Ask the Expert Series: Post 2020 Budget

Hi Linh, when it comes to savings, there are many ways as we save for different purpose. Savings in bank accounts are for liquidity purposes and hence as a rule of thumb, we should always have about 6 months of income as our emergency funds. However, due to the low interest rates offered by saving accounts, mid to long term needs have to be addressed by other ways which includes purchasing life/endowment policies or investing. How much risk one is able to accept will decide if one proceed with investment to grow their money or to take up endowment/retirement plans. The returns offered by endowment plans are quite low. If you’re looking for higher returns and can afford to take on more risk, go invest in ETFs or stocks. However, if you want to include an endowment plan in your investment portfolio, there are some plans which have higher guaranteed returns. These are usually plans with shorter terms, rather than those with 15- to 20 year of tenure. If one has excess cashflow to spare,