After almost a year of high inflation that is proving to be persistently sticky, I cannot emphasize how important it is to ensure that your cash savings are working harder than ever. The biggest mistake would be to leave the cash idle earning next to nothing and seeing inflation erode your purchasing power. Moreover, in a rising interest rate macro-environment, it literally pays to be a saver these days. How much? Well, I found out that it is to the tune of 4% p.a. Here is my review of Great Eastern’s GREAT SP Series 10 which is offering a guaranteed return of 4% after 1 year.
What Is GREAT SP Series 10?
Great Eastern, a member of the OCBC Group, is the oldest and most established life insurance group in Singapore and Malaysia. It has launched GREAT SP Series 10, a single premium non-participating plan with a guaranteed yield at maturity of 4% for a short-term commitment of 1 year. This plan also provides coverage against Death and Total and Permanent Disability. It is primarily designed to help new and existing customers on their short-term wealth accumulation goals.
What Are The Features of GREAT SP Series 10?
GREAT SP Series 10 is a single premium plan and the minimum premium amount starts from $10,000. The low quantum puts it within reach of more mass retail investors.
As a 1-year endowment plan, the lock-in period is short. This offers reasonable liquidity to the policyholder and allows for short-term financial planning. For my own financial planning, a 1-year lock in is still considered a manageable period to allocate part of my emergency funds towards. For example, in the case of retrenchment, the retrenchment payouts and savings in my CASA (Current account, Savings Account) should help to buffer the loss of income for the 1st year. Thereafter, GREAT SP Series 10 would have matured and the principal and return will come in as the 2nd layer of buffer.
The figures used above are for illustrative purposes only and are subject to rounding. Please refer to the Policy Illustration for exact figures.
As shown in Diagram 1, return is guaranteed at 4%. There are 2 things that I like about GREAT SP Series 10:
- Certainty: At the point of investing in Great SP Series 10, I already know that I will be getting guaranteed return of 4% upon maturity.
- Simplicity: The process to invest in GREAT SP Series 10 is straightforward and simple which appeals to time-pressed investors.
There is a few options such as cash and SRS to fund the one-time premium of GREAT SP Series 10. Application can be made online securely on this URL from the comfort of your couch. Payment is conveniently processed via online: eNETs, AXS, bank transfer, PayNow QR. Alternatively, you can also purchase this endowment plan via your financial representative. The minimum premium amount varies by entry age and payment method. These payment options make GREAT SP Series 10 easily accessible to the retail investors.
Moreover, it is a fuss-free application with no medical check-up required.
The capital of your GREAT SP Series 10 policy is 100% guaranteed at maturity. Plus, your policy is protected up to the specified limits under the Policy Owners’ Protection Scheme which is administered by the Singapore Deposit Insurance Corporation (SDIC).
Other insurance benefits
GREAT SP Series 10 provides protection against Death and Total and Permanent Disability during the policy term. Upon Death or Total and Permanent Disability, Great Eastern will pay 105% of the single premium, or the surrender value of the policy, whichever is higher, less any indebtedness under the policy. Please refer to the product summary for the full details of these benefits.
Market Environment For Short-term Investing
There are other alternative investment options such as T-bill and Bank’s fixed deposit that provides similar 1-year maturity period. Investors would have to undergo an auction exercise to invest in T-bills and the allocation and yield is only made known thereafter. In the January 2023 auction exercise, the cut-off yield for a T-bill with 1-year maturity was 3.87%. It does take reasonable effort to understand this competitive bid process. A strong characteristic of T-bill is that CPF Ordinary Account funds can be used to invest as the source of investment funds.
From time to time, fixed deposit schemes by the retail banks do run promotions promising return slightly higher than 4%. However, the tenure of some fixed deposit schemes is shorter than 1-year and there is no guarantee that interest rate will remain at a similar rate when the time comes to make a renewal.
Note that in its recent meeting, Fed has already shown an openness to further decelerate the pace of monetary policy tightening. Therefore, it remains unknown if interest rates will stay elevated for such a prolonged period. At this juncture, GREAT SP Series 10 with a guaranteed yield of 4% after 1 year is one of the better endowment plans in the market considering the long-standing reputation of the insurer. Do note that GREAT SP Series 10 will only be available for a limited period on a first come, first served basis. Apply online at this link. Alternatively, you can also apply at OCBC branches.
*Disclosure: This article is written in collaboration with Great Eastern. It is for information only and reflects my opinion and not that of Great Eastern. The information presented is for general information only and does not have regard to the specific investment objectives, financial situation or particular needs of any particular person. You may wish to seek advice from a financial adviser before making a commitment to purchase this product. If you choose not to seek advice from a financial adviser, you should consider whether this product is suitable for you. As buying a life insurance policy is a long-term commitment, an early termination of the policy usually involves high costs and the surrender value, if any, that is payable to you may be zero or less than the total premiums paid. Past performance of a product is not indicative of its future performance. Great Eastern is not responsible to any person for this article including any unauthorised use of information. This is not an offer, recommendation or solicitation to buy or sell any products.
Precise terms, conditions and exclusions of products are in the policy contracts.
Protected up to specified limits by SDIC.
This advertisement has not been reviewed by the Monetary Authority of Singapore.
Information is correct as at 7 March 2023
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