Hi Mr. Tan,
I wish to seek your advice on the best return single premium endownment for 5 years. This sum of money is mean for housing which i intend to use it after 5 years.
My objective is to treat the single premium endowment as a form long term fixed deposit for high return as compare to the current fixed deposit rate. Thank you for your advice.
REPLY
You have to do some work. Call the telphone numbers of the life insurance company directly. Tell them that you have $x and wish to have a 5 year single premium endowment. Let me quote the best terms to you.
You can show me the figures (of guaranteed and non-guaranteed benefit). I will help you to make a decision. The telephone numbers of the insurance companies are found in this FAQ:
http://www.tankinlian.com/faq/termd.html
Alternatively, you can ask a bank or stockbroker to find a government bond that will mature in 5 years time. You will probably get a yield of about 3%. Over 5 years, the gain should be about 16%.
The 5 year bond yields 1.26% risk free if you hold it to maturity.
ReplyDeleteThere is no other risk free instrument in Singapore , NONE, just in case you are being cheated.The insurance agents are very good at turning black to white.
Single endowment is low risk and it gives a projected return of about 2.8%. The risky part is the non guaranteed.You may end up 2.5% or lower.
If you are thinking of capital preservation and liquidity and a return of about 3%(not guaranteed)try the money market funds.
To get high return or better than above,you need take risk.
If you expect 5-7% I advise that you invest in a broadly, well diversified portfolio. No guarantee but there is a good chance if you are willing to take risk.Your time horizon is reasonably long.(medium)
NO FREE LUNCH OR NO PAIN NO GAIN. THESE ARE THE MANTRAS OF INVESTING.
Zhumeng:o)