Feb 2026
As a new mother of a baby boy born in Jan 2025, I was now on the receiving end of Chinese New Year ang bao and looking for ways to grow my baby’s small stash.
This amount may not seem big at the start but can quickly accumulate over the years as a child grows. Many parents tend to overlook this small amount and as a result, ang bao cash ends up sitting idle in a savings account earning a pittance.
Before looking at ways to increase his ang bao cash, my husband and I had to first ensure we have emergency funds of at least 3 to 6 months of our newly budgeted expenses.
Following which, we did up a comprehensive financial plan for my child which comprises of both insurance and investment components.
Insurance protection products purchased for him include an Integrated Shield Plan for hospitalisation, a personal accident plan and a multipay critical illness plan to ensure adequate coverage against unforeseeable major illnesses.
With his basic protection needs taken care of, we could then fully focus on his medium-term financial goals which include a tertiary education.
These are the three common strategies which we can employ as parents to effectively grow our children’s ang bao monies:
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- Endowment Savings
Using our child’s lump sum ang bao money, we can pay a regular premium, and the plan pays out a guaranteed or non-guaranteed lump sum after a specific period (e.g. when our child turns 18 or 21 and are of university age)
Why parents choose it:
· Capital Protection: The principal amount is often protected
· Disciplined Savings: It effectively locks the money away for the long term
· Life Insurance Cover: The plan includes a small insurance component such as premium waiver upon Death or Total Permanent Disability (TPD) of the parent
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- Unit Trusts & Exchange-Traded Funds (ETFs)
Instead of picking single stocks, we can invest in a diversified basket. Common choices include:
· Unit Trusts/ Managed Discretionary Portfolios: Managed by fund houses, often focused on globally diversified, US, or Asian markets.
· ETFs: Passive, low-cost funds
· Major local banks and investment brokerages offer Custodial Accounts where the parent manages the investments on behalf of their minor child until they turn 21.
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- Direct Stocks and Blue-Chip Share
Using a Custodial Account, we can buy shares of specific companies for our child, starting with popular blue-chip stocks from the STI, such as DBS or Singapore Telecommunications (Singtel), which are known for their stability and dividends.
Why parents choose it:
· Educational: It is a tangible way to teach our children about owning a business.
· Dividend Income: Dividends can be reinvested for compound growth.
In consideration of the various savings and investment options available in the market, parents should consider several factors such as their individual risk appetite, time horizon for investment and personal investment knowledge.
Disclaimer: The information in this publication or any dissemination of information in any form is not intended to be and does not constitute financial advice, insurance advice or any other advice or recommendation of any sort offered or endorsed by finexis advisory Pte Ltd (“finexis”).
The information is not to be relied on as investment, legal, tax or other advice as it does not take into account the investment objectives, financial situation or particular needs of any specific investor.
Investment products are subject to investment risks including the possible loss of the principal amount invested. References may be made to past performance of investment products and it may not be indicative of future results. Buying insurance policy or investment product may require long-term commitment. An early termination of the policy or product usually involves high costs and the surrender value payable may be less than the total amount paid. Please refer to the relevant documents such as product summary or policy contract for the exact benefits and features.
If you need clarification, please do not hesitate to ask your financial consultant. You should not make any decision based on the information without undertaking independent due diligence and consultation with your financial consultant.
The information provided and / or this advertisement has not been reviewed by the Monetary Authority of Singapore.
