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SeedlyTV S2E07

Easy Strategies For Beginners To Save up! Live on Wednesday, 27 May 2020, 8pm

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SeedlyTV S2E07

OCBC Frank Account

DBS

Standard Chartered JumpStart Account

Savings

Savings Accounts

I currently have OCBC Frank, DBS eSaving, & SC Jumpstart account. Is OCBC Frank Account okay for savings?
Hi there, I think you should consolidate all your money in SCB Jumpstart account to make use of their 2% interest till end of this month which I have already done so last year! However, starting from 1 July onwards the interest will be cut into half. So please do it now! And you can also open a Singlife account which is at 2.5% interest , pretty high and solid too!
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FIRE Movement

Savings

Savings Accounts

Investments

Insurance

SeedlyTV S2E07

Endowment Policies

Is there any risk free investment that gives higher returns than endowment plans?
My personal take is, in order for an instrument to give returns, it must be exposed to risks to get a yield. If there is no yield, then there is no risks. Hence, personally there is no such thing as risk-free investments. There is a variant of endowment plans called Traded Endowment Plans (TEPs), which are endowment plans which were pre-owned, bought-over and then re-sold by brokers, for shorter term to maturity and projected higher returns as compared to newly incepted ones. TEPs are also low-risk instrument and not risk-free. Disclaimer: I co-founded a business trading insurance policies.
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SeedlyTV S2E07

Endowment Policies

Insurance

Savings

I have a 20 year endowment that my parents bought for me since I was young. Should I continue on holding to it if I want to invest instead?
Hi anon, If your parents bought it for you when you were young, there's proabably not that many years of payment left. I'm guessing maybe 5 more years at most to pay. Then you can just let it roll and not bother about it, till it matures. It will act like a fixed income portion of your portfolio. Please don't surrender the policy unless you have no other option. The compounding effects are tremendous, and you should get a pretty decent payout when it matures. You can check your policy value by logging in to the insurer's portal (might be under your parent's name however, you have to check). Older policies from the early 2000s have pretty decent rates.
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SeedlyTV S2E07

Savings

Savings Accounts

Are there any downsides of having a savings plan? If yes, what are they and what are some considerations I need to take note of before having one?
Hi anon, A savings plan sacrifices liquidity for guarantees. You have to make a commitment to paying the premiums over a number of years, and thus it has to be a comfortable amount within your budget. In exchange, if you hold to maturity, you get a guaranteed maturity value, plus potential upside from non guaranteed returns. Naturally, due to the profile of the investment allocation, it won't be the same level of returns as a pure equity portfolio, but this is also not an apple to apple comparison either. Savings plans can be a decent vehicle if you have a time bound commitment whereby funds must absolutely be ready without any risk. The easiest example is education. If your child was going graduate from university this year with a loan due, would you have a $50K maturity proceed payout to you, or be forced to liquidate your stock portfolio that's down 30% from what you expected? No strategy/asset class is perfect. Know the product and you will know if it fits your needs, even if you only need it years later.
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SeedlyTV S2E07

Investments

Endowment Policies

ETF

Insurance

Investment Linked Policies (ILP)

Online Brokerages

Investing into ETF fund vs Endowment plan - which is a wiser choice given that I am an 18 year old investor?
I can't say which is a better choice. You should spend some time understanding both asset classes. One gives you the returns of the market, but it can also give you the losses. The other is a guaranteed return investment with downside protection and some upside potential, regardless of market conditions. Which would you prefer? (This, you have to answer yourself) If you have enough budget, there's also no harm doing both. Protecting our downside is part of risk management when investing. Endowments offer a way to do just that for a portion of your portfolio, without any intervention or management needed from your end.
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SeedlyTV S2E07

COVID-19

Savings

Savings Accounts

Will the interest rates of banks fall as the economy continues to contract?
Boon Peng
Boon Peng
Level 6. Master
Answered 3d ago
When interest rates fall, it is generally good for the borrowers because they can finance their loans at a cheaper rate. On the other hands, the savers are not happy because of they are getting lower interest income. As a result, this group of people who never invest before might start looking to invest in financial products to generate higher yield.
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SeedlyTV S2E07

Savings

Career

Education

Savings Accounts

Family

Lifestyle

I am working full time as a part time psych student, graduating soon. I have 2 years of work bond left. Should I pay off my bond and study full time or serve the bond but waste my time away?
Tay WenHao
Tay WenHao
Top Contributor

Top Contributor (May)

Level 7. Grand Master
Answered 1w ago
The question that you need to ask yourself is, why did you sign the bond for your current work in the first place? My guess is that previously when you graduated from (poly?), you decided to start work first while pursuing your part time psych (degree?). However, I'm puzzled that you have 2 years bond left. Which means you signed something like a 4-5 year bond from the start? Did you signed it because of some attractive bonus to fund your part time psych? If the main reason for you bond was for finance, then it doesnt make sense for you to break the bond and pay the penalty. If so, in the first place you could have just borrowed money from your parents for further education. Also the most important consideration now is the COVID Pandemic. Everyone is getting pay cut / retrenchment. You are lucky to have a bond to 'secure your job'. Think about it, would your parents have enough spare cash to pay for your bonds? What if your parents lose their job at the end of the year. Will you guys have sufficient savings to tide thru? Lastly, my opinion is to continue for the next 2 years and finish off your bonds. Meanwhile, start saving more of your income so that you can purse your studies afterwards. Also, if you decided to pursue full time studies, apply for bank loans. Keep your savings for your daily expenses.
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SeedlyTV S2E07

Savings

Savings Accounts

Undergraduate

I am an undergraduate and all my money is currently in a DBS Savings Account. Are there any other better ways to grow my savings with higher interest rates?
Amanda
Amanda
Level 5. Genius
Answered 4d ago
Hi Anon, I would suggest you to open the following accounts: 1. Singlife: 2.5%p.a. for first 10k 2. Standchart's Jumpstart: 2%p.a. for first 20k (Do note that you have to open your account before you turn 27) 3. OCBC's Bonus + Savings account: 1.45%p.a. if you deposit $500 a month and make no withdrawals. If you do not deposit $500 a month but you make no withdrawals you will earn 1.05%p.a. for that month. 4. CIMB's Fastsaver: 1.0%p.a. Some of these accounts have great perks, such as debit cards cashback. Jumpstart account offers 1% cashback on eligible transcations with no minimum spend. If you are still using your DBS account, I suggest you to use the DBS visa debit card. If you hit a minmum spend of $400/ month via contactless transcations, you will be eligible for 3% cashback, capped at $20/month. A relatively great deal!
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SeedlyTV S2E07

Insurance

Health Insurance

Hospitalisation Insurance (H&S)

Critical Illness (CI)

My parents (~50 years old) stopped buying insurance a few years ago. Recently, they want to repurchase it again. Will it be very expensive now given their ages? Is it worth for them to buy it again?
Hi anon, Your parents will need to undergo medical underwriting prior to getting any new insurance coverage of any sort. The outcome depends on factors such as: Is your dad's HBP well controlled? Is he on medication? etc, as well as his current BP readings. For hospitalization, you may want to try Raffles Shield for your dad. Hospitalization plans will cost more with age, but I would still recommend it, as it will cover any large hospitalization bills that may occur. At a minimum they should have a decent hospitalization plan covering government hospitals with a rider to limit their out of pocket costs. On top of that, consider long term care coverage such as Eldershield as well as supplements to improve the payout. This can be paid via Medisave so there will be less strain on cashflow. Lastly, they may consider critical illness cover to provide for loss of income should anything occur, but it may be expensive considering their age. I am not an underwriter, but just to share with you: shield plans have the strictest underwriting requirements.
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SeedlyTV S2E07

Giveaways

[GIVEAWAY] What are your favorite ways to save or multiply your savings and why?
Kenneth Lou
Kenneth Lou, Co-founder at Seedly
Level 9. God of Wisdom
Answered 1w ago
Here's my Savings Stack to help me multiply my basic interest rate! - OCBC 360 savings account (main account) - Main rolling salary account - SCB JumpStart for Joint account savings - $20k at 2% p.a - CIMB FastSaver for Joint account extra savings - $5-6k at 1% p.a - SingLife savings - $10k (soon at 2.5% p.a) - And some short term endowment policies as well Pretty much this :)
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