What are the differences between the savings plans currently available?
Do Singlife, Etiqa Elastiq, Dash EasyEarn fall under savings plan? My understanding is that a savings plan entails some sort of lock-in period since the funds are invested in a money market fund (I assume), so the current options in the market doesn't seem to fall under this category. Anyone can enlighten me on this? Also, are savings plans synonymous with endowment plans?
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Hariz Arthur Maloy
01 Jul 2020
Independent Financial Advisor at Promiseland Independent
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They are properly defined as non-participating Universal Life policies that use crediting rates to provide the illustrated rate of return.
Endowment plans are usually participating which pegs their return to a participating fund mix of equities, bonds, and property. The non-par endowment plans are usually the short term 2 or 3 year fully guaranteed plans that come by now and again.
The lines are very blurred now when using the term savings. Are all these instruments to help you save and earn some form of low risk returns, yes. But they're all extremely different plans.
So consumers just have to spend a little more time reading product summaries and question how these products determine their returns.