Endowment or structured deposit give better returns

[Singlenotbui]

In 2017 i sign up a 5 years structured deposit with a bank. I put 5k. Every year i get $95 n its guaranteed. I think when it ends 5 years later, there will be abit more interest paid to me.

Now i look at the endowment plans, the guaranteed interest rate is like so low. I not interested to look at non guaranteed rates. If i put 5k into endowment plan, i don't think i can even get back $95 every year

I think the guaranteed rates for endowment plan is even lower than structured deposit?

Seems like its better to put your money into structured deposit than to put in endowment plan?

 

[boredboiboi]

In 2017 i sign up a 5 years structured deposit with a bank. I put 5k. Every year i get $95 n its guaranteed. I think when it ends 5 years later, there will be abit more interest paid to me.

Now i look at the endowment plans, the guaranteed interest rate is like so low. I not interested to look at non guaranteed rates. If i put 5k into endowment plan, i don't think i can even get back $95 every year

I think the guaranteed rates for endowment plan is even lower than structured deposit?

Seems like its better to put your money into structured deposit than to put in endowment plan?

Depends on which type of endownment. There are a few that just ended we call it trench, its 2.25 or 2.3% per year and its only 3 years term. Capital and return is guaranteed.

 

[Singlenotbui]

Depends on which type of endownment. There are a few that just ended we call it trench, its 2.25 or 2.3% per year and its only 3 years term. Capital and return is guaranteed.

What is trench?

When i look at the endowment plans brouchure, i don't see then writing guaranteed 2.25 or 2.3% per year leh.

I believe for endowment plans to give so high guaranteed rates, they must require u to put in a large amount, for example 50k n above.

Whereas for structured deposit just need minimum 5k

 

[boredboiboi]

What is trench?

When i look at the endowment plans brouchure, i don't see then writing guaranteed 2.25 or 2.3% per year leh.

I believe for endowment plans to give so high guaranteed rates, they must require u to put in a large amount, for example 50k n above.

Whereas for structured deposit just need minimum 5k

Trench is come out limited time only. Yes usually min is about 20k

 

[Prof. Utonium]

Trench is come out limited time only. Yes usually min is about 20k

e.g. NTUC Capital Plus.

Hotcakes products.

 

[Value.Matrix]

In 2017 i sign up a 5 years structured deposit with a bank. I put 5k. Every year i get $95 n its guaranteed. I think when it ends 5 years later, there will be abit more interest paid to me.

Now i look at the endowment plans, the guaranteed interest rate is like so low. I not interested to look at non guaranteed rates. If i put 5k into endowment plan, i don't think i can even get back $95 every year

I think the guaranteed rates for endowment plan is even lower than structured deposit?

Seems like its better to put your money into structured deposit than to put in endowment plan?

I have yet to see insurers give 0 NG bonus for 25 years though. If you tell me out of 25 years, 5 years never give NG, i still can believe lah.

If you tell me no TB, i also believe lah (AIA financial guardian was hit by AIG that time).

If you are risk adverse, look at the 3.25% BI. But that means the market is bloodbath, no TB, and market has been in extended recession for 5 to 7 years.

 

[Shiny Things]

In 2017 i sign up a 5 years structured deposit with a bank. I put 5k. Every year i get $95 n its guaranteed. I think when it ends 5 years later, there will be abit more interest paid to me.

Now i look at the endowment plans, the guaranteed interest rate is like so low. I not interested to look at non guaranteed rates. If i put 5k into endowment plan, i don't think i can even get back $95 every year

I think the guaranteed rates for endowment plan is even lower than structured deposit?

Seems like its better to put your money into structured deposit than to put in endowment plan?

Structured deposits usually involve you taking some sort of risk in return for higher yields. That is, you might get back a lot less than you put in.

Endowment plans involve you locking your money up and not being able to touch it for five years. This is not great, especially when you can get higher guaranteed yields by buying Singapore government bonds or SSBs (and you can get to your money more easily!)

They're both terrible investments, on the whole.

 

[Shiny Things]

What is trench?

I hate to be that guy, but—he means "tranche". A trench is the hole you dig in the ground to lay a pipe. A "tranche" is a single offering of a financial product, or a single class of a financial product.

 

[qhong61]

Structured deposits usually involve you taking some sort of risk in return for higher yields. That is, you might get back a lot less than you put in.

Endowment plans involve you locking your money up and not being able to touch it for five years. This is not great, especially when you can get higher guaranteed yields by buying Singapore government bonds or SSBs (and you can get to your money more easily!)

They're both terrible investments, on the whole.

How abt fixed deposit?

 

[Mecisteus]

How abt fixed deposit?

https://www.moneysense.gov.sg/articles/2018/10/understanding-structured-deposits

 

[qhong61]

https://www.moneysense.gov.sg/articles/2018/10/understanding-structured-deposits

Thanks. Seem fixed deposit safer for retirees.

 

[maple96]

Structured deposits usually involve you taking some sort of risk in return for higher yields. That is, you might get back a lot less than you put in.

Endowment plans involve you locking your money up and not being able to touch it for five years. This is not great, especially when you can get higher guaranteed yields by buying Singapore government bonds or SSBs (and you can get to your money more easily!)

They're both terrible investments, on the whole.

Pls dun continue to write like a book!

The past 2 years, there have been short term endowment plans with guaranteed returns and guaranteed capital, and the returns are higher than SSBs. Do u know what is the latest returns for SSB? Do u know how much is the guaranteed returns for short term endowment plans? 2.7%, 2.5%, latest is 2.3%! (some prior posts already explained)

Same for structured deposits. U have to read the tnc on how it is structured, some have guaranteed capital, guaranteed returns but maturity return is dependent on some outcome. So read the tnc. Dun just generalised or write sweeping statements!

 

[henrylbh]

I am quite certain TS was referring to the structured deposit offered by maybank in the past. But he cannot compare previous deposit with current endowment cause return on instruments change with time, assuming return and capital guaranteed.

 

[Singlenotbui]

I am quite certain TS was referring to the structured deposit offered by maybank in the past. But he cannot compare previous deposit with current endowment cause return on instruments change with time, assuming return and capital guaranteed.

I got structured deposit from uob. Not from maybank

 

[henrylbh]

I got structured deposit from uob. Not from maybank

I don't recall uob gives guaranteed interest except first year and remaining years would depend on performance of underlying products.

 

[Shiny Things]

The past 2 years, there have been short term endowment plans with guaranteed returns and guaranteed capital, and the returns are higher than SSBs. Do u know what is the latest returns for SSB? Do u know how much is the guaranteed returns for short term endowment plans? 2.7%, 2.5%, latest is 2.3%! (some prior posts already explained)

You’re right, I stand corrected: the rates on endowment policies should be higher than SSBs, I don’t know why I wrote that they’re not. After all, endowment policies have a much tighter lockup (penalties if you withdraw early); they don’t have the embedded put option that SSBs have (because you can always redeem SSBs at 100, they’ve effectively got a valuable embedded option on interest rates going higher / bond prices going lower); and above a certain point you’re taking the credit risk of the insurer as well.

Those three things make endowments worse than SSB, and the trade off doesn’t seem great. You’re picking up, what, 0.8% over the 5-year SGS yield on those short-term endowments? That doesn’t even cover the credit risk of the insurer, much less the embedded put option and the liquidity premium.

Same for structured deposits. U have to read the tnc on how it is structured, some have guaranteed capital, guaranteed returns but maturity return is dependent on some outcome. So read the tnc. Dun just generalised or write sweeping statements!

OK, c’mon, this one I have to pull you up on. I worked on an FX options desk. I used to write the T&Cs for those structured deposits. I know exactly where we used to hide the extra risk and the extra fees. Those were good money for my desk.

 

[Mecisteus]

Pls dun continue to write like a book!

The past 2 years, there have been short term endowment plans with guaranteed returns and guaranteed capital, and the returns are higher than SSBs. Do u know what is the latest returns for SSB? Do u know how much is the guaranteed returns for short term endowment plans? 2.7%, 2.5%, latest is 2.3%! (some prior posts already explained)

Same for structured deposits. U have to read the tnc on how it is structured, some have guaranteed capital, guaranteed returns but maturity return is dependent on some outcome. So read the tnc. Dun just generalised or write sweeping statements!

For the endowment, you are giving up credit risk and liquidity for the slightly higher returns.

Same thing with SD. Something must give for the higher returns.

So don't need to sound like a big expert.

 

[maple96]

For the endowment, you are giving up credit risk and liquidity for the slightly higher returns.

Same thing with SD. Something must give for the higher returns.

So don't need to sound like a big expert.

It is simple common sense, u dun need an expert to tell u

When one is willing to put money into a 5-year endowment policy with guaranteed returns of 2.7% pa, liquidity is not a concern to the person, it is like putting monies into a 5 year FD. Where is the credit risk when it is covered by SDIC?

To each his own!

 

[Singlenotbui]

It is simple common sense, u dun need an expert to tell u

When one is willing to put money into a 5-year endowment policy with guaranteed returns of 2.7% pa, liquidity is not a concern to the person, it is like putting monies into a 5 year FD. Where is the credit risk when it is covered by SDIC?

To each his own!

Can you tell me which endownment policy give 2.7% pa for 5 years policy?

Can send me a pte message too

I may consider putting my money into it

 

[boredboiboi]

Can you tell me which endownment policy give 2.7% pa for 5 years policy?

Can send me a pte message too

I may consider putting my money into it

Used to have from great eastern and 2.8% from manulife.
But all the tranche end already. Now highest should be 2.25% by singlife for 3 years and 2.38% for 5 years