Whats the risk involved when saving in high interest savings account (singlife, Gigantiq, easy learn)?

Hi there.

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” may not be guaranteed (Singlife’s 2.5% is not as they have stated) or guaranteed only for some time period(For Gigantiq, the bonus 0.8% p.a. return on the first $10,000, is only for the first policy year).

Of course, bank account interest rates also change regularly with market rates, and one can transfer the money to chase the highest interest available (if not locked up as noted in first point)

Thirdly, the insurance savings plans 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)

This Seedly article goes into detail about some of these insurance savings plans, check it out for more details :)

https://blog.seedly.sg/insurance-savings-plan-s...

I have done a video review highlighting the risk and rewards of investing in insurance savings plan.

Do the breakdown here in a video

https://www.youtube.com/watch?v=GKDE2SnsedE&t=1s