Ask the Expert Series: Post 2020 Budget

In line with the 2020 budget being announced last Tuesday, we are having a special Ask the Expert with Ang Hui Chin, Head of Financial Advisory at PolicyPal, where she will be answering your questions all about financial planning and preschool finances. So start asking your questions from now till Friday ?

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I heard endowment plans has higher interest rates than banks. Is this true? Is the difference very drastic

Hong Huizhen

Queen of 1 fun loving 4 year old and a 4 month old

4y ago

It is true that endowment plans offer higher interest returns compared to saving your money in a bank account or even fixed deposit account. A typical bank savings account offers around 0.05% p.a; fixed deposit of12 months offer between 1.5% p.a to 1.8% p.a. Short term endowment plans of 24 to 36 month tenures offers between 2.1% p.a to 2.5% p.a. with a minimum single premium. However, it is important to note that savings in banks can be withdrawn anytime with no penalty while endowment plan requires a time commitment. Like all traditional life insurances, early termination of the policy will lead to monetary loss.

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