7 Best Endowment Savings Plans In Singapore That Can Help You
March 15, 2022
Saving is a must. Relying on your income isn’t enough in this modern-day world.
However, there’s a slew of financial products that help you save money, or help you when you need cash urgently.The financial market bombards you with options and solutions from bonds to savings and deposit accounts and even investments.
Which should you pick?
An endowment saving plan is a worthwhile alternative if you want to save money for fixed milestones, such as your wedding, kids’ education, or retirement. Of course, you can also take on a wedding loan to help with the costs until your angpao money comes in. An endowment saving plan is a type of insurance plan that will augment your savings within a specific timeframe.
Why should you choose an endowment plan instead of simply opening a savings or deposit account?
Unlike saving accounts or deposits, endowment plans are safe from inflation and boast death coverage. The risk is reduced if you choose non-participating saving plans and low-to-moderate for participating endowment plans.
The high returns up to 4.75% are another reason for an endowment saving plan. By contrast, a savings account has a 0.05% interest, whereas a deposit’s interest varies from 0.1% to 1.3% – depending on your tenure.
However, not all endowment plans are created equal. Just like loans, some are specifically crafted for the short term and others for the long term. You have to calculate how much it isbefore deciding. Some help you reach more expensive goals, while others target more modest endeavours.
Keep reading the guide below to find the best option.
The Best Short-Term Endowment Saving Plan
Traditionally, endowment plans aim at medium to long-term goals, such as gathering enough funds for your children’s university education or saving for retirement. However, you may not be prepared to wait ten years or more to get money out of your account.
Of course, some parents and students have decided to apply for a personal loan to help with the education costs. It is a quicker and more efficient method of paying the fees.
In this case, you should consider the short-term endowment plans below:
1. DBS SavvyEndowment 6
DBS SavvyEndowment 6 is a single-premium plan with a one-year tenure to increase your savings. You only need $5,000 to start compared to some deposit accounts that ask you upwards of $10,000. At the same time, DBS Endowment 6 offers you a maximum of 1.10% interest for the 12-month tenure, whereas deposits in Singapore usually offer 0.6-0.8% for a year.
Besides, the DBS Endowment 6 plan boasts coverage for death benefit at 101% of the single premium.
Interest rate: Up to 1.10% p.a.
Policy term: 1 year
Withdrawal/ payouts: Based on a single premium of $10,000, you’ll receive a payout of $10,105 guaranteed and another $5 non-guaranteed.
2. Manulife Goal 7
Manulife Goal 7 is a three-year single premium endowment plan that helps you attain your financial goals thanks to attractive returns. As such, you benefit from 1.39% guaranteed returns, but the potential gains reach 2.78% after two years and 4.23% over three years.
Another advantage to this endowment saving plan is its flexibility. Thus, you can withdraw your guaranteed annual payouts or let them accumulate to get a non-guaranteed interest rate.
You have other potential gains, such as your single premium’s 1.39% maturity bonus.
You need $10,000 in cash or from your SRS account to get this deal. Like with the other two endowment saving plans in this section, the application is seamless, with no medical check-ups.
Interest Rate: 1.39% p.a.
Policy Term: 3 years
Withdrawal/payouts: Based on a premium of $50,000, you’ll receive a payout of $51,421 guaranteed and another potential bonus of $695, totalling $52,116.
3. LIC Wealth Plus 6
LIC Wealth Plus 6 is the longest short-term endowment saving plan in this section, thanks to its 5-year tenure. However, the interest is convenient with 1.20-1.25% p.a. returns. The smallest 1.20% p.a. return corresponds to single premiums of up to $45,000. The 1.25% return corresponds to higher single premiums of $150,000-$200,000.
By comparison, the highest interest from a deposit account in Singapore is 1.30% for the three-year tenure. You’ll also need $20,000 to start this endowment saving plan, whereas you can find much cheaper deposits or other endowment plans.
The advantage of the LIC Wealth Plus 6 is the 101% single premium coverage for death.
Interest Rate: 1.20% p.a. or 1.25% p.a. returns
Policy Term: 5 years
Withdrawal/payouts: Based on a premium of $30,000, you’ll receive a payout of $30,360.
The Best Mid/Long-Term Endowment Saving Plan
The options below address investors who want to save significant amounts for specific milestones on fixed periods of five to 25 years.
- The shorter policy terms are best for wedding costs or purchasing a home.
- The medium-term policies help you with funds to renew your car or to ensure high-standard education for your children.
- The long-term endowment plans help you prepare for retirement.
1. Singlife MyChoiceSaver
MyChoiceSaver is a flexible endowment saving plan that enables a smooth transition towards the next phase of your life. So, you can use this option to:
- Renovate your apartment
- Purchase a new home
- Save for your kids’ studies
- Build your nest egg
You have a 100% capital guarantee upon maturity and flexible options between 10 and 25 years or cover to 99 years old. You also get a slew of choices for premium payment terms at 5, 10, 12, 15, 18, 20 or 25 years.
Another bonus is the one-year waiver on the interest for unpaid premiums in case of unemployment or retrenching. You also can change the life assured and pass this policy to one of your family members.
Interest Rate: Up to 4.25% p.a. returns (non-guaranteed)
Policy Term: 10-25 years
Withdrawal/payouts: 100% of your capital guaranteed. Opting for a sum assured of $100,000 and a 20-year policy term gets you $145,975. However, only the initial $100,000 is guaranteed.
2. AXA EarlySaver Plus
AXA EarlySaver Plus is another worthwhile endowment plan because it’s flexible and guarantees moderate returns up to 1.57%. By contrast, the MyChoiceSaver above doesn’t guarantee any returns, so the EarlySaver Plus offers more security.
Besides, you can get cash payouts after three years of opening your policy, whereas the MyChoiceSaver has the first payment term after five years.
On the downside, AXA EarlySaver has just two premium payment terms at five and ten years. MyChoiceSaver boasts increased flexibility with a total of seven payment terms between 10 and twenty-five years.
However, the policy term also stretches from ten to 25 years. You can also get some extra payouts for medical expenses, but only up to $200 for the claim and a maximum of two claims per policy. In case of accidental death, you will get an extra 50% from your policy.
On the downside, the maximum age limit is 60.
Interest Rate: Up to 1.57% p.a. guaranteed and up to 4.57% p.a. non-guaranteed
Policy Term: 10-25 years
Withdrawal/payouts: A $50,000 policy over 15 years may get you a total of $63,548.
The Great Wealth Multiplier II is an endowment saving plan from Great Eastern, promising to multiply your savings up to seven times or more. Of course, certain conditions apply, such as entry age, term length, and exit year. Thus, this program has a 100% capital guarantee, but the benefits are non-guaranteed.
In addition, the Great Wealth Multiplier offers protection against death, disability, and terminal illness.
This plan is somewhat riskier than others, but it also offers more attractive potential returns. You also have some withdrawal flexibility because you can either withdraw cash value at 5, 10, or 15 years – or let that cash accumulate towards higher returns.
You can even purchase a Great Wealth Multiplier plan for your newborn children that they can withdraw when they’re sixty. Yearly $4,800 premiums during the first five years amount to $24,000 over five years. This capital is guaranteed for return a year 15.
In year 20, the cash value is 1.7 times the initial amount, reaching $43,183. At year 40, the premiums paid may get to 3.6 times the initial amount, giving your children $88,708. At year 60, the children could have $176,866 – or the equivalent of 7.4 times the initial amount.
Interest Rate: up to 4.25% p.a.
Policy Term: Up to the age of 120 years.
Withdrawal/payouts: Only the initial sum is 100% guaranteed. The non-guaranteed benefits could reach over 700% over 60 years.
4. PRUWealth III
PRUWealth caters to several financial goals, helping you optimise your savings. The plan is flexible enough for various milestones.
You can maximise potential returns up to 110 years, with regular premium options of 5, 10, 15, and 20 years. Even better, PRUWealth II allows you to use your SRS funds to purchase a plan.
Here’s the catch:
You can use your SRS account only for the single premium plan.
Your capital is guaranteed 100%, but only after the tenth year. If an unforeseen crisis like the COVID pandemic robs puts you in economic difficulty, you can defer premium payments for up to two years. If one of your loved ones passes, the premiums are waived by one year.
Besides, you have plenty of options to protect your family’s future in case of death, such as joint ownership, changing the life assured on the policy, or ensuring someone else together with you.
Here’s how this policy works:
Let’s say you save $5,000 per year for ten years. At year 30, you may have $119,365, which is over two times the premiums you paid.
Interest Rate: up to 4.25% p.a.
Policy Term: Up to the age of 110.
Withdrawal/payouts: Only the initial sum is 100% guaranteed. The non-guaranteed benefits could reach over 600% at year 55 for a 4.25% p.a. interest.
The Best Endowment Saving Plan Conclusion
The best endowment plan is the one that caters to your needs. So, evaluate different options regarding flexibility, returns, and premiums.
Consider a convenient personal loan if you don’t have enough cash for a single premium deposit. GS Credit is here for you, with the most affordable interest rates and flexible repayments. A $10,000 loan with us that you repay in $300/month installments can bring you twice that borrowed amount in a few years.
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