5 Safe Investments to Building Wealth in HK

How to combat inflation? One way is to invest in safe investments which may offer modest returns, even during difficult times. There are a number of ways to allocate your cash and grow it steadily. Check out these 5 investments that offer exactly just that:

Masthead Image

Top 5 Safe Investments to Building Wealth

1. High Yield Savings account

If you do not want to take any risks, you can consider a safe investment with relatively high returns such as setting up a high-yield savings account like Citi Plus Account to enjoy high interest rates. For example, holders of Citi Plus Account can enjoy up to 1.8% p.a. on the first HK$300,000 balance.

However, the downside is that interest rates are generally low across the board for saving accounts, and may not always keep up with inflation, meaning that your money could lose purchasing power. Also, your money is locked up for some set period of time. If you need to withdraw your money earlier, you may end up paying a penalty fee, and your interest rate will be reduced. To mitigate this risk, you should ideally have an emergency savings fund worth 3 to 6 months of your living costs to cover unexpected costs, without needing to withdraw from your investment.

2. Bonds/ Certificates of Deposits

While it's safe to save some cash for emergencies in your savings account, investing in safe investments such as bonds or certificates of deposits (CDs) issued by governments or well-known corporations when they want to raise funds for their operations or a special project is also a really safe investment. There is a really low default risk for investment-grade bonds, but investing junk bonds poses a greater risk, which we would not recommend for safe investments. Having investment-grade bonds in your portfolio can offer you a relatively high and predictable income, as it is generated by interest throughout their life such as six months, one year, or five years.

Moreover, you could potentially enjoy capital gains when buying and selling bonds/CDs. Also, your principal is protected at maturity provided that the issuer does not go default. Therefore, it’s important to select high credit quality financial institutions to keep your investment safe. You can also buy bonds through a mutual fund.

3. Saving Insurance Plan

To grow your money steadily, you can consider taking out a savings insurance plan. For example, you may purchase a 20-year or 30-year term life policy. These policies function like the other types of insurance policies and you can pay a premium monthly or yearly. For one thing, you can accumulate your wealth with the guaranteed cash value and for another, you can also boost your potential return through a non-guaranteed terminal bonus.

Similar to fixed term deposits, you will lose most of the cash value if you surrender earlier, which is not recommended. If you are not ready to commit for 20 or more years, this safe investment may not be suitable for you.

4. Gold

Gold can be a safe haven as it is protected against inflation over the long term. According to Forbes, even during the most recent bear market, the gold index dropped by a mere 2% even though equities dropped by 33%. It shows that it is a safe investment. However, similar to stocks, it can experience drastic price swings in the short run. You can also invest in Gold ETFs (as opposed to holding physical gold) to avoid the costs and inconvenience of markups, storage costs, and security risks.

5. Real Estate

If you have a large upfront investment, you can consider investing in real estates. Real estate investments can add diversification to your portfolio and be an additional income stream. It may be appreciated in the long run and you can earn rental income each month.

However, it also comes with additional costs other safe investments do not require, such as maintenance fees and management fees, etc. If you do not have enough funds to buy physical real estate, you can also consider buying REITs (real estate investment trusts). REITs usually pay investors high dividends, which makes them a common investment in retirement.

background image

Start investing

A lot of safe investments recommended above are required to purchase through brokerage firms. Therefore, you will need a brokerage account. If you don't already have one, it only takes 10-15 minutes to do so and many companies require no initial investment.

Best Online Brokerage in Hong Kong 2023

Online Promo
Dividend Collection Fee - US Stocks
0 %
Minimum trading commission - USD
Account minimum balance (Personal)
Online Promo:

・Transparent and low rates; investors could choose between fixed rate commission pricing and tiered pricing
・US$0.0035 Min. Commission Fee US Stocks
・0.015% Min. Commission Fee HK Stocks
Valid until 30 Sep 2023
MoneySmart Exclusive
MoneySmart Exclusive

Futu Securities Account

Dividend Collection Fee - US Stocks
Minimum Commission - US Stocks
Min. Funding
[Till 30 Sep 2023] Open account via MoneySmart can get extra HK$100 supermarket coupon! Get up to HK$1,500 welcome offer upon successful Futu account registration, opening and complete specified requirements. Open an account, deposit HK$10,000, and maintain the average daily assets of HK$10,000
for 30/60/90 days can get 1 out of 6 rewards:

Team up to earn an extra $200 cash coupon each.

1. 13 shares of HSBC Holdings Stock (00005.HK) OR
2. A share of Taiwan Semiconductor Manufacturing Stock (NYSE:TSM) OR
3. HK$800 Supermarket e-voucher OR
4. HK$1,200 Fund Cash Coupon(Distributed in 4 pieces, HK$400, HK$300, HK$300, HK$200) OR
5. HK Stock LV2 streaming quotation (4 months) OR
6. HK$1200 Options Offer (Option commission card USD88, US Opitons depth quotes 6 months, National quotation 6 months)

【Green Bond offer】 Enjoy 13 Fees Waivers with FUTU
Valid until 30 Sep 2023
MoneySmart Exclusive
MoneySmart Exclusive

Webull Securities Account

Dividend Collection Fee - US Stocks
0.2% of dividend amount (before tax), minimum 0.01
Minimum Commission - US Stocks
Min. Funding

New users who successfully open accounts via MoneySmart, passed account verification and make the first deposit at least HK$10,000 and no withdrawal for 60 days can get the exclusive HK$1,000 rewards:

  1. MoneySmart Exclusive:HK$1,000 Apple Gift Card / HK$1,000 PARKnSHOP Vouchers / Jollying Pebble 24 Foldable Suitcase  (Retail price:HK$1,499) (Colour randomly distributed) (distributed by MoneySmart)

^Terms and Conditions apply.

Valid until 28 Sep 2023
MoneySmart Exclusive
🔥Highest offer in town
MoneySmart Exclusive
🔥Highest offer in town

Huatai International Securities-Zhangle Global

Dividend Collection Fee - US Stocks
Minimum Commission - US Stocks
Min. Account Funding

New users will be eligible to get up to HK$2,780 rewards after opening an account and submit the reward claim form via MoneySmart and fulfilling specific requirements.

  1. (Limited Time Offer) HK$1,500 Cash (delivered by Huatai, can be directly withdrawn to bank, need to submit reward claim form)
    Apple Gift Card/ OSIM uGun X-Sports  (Retail price: HK$2,180) (Colour randomly distributed) / Jollying Pebble 30 Foldable Suitcase  (Retail price:HK$1,999) (Colour randomly distributed) (no transaction required)
  2. HK$0 commissions forever offer*on HK market, US market, A-Share Market, free platform fee & free HK stock IPO handling fee
  3. 3-months Hong Kong stock LV2 streaming quote (value at: HK$600)
  4. Enjoy 11 Fees Waivers with Huatai

*Terms and Conditions apply.

Valid until 30 Sep 2023

Borrowing to Invest

Taking a loan to invest is not always a bad idea. If the return on investment is greater than the cost of the loan, it makes sense to take out low-interest loans such as Citi Speedy Cash Loan, DBS Personal Installment Loan or GoFlexi Bank Personal Loan as you will end up generating income even when you finish paying off the debt.  For example, Certificates of deposit (CD) and bonds fit into this category. The interest rates of these loans can be as low as 1.27%.

Best Low-interest Loans in HK

Enjoy APR as low as 1.38%.
Enjoy APR as low as 1.8%
Enjoy APR as low as 1.27% (include HKD 3,000 rebate) or 1.68% (exclude rebate).