Review of Singlife Account, An Insurance Savings Plan

Last month, Heartland Boy wrote that the top 3 local banks have reduced the interest rates of their best savings accounts. Therefore, when a new kid on the block offers 2.5% per annum on the first $10,000 of deposits, Heartland Boy latched onto the idea readily. Singlife, a direct life insurer licensed by the Monetary Authority of Singapore (‘MAS’), is offering up to 2.5% interest rate for the Singlife Account. Here is Heartland Boy’s review of the Singlife Account, an insurance savings plan that provides flexibility for top ups and withdrawals with no lock in and charges.

2.5% Interest Rate on the First $10,000

For fear of disappointing the readers, Heartland Boy thinks it is better to declare that only the first $10,000 in the Singlife Account earns up to 2.5% interest rate. Additionally, the returns are not guaranteed and Singlife has absolute discretion to change it in the future. That is fine with Heartland Boy because should the need arise, moving the funds somewhere else incurs no penalties and takes only a matter of seconds.

Diagram 1: Returns for each deposit tier of the Singlife Account

To start earning 2.5% on your first $10,000 in the Singlife Account, an initial funding of $500 is required. As Diagram 1 shows, the next $90,000 would net a return of 1% p.a. Amounts above $100K will not earn any returns though. Therefore, the effective interest rate on the first $100,000 in the Singlife Account is 1.15%. The interest rate is calculated daily and credited to your account value on the first working day of the following policy month.

Diagram 2: Returns on Heartland Boy’s savings in the Singlife Account

As shown in Diagram 2, Heartland Boy’s first $10,000 earned $1.35 for the first 2 days. That’s right, Heartland Boy chose only to deposit $10,000 as he felt that his remaining monies could earn rates higher than 1% for similar products. However, a like for like comparison should always be made. For instance, fixed deposits have guaranteed interest rates. However, the Singlife Account is highly liquid and incurs no charges for withdrawals. On the other hand, fixed deposits or regular endowment plans typically impose a penalty for withdrawal before maturity.

Transfer Funds Via FAST

Deposit and withdrawal of funds is via the Fast And Secure Transfer (‘FAST‘) methodology. This means it is almost instantaneous for funds to cross between your Singlife Account to your bank account and vice versa. There is full access to the funds via the Singlife App or the Singlife Visa Debit Card. While there is no fall-below fee, note that if the account value falls below $100, all benefits will cease. Most importantly, please note that monies deposited in the Singlife Account are protected up to specified limits by the Singapore Deposit Insurance Corporation (‘SDIC’) and the prevailing rate is $100,000 at time of writing under the Policy Owner’s Protection Scheme.

However, Heartland Boy would like to highlight that Singlife Account should not replace your bank account completely. That is because important banking functions such as PayNow, GIRO and ATM cash withdrawal are still not available yet.

Death, Terminal Illness and Retrenchment Benefit

As a product by an insurance company, it is not surprising that the Singlife Account offers some form of insurance benefits. Just like an endowment plan, it is non-participating in nature. If death or terminal illness befalls the insured and the insured is below the age of 61, Singlife will pay out 105% of the account value or $50,000, whichever is lower. For those above the age of 61, it changes to 101% of the account value or $50,000, whichever is lower. The Singlife Account will automatically cease thereafter. Normal exclusions such as pre-existing conditions or suicide within first year of application apply.

In addition, the Singlife Account also pays out retrenchment benefits if the insured is unemployed for at least 4 months. The retrenchment benefit is the average monthly card transaction values made over the past 6 months immediately before date of retrenchment, capped at $10,000 over 3 months. Note that this retrenchment benefit will not be payable if insured is retrenched within first 6 months of policy start date or if insured’s severance package is more than 3 months of monthly salary. The qualifying criteria is stringent and the benefit is capped but this is still a nice buffer to have during such difficult economic times.

Singlife Debit Visa Card

If you have a Singlife Account, you can also apply for the Singlife Debit Visa Card and it will be mailed to your residence in approximately 12 business days. There is zero annual fees and no additional forex fees payable if payment is made in foreign currency, i.e. Visa’s competitive exchange rate will be applied. If payment is made in SGD, it will be subject to dynamic currency conversion. The Singlife Debit Card can be conveniently locked and unlocked through the Singlife App and the customer will be able to view all transactions. Receive instant notifications on your spending as well. At this moment, the Singlife Debit Card is unable to perform ATM withdrawals yet.

Sign Up Online

Heartland Boy thinks that this is good product for your first $10,000, the other being the more superior GIGANTIQ or the Standard Chartered JumpStart Savings Account which Heartland Boy is too old to qualify. Singapore citizens, Singapore Permanent Residents (SPR) and foreigners holding valid passes who fall between 18-75 years will be eligible for the Singlife Account. To sign up for the Singlife Account, one has to download the Singlife mobile app first. It also incorporates MyInfo function which expedites the onboarding process.

Diagram 3: Successful application of Singlife Account and issuance of policy contract

After your application is successful, you will be asked to make your transfer to a DBS Bank Account belonging to Singlife. For anyone who has queries, kindly contact Singlife customer service at its email address via [email protected] or via whatsapp at +65 6911 1111.

Announcement: Note that from 1 Jul 2021 onwards, Singlife has reduced its interest to 1.0% for the first $10,000. To earn a higher interest rate of 2.0%, you may participate in its Save, Spend, Earn and Grow Bonus Return (review here) campaigns. In addition, there is a Member Get Member referral programme where customers and referees can earn $35 each when they sign up for the Singlife Account and Card, as well as Singlife Grow. Use my referral code NkCvYVDN or sign up via this link here

Disclosure: This article is meant purely for informational purposes and should not be construed as financial advice. For customised advice on your financial needs, you should seek advice from a licensed representative. It has not been reviewed by MAS. Information is correct as at 17 May 2020