A savings plan is an all-in-one financial product that has a guaranteed and non-guaranteed return on your initial savings. These plans are conservative by nature and have an accompanying life insurance policy covering total and permanent disability. As a result, many Singaporeans swear by the benefits they receive with their total premiums paid.
Conservative investments can give you protection-oriented returns. Savings accounts give you an excellent annual percentage yield (APY) that can possibly save your cash from inflations. Alternatively, Certificates of Deposit (CD) and Fixed Deposits lock your money for a given period and give you back guaranteed returns for your cash.
Savings plans outperform each of these conservative investment vehicles without exposing your cash to added risks. Investors and savers who are interested in building their nest egg with the best protection possible should continue reading.
5 Great 5-Year Savings Plans in Singapore Today
Here are five of the best 5-year savings plans you’ll want to use in Singapore today. Keep this table handy for consultation before you enroll in any one of them.
| Endowment plan | Premium term | Policy term | Returns (per annum) | Capital guaranteed (upon maturity)? |
| LICS Grow Easy | n/a | 3-6 Years | S$20,000 to S$45,000: 1.03% p.a. (guaranteed) S$50,000 to S$200,000: 1.08% p.a. (guaranteed) S$20,000 to S$45,000: 1.32% p.a. (guaranteed) S$50,000 to S$200,000: 1.37% p.a. (guaranteed) | Yes |
| Aviva MySavingsPlan | 10 to 25 years | 10 to 25 years | -Up to 4.75% p.a.non-guaranteed returns | Yes |
| AXA EarlySaver Plus | 5 or 10 years | 10 to 25 years | – Up to 4.75% p.a. non-guaranteed returns – Guaranteed return of up to 1.57% p.a. – Guaranteed cash payouts in the last 3 policy years. | No |
| Great Eastern Flexi Cashback | 5 to 25 years | Up to 25 years | – Up to 4.75% p.a. non-guaranteed returns – Accumulation interest rate at 3% p.a (non-guaranteed) – High guaranteed yearly cash payouts – Start receiving cash payouts yearly from the end of the 2nd policy year | Yes |
| Tokio Marine Nest Egg (GIO Cashback) | 5, 10, 15 or 20 years | 10, 15, 20 or 25 years | – Up to 3.8% p.a. non-guaranteed returns – Enjoy guaranteed yearly payouts from the 2nd policy anniversary for either 8 or 10 years – Flexibility to withdraw yearly cash benefit or reinvest to earn interest | Yes |
More Details About These Savings Plans
Here are a few more details you’ll want to know about each of these savings plans.
1. LICS Grow Easy
LICS allows savers to commit their cash for 3-6 years with a guaranteed higher return for bigger savers.
- Minimum Payment: A single-premium LICS Grow Easy deposit is S $20,000. Savers that have S $50,000 savings up to a maximum of S $200,000 enjoy higher interest rates.
- Policy Term: The policy gives you 3 and 6-year savings options. Savers who face a totally disabling medical problem or have passed away and paid for a 3-year single premium benefit will receive all their payments plus 1.03-1.08% of its interest per year from the policy start to the saver’s death date. On the other hand, 6-year savers will receive all their payments with a 1.32-1.37% interest.
- Maturity Benefit: LICS Grow Easy calculates its maturity benefits according to premium quantum. Therefore, a 3-year single premium with S $20,000-S $45,000 deposited in the plan will receive a guaranteed 1.03% annual interest rate. This basic interest rate will increase to 1.08% yearly interest for premiums paid within S $50,000-S $200,000. Savers under the 6-year term can enjoy 1.32-1.37% yearly interest for the same premium quantum.
2. AXA EarlySaver Plus
AXA’s Early Saver Plus provides you with high guaranteed returns that can reach up to 1.57% yearly during its last three policy term years. Plus, the account covers outpatient medical costs up to S $200 each time you claim two times.
AXA permits savers to use the endowment plan without any medical examinations. Keep in mind that this can mean lower face value for your insurance. Luckily, AXA briefs you in full detail about the lower face value before your sign up.
Your AXA Early Saver Plus gives you death, total permanent disability, and terminal illness coverage. You and your beneficiaries will receive 101% of your premium payment total guaranteed plus maturity benefits. Plus, accidental deaths will provide your beneficiaries 151% of your insurance savings.
- Minimum Payment: S $10,000
- Policy Term: 5-10 years. No extensions
- Maturity Benefit: Up to 1.75% guaranteed returns. Up to 4.75% non-guaranteed returns. Total disability/Death: 101% of your premium payment total plus maturity benefits. Accidental death: 151% of your total premium payment.
3. Great Eastern Flexi Cashback
Great Eastern Flexi Cashback has a high yearly cash benefit. You can get 6% of the sum assured as cash payouts every year. Plus, you can withdraw your insurance savings by the second policy year.
Great Eastern allows you to deposit your withdrawn amount or monthly income at any time. You’ll receive your total paid premiums by the Flexi Cashback’s maturity date,
“Flexi” is this product’s main benefit because you can receive great returns from a five-year endowment plan stint. You can extend it up to 25 years for higher guaranteed returns.
Flexi Cashback protects policyholders against permanent disability, terminal illness, and death. Policyholders who are permanently disabled or pass away will receive 105% of their yearly premiums minus their total survival benefits paid. However, some permanent disability coverage is valid only until the policyholder reaches 65 years of age.
- Minimum Payment: S $10,000
- Policy Term: 5-25 years
- Maturity Benefit: 4.75% yearly non-guaranteed. Potential accumulation interest at 3%. Permanent disability, terminal illness, and death coverage that provides you with 105% of your yearly premiums minus survival benefits you’ve paid.
4. Tokio Marine Nest Egg (with GIO Cashback)
Tokio Marine Nest Egg is fully flexible because you can go for its short 5-year premium term. You can opt for 10, 15, or 20 with 3.8% non-guaranteed returns for each tier. You can receive guaranteed annual cash benefits by the second year and withdraw them without penalties.
Your capital is also guaranteed upon policy maturity, ensuring that every dollar you contribute as premiums will be returned. You will also be able to purchase this plan without requiring any medical underwriting.
Tokio Marine returns all your premiums paid by the policy’s maturity along with any profits. Plus, you’ll have death coverage that pays out 105% of your total annual premiums plus accumulated yearly cash benefits to your beneficiaries.
- Minimum Payment: S $10,000
- Policy Term: 5, 10, 15, or 20 years.
- Maturity Benefit: 3.8% non-guaranteed returns per year. You can withdraw your annual cash benefits. Your death coverage pays out 105% of your total yearly premiums and all your accumulated yearly cash benefits to your beneficiaries.
5. Aviva My Savings Plan
Aviva’s savings account is excellent for savers that want to receive their full capital after maturity in a lump sum. Plus, the account provides all other non-guaranteed profits and bonuses the policy has earned throughout the plan’s duration.
The company does not require any medical check-ups to approve your application. However, savers have no early withdrawal options and have limited riders that exclude critical illness.
- Minimum Payment: S $10,000
- Policy Term: 10 – 25 years
- Maturity Benefit: Full capital return in a lump sum plus non-guaranteed bonuses.
Recap on the Following Terms
Here are a few terms that might be confusing for first-timers planning to use a savings plan for the future.
- Premium: A sum added to the ordinary cost. These are added risks for insurance savings plans. For example, insurance premiums cost higher for older savers than younger ones because insurers have to deal with the former’s higher risk profile.
- Policy term: The period between the policy’s commencement and maturity. Endowment plans provide complete guaranteed and non-guaranteed amounts by the policy term’s end. Most endowment plans offer multiple policy terms that are shorter and longer. Lengthy policy terms often return the biggest benefits.
- Capital guaranteed upon maturity: Many banks ensure that you’ll get the full insurance policy price you’ve paid for the endowment plan along with other profits and bonuses from the latter. For example, a saver who paid S $10,000 for a 25-year policy term that guarantees capital upon maturity plus guaranteed and non-guaranteed bonuses will receive S $10,000 and more after 25 years.
- Maturity benefit: These benefits are either the bank’s guaranteed or non-guaranteed bonuses. Guaranteed bonuses are often much lower than non-guaranteed bonuses. An endowment plan’s maturity benefit can’t offset investment plan benefits. However, insurance savings plans have a lower risk value than the latter.
- Participating or non-participating: A participating endowment plan provides you with guaranteed capital and both guaranteed and non-guaranteed bonuses by the policy’s maturity. On the other hand, non-participating policies provide only guaranteed capital and bonuses. Most banks indicate the participating or non-participating endowment plan status that they possess.
- Insurance coverage: This refers to the situations that will trigger your insurance policy. For example, a personal accident coverage will have insurers provide you with guaranteed and non-guaranteed amounts after your claim gets approval.
- Policy Owners Protection Scheme: The Policy Owners Protection Fund (PPF) is a Monetary Authority of Singapore (MAS)’ arm that protects Singaporeans against possible insurance company fraud or failure. The PPF has a Policy Owners Protection Scheme that provides policyholders with a guaranteed amount in the event their insurer becomes bankrupt. However, the PPF Scheme can only offset a percentage of your total life assured benefits and insurance savings plan capital.
- Total Premiums Paid: The total premiums you’ve already paid for the policy. For example, your policy needs S $50,000 to provide you with the complete death benefit, and basic sum assured. Your insurer informs you that you have S $25,000 total premiums paid for your policy.
- Monetary Authority of Singapore (MAS): Singapore’s financial regulator that oversees all banking, insurance, and investment activities. MAS works closely with various banks across Singapore.
- Tranches: These are portions of a total sum. For example, insurers can pay you in either a lump sum total or in tranches.
The Big Differences Between Savings Accounts and Endowments/Savings Plans
The savings accounts vs. savings plans confusion are partly due to misleading bank advertising. Thus, the list we’ve made below will help you know about their major differences.
1. Liquidity
Savings accounts are greatly liquid because you can deposit and withdraw your money at any time. Savers who leave a huge deposit before the year ends will receive their savings account’s APY as actual benefits payable within the account’s term.
On the other hand, savings plans are not liquid. These banks will lock your money for a specific period like CDs. However, the period length of more than a single year plus added benefits, such as total and permanent disability life insurance, differentiates savings plans from CDs.
Savings plans make up for the non-withdrawable period with its guaranteed and non-guaranteed maturity benefit. The bank will provide your maturity benefit and total capital. Then they will extend your life insurance until you pass away.
2. Age-Dependent
All saving accounts provide the same APY to young and aged depositors. Endowment plans that include total and permanent disability insurance will require higher premiums from aged depositors because of their risk factors. Thus, younger generations greatly benefit from endowment plans rather than older generations.
However, some savings plans have zero permanent disability insurance policies included. Consequently, these have lower interest and guaranteed payouts too.
3. Risk Assessment
Both savings accounts and savings plans have zero risks. However, both have small to negligible profits that can keep your savings afloat during inflationary periods.
Savings accounts have monthly fees that users who meet minimal deposits can waive off. Savings plans have minimum deposit requirements and lock-in periods.
The two accounts’ APYs depend on the bank and the Monetary Authority of Singapore’s (MAS) floor interest rates. Thus, it links only to economic activity and grows in proportion.
4. Insurance in Any Form
Almost all savings plans in Singapore have permanent disability insurance or anything equivalent. Thus, it virtually disqualifies aging individuals with retirement deposits because of the insurance policy’s higher premiums for septuagenarians.
The bank or financial institution will pay back your total premiums, and your insurance payments as part of the policy’s sum assured amount. These amounts are separate from the maturity benefit cash value you’ll receive upon the policy term’s end.
Are Endowment Life Insurance Policies Good Investments?
Savers looking for higher returns on their savings without exposing themselves to higher risk will find endowment plans an excellent choice. Here are some excellent features you’ll enjoy in using them.
1. Combined Savings and Investment
A savings account gives you a small ceiling APY that can help your savings recover from inflation. A savings plan locks withdrawal of any form for a fixed period and gives you higher maturity benefits afterward. As a result, savings plans are a combined savings and investment product.
Plus, you have life insurance that requires no medical examination unless you’re aged. We’ll discuss more of this in a later section.
2. Zero Risk
Savings plans are in the same area as CDs, fixed deposits, and savings accounts because they’re conservative investment products. However, investing in low-interest products will give you lower returns in the end. Thus, aggressive and risk-taking investors consider endowment plans as their “safety net” as part of their diversified portfolio.
Unfortunately, earnings on savings plans in Singapore take tax hits. Savings plans that made poor maturity benefit returns will give you back the total premiums you’ve paid with minimal profit throughout its course. Still, savings plans are notable investments because they can prop up your cash’s value against inflation upon maturity.
3. No Medical Exams
All life insurance policies require customers to take a medical exam. The examination results will determine the saver’s face value that an insurance company will pay should the former face dangers that qualify for coverage.
You won’t need to take this medical exam with endowment plans. Anyone who isn’t retired automatically qualifies for its included insurance policy. However, you must remember that you’ll have a lower face value without any medical exams. As a result, the financial institution will use part of the total premiums you paid to pay for your bills and needs after any incident.
4. Encourages Saving Money
Financial objectives align all your activities towards a long-term goal. All endowment plans have a long-term financial objective. For example, a college savings plan encourages savers to pay all total premiums and receive their sum assured upon maturity by the policy term’s end. As a result, a saver continues to pay all their premiums with the financial goal of paying off college using the lump sum they’re likely to collect.
Any Singaporean can use savings accounts for this purpose. However, endowment plans have a guaranteed cash benefit that’s remarkably higher than a regular bank account. It will require you to pay your total premiums and receive your lump sum by the premium payment term.
Pros and Cons of Short and Long-Term Savings Plans
Singapore banks offer you both short and long-term savings plans. Let’s learn more about both of them before we learn about the best 5-year savings plans in Singapore.
Short Term Plans
These plans often have 1-10-year premium payment term requirements for savers. Short-term plans function like CDs but have longer payment terms. Therefore, savers must leave their money after paying their total premiums for a fixed period. Afterward, they can claim their sum assured in a lump-sum payment.
Short-term endowment plans are subject to massive economic fluctuations and market movements. Thus, they’re riskier and might have lower guaranteed yearly cash benefits than long-term endowment plans.
Short-term plans allow cancellations but with reduced surrender value that policyholders can receive.
Pros
- No Long-Term Commitment
- Flexibility
- Liquidity
Cons
- Smaller Returns
- Possibly Higher Fees
- Heavily Subjects Itself to Market Conditions
Long-Term Plans
These financial products have a lengthy policy term that can span 20-30 years or beyond. Long-term plans have higher cash value upon maturity because they have much more time exposed in the market. However, they will leave savers with less liquidity and significantly reduced surrender value upon early withdrawal or cancellation.
Anyone saving for retirement will find long-term plans one of the most viable options that can grow their money with a guaranteed surrender value and sum assured.
Pros
- Extremely Rewarding
- Lower Fees
- A Nearly-Guaranteed Amount
Cons
- Needs Patience
- Rigidness and Lack of Liquidity
- Subject to Economic Performance
Other Short and Long-Term Savings Plans
Here are other useful short and long-term savings plans that didn’t make the cut. However, we believe they’re worth mentioning because of their terms and benefits.
Short-Term Savings Plans
| Plan | Great Eastern GREAT SP Series 3 | TIQ 3-Year Endowment Plan | Income Gro Capital Ease |
| Availability | Fully Subscribed | Fully Subscribed | Available |
| Capital Guaranteed | 100% @ maturity | 100% @ maturity | 100% @ maturity |
| Policy Term | 3 years | 3 years | 2 years |
| Premium Term | Single Premium | Single Premium | Single Premium |
| Life Coverage | Death, TPD before age 65 | Death | Death, TPD before age 70 |
| Guaranteed Return | 1.55% | 1.68% p.a. | 1.21% p.a. |
| Non-Guaranteed Bonuses | No | No | No |
| Credit Rating | AA- | A | AA- |
1. Great Eastern GREAT SP Series 3
Great SP 3 has only a few differences from SP 4. It’s a single-premium, short-term 3-year policy that provides you with excellent death and total permanent disability benefits before you’re 65 years old. Plus, it will provide you with guaranteed capital returns plus 1.55% yearly bonuses upon maturity.
2. TIQ 3-Year Endowment Plan
TIQ’s 3-year plan has many similarities with Great SP 3, such as its 3-year policy term and guaranteed capital upon maturity. However, TIQ’s 3-year endowment plan provides you with higher guaranteed returns at 1.68% yearly bonuses but with no total permanent disability benefit.
3. Income Gro Capital Ease
This short-term endowment plan has the same benefits as Great SP3 with a few variations, such as a slightly extended total permanent disability and death benefit and a lower 1.21% yearly guaranteed bonus.
Long-Term Savings Plans
These long-term savings plans can extend beyond 10 years and beyond. You can earn much more guaranteed and non-guaranteed bonuses the longer your money stays in these endowment plans.
| Plan | Policypal eEASY save V | Policypal ELASTIQ | TIQ GIGANTIQ |
| Availability | Fully Subscribed | Fully Subscribed | Fully Subscribed |
| Policy Term | 6+ years (until age 100) | Until age 100 | Yearly (Until Age 100) |
| Premium Amount | S$10,000-S$200,000 | S$5,000-S$50,000 | S$50-S$200,000 |
| Premium Payment Term | Single; 2 years | Single | Single |
| Life Coverage | Death | Death | Death |
| Death Benefit | 101% of account value | 106.8% of account value | 105% of account value |
| Credit Rating | A | A | A |
1. Policypal eEASY save V
Policypal’s Save V gives you the option to extend your term from a minimum of six years up to 100 years of your age. You can receive a complete death coverage for the policy’s duration and a guaranteed 101% of your account value until withdrawal.
2. Policypal ELASTIQ
This other Policypal endowment plan provides you with a policy term of 100 years of whole life coverage. Plus, ELASTIQ guarantees you’ll get 106.8% of your endowment plan’s total value upon maturity or death.
3. TIQ GIGANTIQ
GIGANTIQ provides you with a yearly policy term that you can extend throughout your entire life. It has a high premium of S $200,000 to maximize your returns of 105% upon death.
The Best Alternatives to Savings Plans
Here are a few other products that are excellent alternatives to savings plans.
Savings Accounts
These are your typical low-return savings accounts that can protect you from inflation. However, Singapore’s banks provide high-quality financial technologies to their savers. Here are some of the best ones you’ll find in the country.
- BOC SmartSaver
- DBS Multiplier Account
- UOB One Account
- Standard Chartered Bonus$aver
- OCBC 360 Account
Fixed Deposits
CDs and Fixed Deposits allow banks to keep your cash for a minimum period of one year. You might find longer-term, high-return fixed deposits aside from our examples below.
| Bank | Deposit | Deposit Term | Interest |
| CIMB | $10,000 | 24 months | 0.75% p.a. |
| Hong Leong Finance | $20,000 | 36 months | 0.65% p.a. |
| DBS | $1,000 | 8 months | 0.6% p.a. |
| ICBC | $500 | 12 months | 0.6% p.a. |
Non-Bank Institutions
These institutions provide you with long-term protection without any early termination fees. These aren’t the equivalent of a regular premium endowment plan.
- Insurance Companies: They can insure you against any high-risk situation. Young policyholders have low pay premiums due to their low-risk profile.
- Licensed Moneylenders: These institutions are quick and easy lending companies that can provide you enough cash for any emergency. They aren’t insurance companies, but they’re handy in many unplanned situations.
- Investment Companies: High-risk appetite investors should work with investment companies to find the perfect stocks and assets that will increase their savings beyond the performance of an insurance savings plan.
Summing Everything Up
- Savings plans are greatly different from savings account
- Endowment plans aren’t the same as savings plans
- You can get huge returns from savings plans.
Loan Advisor is an excellent platform to find the best licensed moneylenders and financial products suitable for anyone in Singapore. Visit our website today and get three high-quality quotes from reputable financial institutions!
