I saw an advertisement of the new policy, called MyRetirement, from Aviva. Here are my views:
a) The capital is guaranteed
My view: A long term investment that is capital guaranteed usually pays a poor return. Please check carefully.
b) There is a guaranteed return of up to 2.38% per annum. This means that the return could be lower than 2.38% p.a. but could not be higher than 2.38% p.a.
My view: A return of 2.38% p.a., is quite poor for savings that is locked up for a long term.
c) It provides a guaranteed monthly income for 10 years.
My view: This statement means nothing. If I have $120 dollars, I can also get a monthly income of $1 over 10 years. It is more important to get an adequate return on your monthly income.
A better choice
If you are investing for the long term, make sure that you can get a yield of at least 4% per annum. You can attend the FISCA talk on financial planning or investments (see http://easyapps.sg/assn/Org/Event.aspx?id=5) to find out some better choices.
a) The capital is guaranteed
My view: A long term investment that is capital guaranteed usually pays a poor return. Please check carefully.
b) There is a guaranteed return of up to 2.38% per annum. This means that the return could be lower than 2.38% p.a. but could not be higher than 2.38% p.a.
My view: A return of 2.38% p.a., is quite poor for savings that is locked up for a long term.
c) It provides a guaranteed monthly income for 10 years.
My view: This statement means nothing. If I have $120 dollars, I can also get a monthly income of $1 over 10 years. It is more important to get an adequate return on your monthly income.
A better choice
If you are investing for the long term, make sure that you can get a yield of at least 4% per annum. You can attend the FISCA talk on financial planning or investments (see http://easyapps.sg/assn/Org/Event.aspx?id=5) to find out some better choices.
Before the Minibond saga, FIs dared not use the word "Guaranteed" nonchalantly, which is contractual, legally.
ReplyDeleteNow, they play around with this Word, "Guaranteed" by subtly sneaking in with a " up to 2.38% returns." Like what TKL said, on certain years may have only 1.38% returns guaranteed, and then wrestle themselves out of the discrepancy of the other 1% by making a scapegoat out of poor economic world conditions beyond their control.
Heads the Insurer wins, tails they also win.