Should i cancel my pruflexicash?

Hi anon,

​

You must remember that T bills are only having such high rates in the current environment, and SSB are also only a 10-year investment.

​

We won't know how the interest rate environment looks like in 10 years time, let alone 22 years.

​

However PruFlexiCash does accumulate in the long run, and a quick calculation shows an internal rate of return of 2.235% p.a. in the long run. (IMO this isn't fantastic, given that you have had this plan for 3 years ago, there were definitely better plans back then)

​

The question will be, can you do better than that in the long run, taking into account that you'll have to definitely start off with a negative return if you surrender due to the surrender penalty, so you're probably needing to make a return of 3+% perhaps in order to have a better outcome than surrendering. It's probably doable.

​

Sometimes, forcing yourself to set aside money in the long run can be a good thing (think CPF), it's just whether you're getting something you would consider reasonable for what you had to sacrifice.

​

For other people reading this: Remember to compare the numbers in a cashback endowment plan should you be looking for one, a good plan is at least capital guaranteed if you opt to keep the coupons till maturity.

I have the flexicash plan too, I won't cancel it and I use the withdrawal for my expenses or use it to pay for the premiums