I have read that interest rate are going down.. I might be a little late but what is the best way or financial product to protect myself against the fall in interest rate? - Seedly
Seedly logo
Seedly logo
 

PolicyPal

Investments

Savings Accounts

Fresh Graduates

Endowment Policies

Interest Rates

COVID-19

kristal

Asked 2w ago

I have read that interest rate are going down.. I might be a little late but what is the best way or financial product to protect myself against the fall in interest rate?

0 comments

3 answers

Answer Now

Answers (3)

Sort By

It will be good to start considering endowment plans. While you can consider investment, you have to take into account the risk that you are willing to incur. For someone who is less risk-oriented or just starting to understand about financial products, it might be wise to start with endowment plans while you learn about different investment/financial products.

Do check out this article on why endowment plans are a good alternative to bank saving accounts during this period of low-interest rate.

0 comments

👍 8
Amelia Leow
Amelia Leow
Level 5. Genius
Updated 2w ago

If your funds are in a low-interest bank account now, maybe you could consider putting it in a Singlife account, which doesn't have a lock-in period so your savings are quite liquid while generating around 2.5% in interest! I elaborate more about the account here.​​​

0 comments

👍 1

Hi Kristal,

You are perfectly on time! The earlier you come to a realization, it would be easier for yourself to make corrective actions. Rates have been going down, with a another rate cut for UOB and DBS coming up in August. I do forsee that low rates are here to stay, at least for the next few years, based on the US Federal Reserve's stance on when they will revise the interest rates.

To protect yourself against a low-rate drop, the main question is what are you currently doing with your excess funds? This can be in the form of your emergency funds and excess liquidity. If they are currently not growing any interest, it will be best to find a way to solve this problem.

If your investment knowledge is sufficient, you can make some investments in the market to help with your capital growth. If you are not there yet, you can leverage on insurance companies, where they will do the investing for you instead. You will still need to maintain your emergency liquidity in any case, but the idea is to segment a small portion of your income to ensure that it grows at an acceptable rate.

There is no best way, it all depends on your current situation and what you might be willing to accept for yourself. If you are interested to find out more about how you can workaround the current environment, drop me a message, and I can show you how best to make your money work for you!

Hope i was able to answer some of your queries! Have a great day!

0 comments

👍 0