match your risk tolerance and income needs.
Next, set up an automated investment plan through platforms like DBS Invest-Saver, OCBC BCIP, FSMOne, or Phillip Securities. Automation removes the temptation to “time” the market and keeps your contributions consistent. If you invest via DBS Invest-Saver (ETF), you can also get to enjoy higher interest rates for your Multiplier account!
Pro tip: Look for ETFs that distribute income quarterly or semi-annually—ideal for passive income planning.
New arrival: Active bond ETF
For investors who prefer bonds but want something actively managed, Lion Global Investors is launching Singapore’s first Active Bond ETF—the Lion Global Short Duration Bond Fund (Active ETF SGD Class) – SGX Ticker: SBO.
It offers:
- Average yield to maturity above 3%
- Lower sensitivity to interest rate changes due to its shorter duration
- Minimal FX risk with 99.7% of foreign exchange exposure hedged back to SGD
- Subscription window: 8 Sep – 22 Sep 2025
This could be worth a look if you want higher SGD returns without tying your money up for long periods. Check out the page here for more details.
Unlike unit trusts, ETF holdings on SGX typically come with zero annual platform fees or wrap fees.
The ETF’s Initial Offering Period (IOP) runs from 8 to 23 Sep 2025, with trading to start on 29 Sep 2025.
Exclusive promotions
- FSMOne: Get S$10 for every S$10k invested (capped at S$200). Valid 8 Sep–31 Oct 2025. Only cash subscription is eligible during 8 Sep – 23 Sep 2025. Cash and SRS subscriptions are both eligible for promotion after 29 Sep 2025 listing. Cash reward credited 6 weeks after 31 October 2025.
- POEMS: S$10 for every S$5k invested (capped at S$500 per client). First 200 clients, valid 8–22 Sep 2025. Cash reward credited after 31 October 2025.
It is also available via the participating bank/dealers: OCBC ATM, Online and Mobile Banking, OCBC Securities, Phillip Securities, iFAST, DBS Vickers, and Maybank Securities.
Upcoming Webinar:
You can find out more about the ETF by registering for the upcoming webinar, presented by Gerald Wong, Founder of BeanSprout and Ong Xun Xiang, Head of ETFs at Lion Global Investors to receive greater insights on the ETF and how it fits into a resilient income portfolio for investors. Sign up here.
The bottom line
ETFs aren’t just for seasoned investors. They can be a practical, low-maintenance way to earn 4%–7% yields while staying diversified and keeping your money accessible. By mixing asset types, automating your investments, and paying attention to costs, you can create a portfolio that grows your income steadily over time.
That said, no investment is risk-free. Yields can change, and past performance isn’t a guarantee of future returns. Always consider your financial situation and goals before committing funds.
Ready to explore? Check out the SGX ETF screener and start building your income portfolio.
This post was written in collaboration with SGX. While we are financially compensated by them, we nonetheless strive to maintain our editorial integrity and review products with the same objective lens. We are committed to providing the best information in order for you to make personal financial decisions with confidence.
About the author
Audrey Ng is a bargain hunter who tries to sniff out the best deals possible whether it’s food, shopping or travel. She will out auntie the auntiest of aunties.
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