AMA The Woke Salaryman
Asked on 24 Sep 2020
Firstly, we have to understand that the above accounts are not bank accounts or fixed deposits, but are insurance savings plans structured similarly to a bank account.
Therefore, there may be liquidity issues (e.g. lock up periods, needing to transfer to another bank account before being to able to withdraw)
Secondly, the “interest rate” is not guaranteed (Singlife’s 2.5% is not as they have stated) or guaranteed only for some time period (only for 1 year for some plans). Of course, bank account interest rates also change regularly with market rates.
Thirdly, those are insured under the Policy Owners’ Protection Scheme and not under Deposit Insurance Scheme for all other bank accounts. Terms and conditions for insurance of amount deposited would of course be different (e.g. amount protected differs with $100k under PPF vs $75k under DI)