Tuesday, October 30, 2007

BIGe from Aviva

Mr. Tan

I cannot understand how come Aviva BIGe can guaranteed interest of 3.5% without sales charges and withdrawal fees wherelse not other institution can offer that. Is there any "catch" that I overlook on this product?

REPLY

Aviva only guarantees 3.5% for 3 months. Thereafter, they have the right to reduce the interest rate (subject to a minimum of 2.5%).

Although they have to pay out 3.5%, they are able to invest in the stockmarket to earn a much higher return. They are taking some risk, but it can be covered by their risk capital.

I think that they probably invest a portion of their funds in the stockmarket to earn a higher return. This is also a good way for them to build up a base of customers for their other products. They only offer this facility on CPF savings, as the saving for most members are quite modest.
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5 comments:

Anonymous said...

For withdrawal from CPF for short term investment and later put back, there is a loss of 1 month CPF interest at 2.5% for the amount because CPF pays interest only on the lowest balance for the month, not daily interest as some people think. So have make sure worth it to invest outside for some extra gain.

October 30, 2007 9:58 PM
Anonymous said...

It is not for parking,but for short term like 1-2years. none in the market gives such reurn

October 31, 2007 1:56 PM
Khiat Han Hwee Adrian said...

If the economy remains bullish, I believe they will maintain the 3.5% interest.

In my opinion, 1% extra interest is not much. For $50k, its only $500 for the whole year provided the interest rate is maintained.

If you got $50k or $100k, you might as well invest part of the money for better returns.

October 31, 2007 3:23 PM
Anonymous said...

What about putting $50k from your SA account into growth policy and get 4% projected? Some NTUC agents are persuading buyers to do that. Is it dumb? At the best only to quit. Worse get locked up for a decade in prison. Onlt to get the same as CPF.

November 01, 2007 4:49 PM
Khiat Han Hwee Adrian said...

I won't recommend $50k from SA to be put into such Endowment Plan.

But from my experience, there are really dumb people around who insisted that they want it.
If they insisted that they want it, why go against them?

November 02, 2007 11:17 AM

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