Back then I was thinking of buying a private property, hence liquidity is a key and I'm just looking for alternatives that drives higher interest rate.
The banker was honest enough to tell me that SSB might be the best solution.
Appreciative of his non-bias recommendation, I asked him what his sales target constitutes. It is mostly endowment plan.
To be very frank, 'saving for retirement' campaigns has never attract me. But because nowadays honesty is a rare virtue, I told the banker - I don't mind exploring this as I appreciate his unbiased recommendation.
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| The closest photo I snapped that kind of describe 'retirement' *lol* |
GREATLife Endowment Insurance
Details here. And for newbie like me, here's the TL;DR of what I signed up for:- 10 years of saving - amounting $4K/year.
- Can procure my saving after 15 yrs, with guaranteed amount $44K vs. more assuming 3~5% projected return:
- If I take my saving <15 years, surrender value would be much less than what I saved:
- I would enjoy additional interest rate in 360 saving accounts under the "Wealth Bucket" (for the first year only).
The OCBC banker also audited by OCBC 360 accounts and suggested I took the OCBC Great Eastern Cashflo Credit Card to pay the endowment insurance. Although I am hardly a credit card user, I buy this pitch because:
- The card can break down the annual cost to monthly installments of $333.33.
- Banker confirmed that credit card fee would be auto-waived for as long as I am paying the endowment premiums (ie for 10 years).
- Credit card fee payment can be done through GIRO - so I don't have to worry about forgetting to pay.
- If I used the credit card for another $166.67/month, it would round up to $500/month credit card transaction, which means... more interest rate for my 360 saving accounts! Summarized below:
Objectively - does it make sense for me?
At this point, my saving accounts hits >$75K. Assuming that OCBC 360 interest rates remind the same at least for the next 12 months, the return will varies between 0.82%-2.52%/yr. Not too bad.
Additionally, if I do not require the fund by the end of 15th year, I can let it run until I'm 120 years old - or pass it to my offspring/charity whichever applicable. By then, the value would range between $196K guaranteed to $1.2M assuming 4.75% return. Not too bad.
At this time, locking $40K for 15 years is highly feasible, hence I decided to proceed with this to support an honest OCBC banker & take a baby step to diversify my asset.
I'm interested to hear your feedback if this decision financially make sense.
Sincerely,
J
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