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Singapore Endowment Plan: Things to Know + Best Options

endowment plan
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You only live once. That’s what some young adults say when they spend more than what they save. And while it’s good to treat yourself, it’s even better to save some for the future. 

So when is the best time to start saving for the future? When you’re in your 20s, you may think that life’s milestones like buying a home, getting married, or having children, are years away. But it’s the perfect time to start putting money away since you have few responsibilities, making saving easier.

Endowment plans are a great way to start. Traditionally, an endowment plan is a combination of savings and insurance products. It is usually recommended as a means to save money for buying a home, paying for your child’s education, and other milestones. Find out more on the best endowment savings plans in Singapore.

What Is an Endowment Plan?

An endowment plan is often marketed as a savings plan. Some even use the term “forced savings” to help you meet a specific financial goal, such as retirement, buying a home, or paying for your children’s education.

But unlike a typical savings plan, you may not get the full amount you put in. This is because a part of your premium goes towards insurance coverage, and the remaining part is invested.

Endowment plans require you to pay premiums which are generally a fixed amount. You may have the option to increase or lower your premiums if you decide to change your plans.

How Does An Endowment Plan Work?

When you purchase an endowment plan, you will need to pay a premium for a specific time period. For instance, you may choose to pay S$2,000 a year to an endowment plan for 10 years. However, the length of the contribution does not immediately translate to the maturity of your plan.

Your plan could have a 10-year period and be expected to hold the policy for another 10 years before it matures. This means you’ll have to wait 20 years to get the maturity benefit.

There are also single premium plans where you will pay a lump sum amount at the start of the policy. With this plan, you can collect your principal and interest in a lump sum when the policy matures. 

Endowment plans have the following features:

1. Regular Premium Payments

This is the amount you put into your endowment plan. Some endowment plans require a one-time lump sum payment while others require staggered payments over several months or years.

The premiums are generally a fixed amount and how often you pay the premium will depend on the plan you choose. Some financial institutions may let you decide whether to pay monthly, quarterly, or annually.

Short-term endowment plans usually have single premiums.

2. Fixed Maturity Period

This is the time it takes for your money to grow. Once the maturity period is reached, you will receive a guaranteed payout plus bonuses from the plan if there are any.

Endowment plans have different maturity periods – usually between three to twenty years. That said, choose a maturity period that will suit your goals and circumstances.

For instance, if you’re in your 20s or 30s and planning for retirement, a long maturity period of 30 years will be appropriate. If you’re a newlywed and planning for your future child’s education fees, a maturity period of 15 to 20 years may be a good choice.

3. Guaranteed Returns (usually) and Bonuses 

Once the maturity period is reached, you will receive a payout. When you sign up for an endowment plan, the insurer will give you a quote of a guaranteed return amount. This is the minimum amount you’ll receive regardless of how the plan performs.

Note that the guaranteed amount may be higher or lower than the sum of the premiums you’ve paid over the years. That said, if the guaranteed return is lower than the sum of your premiums, you’ll risk losing money. 

On the other hand, there’s also a chance that you’ll receive bonuses throughout the policy term. However, these bonuses are not guaranteed. These bonuses will depend on the investment performance.

4. Insurance Coverage

Endowment plans usually come with a life insurance policy. That said, an endowment plan is a hybrid financial product that combines savings and protection. The policy coverage will vary from plan to plan. 

A portion of your premium will go towards paying for your insurance while the remainder will go towards the investment. So endowment plans with higher insurance coverage mean you will receive lower returns once the policy matures.

savings wallet

Best Endowment Plans in Singapore

Short-Term Endowment Plan

There are different types of endowment plans and can range from 3 to 30 years. If you’re looking for a plan which matures quickly, then you may want to consider short-term endowment plans. This type of plan matures between 3 to 6 years.

Short-term endowment plans are perfect for when you’re saving towards a specific goal that requires a lump sum payment, such as downpayment for a property or marriage.


  • Higher guaranteed interest rates than fixed deposits
  • Paid in a single premium or one-time lump sum payment.
  • Quick maturity between 3 to 6 years
  • Some short-term endowment plans are capital guaranteed


  • Just like any type of investment, growing your money through short-term endowment plans isn’t 100% risk-free
  • You’ll need to invest cash you won’t use in the next two or three years.
  • Early termination of the policy may lead to loss of capital.
Short-term Endowment Plan Min. Single Premium Policy Term Returns per annum Guaranteed Capital Upon Maturity
Etiqa- Tiq 3-Year Endowment Plan S$10,000 3 years 1.20%p.a. (guaranteed) Yes
DBS SavvyEndowment 6 S$5,000 1 year Up to 1.10% p.a. Yes
NTUC Income Gro Capital Ease

(fully subscribed)

S$5,000 2 years 1.21% p.a. Yes
Manulife Goal 9 S$10,000 1 year Up to 1.10% p.a. Yes

Long-Term Endowment Plans

Unlike short-term endowment plans, long-term endowment plans can take up to 30 years to mature. This is a great option if you’re looking to set aside money for retirement or for your child’s education fund. On top of that, this plan requires fixed premiums so you’ll need to be disciplined in saving money.


  • Higher returns than short-term endowment plans
  • An alternative way to grow your wealth
  • Can be considered as a forced savings
  • Some plans have flexible payout options, such as yearly cash payouts


  • Requires a long-term commitment
  • You can lose some of your capital if you choose to terminate the policy before maturity
  • Actual investment returns may be lower than projected long-term returns.
Long-term Endowment Plan Policy Term Returns per annum Capital Guaranteed Upon Maturity
AXA SavvySaver 10 to 25 years Up to 4.75% p.a.


Guaranteed cash payouts starting from the end of the 2nd policy year, till the year before the policy returns

AXA EarlySaver Plus 15 to 24 years Up to 4.75% p.a.


Guaranteed cash payouts in the last 3 policy year 

GREAT Wealth Multiplier II Insurance 5 to 15 years Multiplied returns of up to 7x or more Yes
Prudential PruActive Saver II 5 to 30 years Up to 4.75% p.a. Yes

How Much Should You Put Into a Savings Plan?

Most Singaporeans follow the 50/30/20 rule when it comes to saving money. This means 50% of your salary should go to your needs, 30% can be spent on what you want, and 20% (after CPF) must be allocated for savings.

Ideally, you must have 3 to 6 months’ worth of expenses in your emergency fund. If your savings go beyond that, you can then explore putting the extra funds into financial products such as endowment plans.

Note that you don’t have to put all 20% into your endowment plan. Remember that this type of plan requires a long-term commitment. That said, you must only put in an amount you can afford for the next 5 to 15 years.

It’s also a good idea to seek advice from a financial adviser, especially if you’re not sure how much premium you should commit.

Factors To Consider in Choosing the Best Endowment Plan

If you’re thinking of getting an endowment plan, make sure to meet with trusted insurance agents to find out more about their financial products. Here are a few things to take into account when choosing:

  • Amount You Want To Save Up: One of the things that an insurance agent may ask is how much you want to accumulate at the end of the policy term. So make sure that you have a good estimate for the amount you need for your milestone.
  • Payout Age: When will you receive the payout? Remember, the premium term isn’t always the same as the policy term. So make sure to clarify when the endowment plan will mature.

Ideally, the payout age must coincide with your milestone timeline. For instance, if you’re saving up for your 3-year old child’s education fund, then you will need the payout in 16 years. Typically, education-centric endowment plans have a premium payment term of 10 years.

  • Rate of Return: Ideally, your guaranteed returns should be higher than the total premiums paid. That said, it is important to know whether the endowment plans offer guaranteed returns. This will allow you to plan out how much payout you will receive upon maturity.

Some endowment plans offer 100% guaranteed returns on the total annual premiums paid while others only guarantee the last 3 years of the policy term. That said, the insurance agents will provide you with a chart or illustration detailing the maximum non-guaranteed returns you can receive at the end of every policy year.

Try not to choose endowment plans that offer S$0 non-guaranteed returns for more than a year or two.

  • Type of Endowment Plan: There are two types of endowment plans: participating and non-participating plans.
  • Participating Endowment Policy: With this type of policy, a portion of your premium will be invested in a participating fund to generate returns. The final payout may be higher or lower depending on the bonuses provided by the company.
  • Non-Participating Endowment Policy: This type of policy offers significantly less risk since your returns are more or less guaranteed. But since you did not invest a portion of your premiums, you will not receive any maturity benefit bonuses from the company.
  • Insurance Coverage: Endowment plans come with an insurance policy. Read the insurance policy and know what coverage you’re getting. If the coverage isn’t enough, you can use it as a supplement for your stand-alone life insurance policy.
  • Fees and Penalties: Before purchasing any endowment plan, you must also ask about the accompanying fees and penalties. Early termination of a plan usually involves high costs and a surrender value.

This is the amount you pay when you liquidate or surrender the policy before it matures. There are guaranteed and non-guaranteed amounts you will receive when you terminate the policy.

savings growth

Frequently Asked Questions

Are Endowment Plans Worth It?

If you’re looking to diversify your investment portfolio, endowment plans are a relatively low-risk investment. Plus, it is accompanied by life insurance throughout the policy term. Keep in mind that you may lose a part of your capital if your guaranteed returns are lower than the sums of the premiums paid. However, it can also mean that your losses are capped. 

What Is Endowment Plan Benefits?

The maturity benefit of an endowment plan is the total payout at the end of the policy term. It is a lump sum given once when the policy matures and it comprises the sum assured and bonuses (if any).

Which Is the Best Endowment Plan?

There’s no one-size-fits-all endowment plan. That said, the best plan is one that fits your specific needs. You may also want to choose a plan that guarantees the capital which means you’ll receive at least the total amount of premium you put in when the policy matures.

If the sum assured is less than the total premium put in, you may risk losing money.

Note: Make sure to purchase endowment plans from credible insurance agents. Traded endowment plans or second-hand policies are not regulated by the Monetary Authority of Singapore.

Should I Get An Endowment Plan?

Depending on the type of endowment plan you purchase, you’ll either pay a single premium or pay a fixed amount at regular intervals. That said, it takes a certain amount of investment and commitment. So why should you get an endowment plan?

  • You need insurance coverage: If you like the insurance that accompanies the endowment plan, then consider signing up for one. However, the insurance coverage is usually not sufficient as a standalone. It’s best used as a supplement to an insurance policy that you already have.
  • You want to save up for life milestones: The appeal of receiving a guaranteed cash payout is undeniable. That said, endowment plans are best when you want to save up for life milestones. For instance, you want to save up for your child’s university fees.
  • You want to grow your savings: Endowment plans typically have higher returns than fixed deposits. So if you simply want to set aside money every month to reach a long-term financial goal, then an endowment plan may offer higher returns.
  • You’re looking for a low-risk investment: If you choose a participating endowment plan, you can earn potential bonuses that will add up to your total payouts. In case the non-guaranteed portion performs poorly on the market, the loss would be minimal and you can still get your guaranteed sum.


Purchasing an endowment plan is one way of investing if you have a long-term financial goal. Before choosing one, take into account the minimum premium, policy term, and guaranteed payout. Remember, the best endowment plan is one that will suit your specific needs.

Key Takeaways:

  • An endowment plan is often marketed as a savings plan that will help you meet a specific financial goal, such as retirement, buying a home, or paying for your children’s education.
  • When you purchase an endowment plan, you will need to pay a premium for a specific time period.
  • There are short- and long-term endowment plans. Short-term plans range from 3 to 6 years while long-term plans can last up to 30 years and have higher returns.

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