I started chasing for yield when I was as young as 16. CIMB FastSaver was the most popular no frill savings account recommended by many. I was happily earning my extra cai png money every month for years until Standard Chartered introduced the Jumpstart account in 2019, offering 2% for the first $20k. Low interest rate environment has been tough for many savers like us, it was only recently did Standard Chartered Bank reduce the interest rate of Jumpstart account for the first $20k to 1%.
Forget about ordinary savings accounts by banks, I had to look elsewhere to earn interest on my excessive cash. Insurance Savings plans gained popularity in recent months due to the fact that it provides a higher interest rate compared to ordinary savings accounts. This inspired me to write an article about the Best Savings Product in Singapore and has been a hit since it was published as many like you and I are chasing for yield in this low interest rate environment.
I recently updated my article after Singlife decided to reduce its interest rate for the first $10k to 2%. I have reviewed my list and decided to add GIGANTIQ as the second best savings product. In this follow up article, I will elaborate why GIGANTIQ is the best alternative to Singlife account.
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GIGANTIQ is capital guaranteed
GIGANTIQ, like any other insurance savings policies, is protected under the Policy Owners’ Protection Scheme administered by the Singapore Deposit Insurance Corporation. This scheme arises because MAS does not guarantee the soundness of individual financial institutions and thus it is set up to protect policy owners in the event of a failure of a PPF life or general insurer scheme member. GIGANTIQ, a product of Etiqa Insurance is one of the members of PPF Scheme and was recently rated “A” by Fitch. This shows how credible Etiqa Insurance is and that the Protection Scheme serves as an additional security for policyholders.
Under the Policy Owners’ Protection Scheme, SDIC will cover up to $100k of individual life and voluntary group life policies for aggregated guaranteed surrender value per life assured per insurer and a cap of $500k for the aggregated guaranteed sum assured. This means that in the case where Etiqa Insurance were to fail, any amount up to $100k will be guaranteed by SDIC.
GIGANTIQ is an insurance savings plan by Etiqa Insurance that can now be bought using PolicyPal.
In the later part of this article, I will explain how you can enjoy an exclusive promotion when you buy GIGANTIQ through PolicyPal.
Start with as little as $50, GIGANTIQ allows users to earn higher returns while enjoying the flexibility of anytime top-ups, withdrawals with no lock-in period of penalty. Besides acting as a savings plan, it offers death coverage of 105% of account value, in the event of death while policy is in force.
In this low interest rate environment, high interest rates offered by banks’ savings accounts or insurance savings plans are hard to come by. Unlike high yield savings accounts offered by major banks in Singapore, which requires savers to meet certain requirements, GIGANTIQ does not require policyholders to meet such requirements just to receive the interest rate as advertised.
The minimum guaranteed crediting rate is 1% p.a and GIGANTIQ offers additional 1% p.a as bonus thus offering 2% p.a, up to first $10k, for the first year, without fulfilling any requirements. This means putting $10k in GIGANTIQ and seeing your money effortlessly grow 2% in the first year. To ensure that capital is fully guaranteed each year, the projected non-guaranteed crediting rate for subsequent years is 1%.
The crediting rate for GIGANTIQ will be reduced from 2.0% p.a. to 1.8% p.a. (1.0% guaranteed and 0.8% non-guaranteed).
This will be in effect for all new GIGANTIQ’s signups after 18 November 2020, 2359. Users who have signed up for GIGANTIQ before the stipulated deadline will continue to enjoy the 2.0% crediting rate. This includes users who have made an application before the stipulated deadline.
As mentioned earlier, GIGANTIQ allows policyholders to top up anytime through Direct Debit – POSB or DBS account, cashable credits in existing Etiqa eWallet, own or third party POSB or DBS account. The maximum aggregate amount a policyholder can top up is $200k, less the single premium paid plus all partial withdrawal and transaction fee.
Do take note that the 2% interest rate (before 18 November) is only for the first $10k, and any excess amount will earn 1% for the first year. However, please take note that under Policy Owners’ Protection Scheme, it only covers up to $100k per life assured per insurer. Therefore, it is important not to put all eggs in one basket and spread out the risk to different insurers.
No doubt the liquidity of insurance savings plans cannot be compared with any ordinary savings account, GIGANTIQ does not have any lock-up periods and allows policyholders to withdraw any time they wish to. For every withdrawal made, a transaction fee of $0.70 or $0.50 will be charged via PayNow or Direct Credit – POSB or DBS account respectively.
It is important to note that if policyholders wish to continue to keep the policy in force, they must ensure that the average daily Account value for the calendar month must be at least S$50 else policy will be deactivated after 30 days grace period notification by Etiqa and premiums be refunded.
When it comes to Insurance Savings Plans, one aspect I will look at is liquidity. It is very difficult to replicate the same liquidity a typical savings account has to offer on an Insurance Savings Plan.
Having done thorough research on Savings Products available in the market, be it Insurance Savings Plan and Cash Management Solutions, GIGANTIQ and Singlife by far have the highest liquidity among the rest.
Comparing Cash Management where one has to wait for a few working days before the proceeds get credited in the bank account, Insurance Savings Plan like GIGANTIQ will be able to achieve that within a day or less.
What’s great about GIGANTIQ is that it does not have a lock up period unlike its predecessor – ELASTIQ, so we can do withdrawal anytime so long $50 or more is in the policy to avoid any deactivation.
I have no other complaints except the fact that policyholders will be charged $0.50-$0.70 each time they withdraw. This is at least 1 day of interest lost if $10k is put in it. Some might think that the charges are hefty for them, depending on how much one puts in. Honestly, I would be hesitant to commit to this policy if I were to treat it as my main savings plan to stash my cash. However, I am fine signing up for GIGANTIQ if I have any amount excess of $10k not used frequently since one can purchase this policy with as little as $50.
I think that one must have a gameplan on how to set aside funds for such products. For example, one can treat GIGANTIQ as a place to stash their emergency fund while their Singlife can be their main daily expenses and savings account.
The point is to prioritise the fund in which you need frequently in a policy that does not charge withdrawal and the excess in another. Afterall, Singlife and GIGANTIQ offer 2% for the first $10k. This means earning 2% for a year with $10k each put in Singlife and GIGANTIQ.
How to purchase GIGANTIQ?
You can now purchase GIGANTIQ policy by Etiqa Insurance on PolicyPal’s mobile app too!
PolicyPal is now having a exclusive promotion in which you can earn up to a bonus of 8% p.a in PolicyPal credits credited monthly, when you refer your friends to purchase GIGANTIQ and/or buy additional policies through PolicyPal. The credits can be used to redeem cash, vouchers, or donations.
The bonus 8% bonus promotion has been extended to 31 January 2021, 11.59pm or until the tranche closes (whichever is earlier).
To enjoy this exclusive promotion as shown on the table below, you can sign up for GIGANTIQ through PolicyPal with this link or referral code (FRUGAL).
(% of total premium on PolicyPal)
|No of Times||Max Bonus|
|Refer a friend to purchase GIGANTIQ||0.2%||20x||4%|
|Purchase a policy from PolicyPal||1%||4x||4%|
|Total Max Bonus||8%|
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