Asked 1w ago
Considering that I want to put in $5000 and I am okay with either durations, by simply looking at the interest rate, the DBS one looks better with 2% (compared to 1.85%).
However, I am slightly confused with the non-guaranteed maturity bonus. So with that in consideration, which is better (safe, maximised guaranteed earnings)? Your help will be greatly appreciated (:
DBS SavvyEndowment 3
On face value, DBS does look better as it illustrates a return of 6.12% over 3 years however the guaranteed amount is only 2% over 3 years = 2% / 3 = 0.66% per annum (Hence you see the figure $10,200 guaranteed maturity value at the end of 3 years), the non-guaranteed portion is depending on how the fund performs.
If you put in $5,000, after 3 years
Guaranteed = $5100
Guaranteed + Non-guaranteed Bonus = $5306
NTUC Income Gro-capital Ease
On the other hand, NTUC Income does look lesser with only 1.85% returns, however, this return is guaranteed which means based on the quote as per the picture, if you deposit $10k, at the end of the 2 years, you will get back $10,373.40.
If you put in $5,000, after 2 years
Guaranteed = $5186.70
I personally feel that the DBS plan has too many conditions required to get the return that they advertised. There is no guarantee that the investment return will be high, especially during this climate. As such, it is very possible that you'll only be receiving the guaranteed portion of 0.66% p.a.
I am a bit more risk averse when it comes to finding a place to store my savings, so the 1.85% guaranteed by NTUC Income is more attractive for me.
Another thing to consider is the lock up period. Gro Capital Ease is really short and only for 2 years, while SavvyEndowment is a bit longer at 3 years.
If you would like to find out more about NTUC Gro Capital Ease, I have written a review here.