Due to the current covid-19 pandemic, we have seen quite a change in the world’s economic situation. Central banks around the world have reduced interest rates to an extremely low level. In finance, or what we call an emergency fund – has to always be liquid. It is well known to keep 3 – 6 months of funds for a rainy day. As for the amount to keep, it really depends on everyone’s personal situation. I would say, it depends on how much you spend and how willing one will be able to adjust to change their lifestyle. Given the current situation, it may be better to keep up to 9 or 12 months of emergency funds. Again, it depends very much on every individual’s finance situation.
Reduction of interest in “High Yield”saving accounts
Recently, we have seen the banks reducing the interest rates of deposit accounts or “high yield” saving accounts. It is only a matter of time when everyone else will reduce that interest amount so it is important to always keep funds liquid. You will never know what happens so it is important to stick to the rules – Keep your liquid funds liquid. A couple of months back, I found an interesting channel to keep some funds for a pretty high yield of 2.5% pa.
Of course, there are plenty of choices out there to choose from but today we shall talk a little more about an “alternative” choice as compared to a bank. Let’s throw Fixed Deposits out of the equation as well as they are close nothing at this point in time.
This is Singlife account. The interest of 2.5% p.a. is capped for the first $10,000 that you fund the account and the next $90,000 will be on 1.0% p.a. Any amount more than $100,000 will earn no interests thus this account will be suitable for anyone who wishes to keep a small sum of funds with Singlife and the hassle of having another account.
As indicated on their website, the Singlife Account is an insurance savings plan and it is neither a bank savings account nor fixed deposit. Each person is only entitled to one Singlife Account policy.) Singlife is also known as an Insurance Technology company that is licensed by MAS.
This is a really good channel to keep funds in however just take note that the 2.5% p.a. is not guaranteed and can be changed anytime. I think that this is fair given how flexible the funds can be taken out at will. In a most recent post, the news state that Singlife has raised 100 million funds in new AUM.
Below are some of the pointers that I felt is compelling enough to sign up for an account as the pros outweighs the cons at this moment and I am going to discuss more about why we should just get an account online:
First, Singlife is an insurance savings plan coupled with insurance and interest features. Fund placed with Singlife will be capital guaranteed so there will not be any hidden fees.
Second, you can earn up up to 2.5% p.a. for the first $10,000 with minimum funding of $500 to start earning this interest amount.
Third, there is insurance benefits – 105% of the account value and retrenchment benefits.
Fourth, the Singlife debit card is complementary and works like a normal debit card.
Fifth, No Lock-In. No contracts. Funds can be withdrawn anytime with no cost and minimum term.
Sixth, application is easy. Works only on an app and you can use SingPass to register easily.
Seven, funds are covered by SDIC so your funds are safe and protected for up to S$75k if there are any bank run on deposits.
In Summary, this can be a good tool for transition of better interest accounts or a medium terms solutions to parking your own funds.
There are not many bad points out there but to name a few and mainly only due to requirements and how cumbersome it can turn out to be.
First, they are relatively the new boys in town. In terms of branding and knowing who Singlife is needs to be worked on.
Second, since they are an alternative choice, traditional and conservative folks will just monitor or give it a pass
Third, the threshold of up to S$10k for 2.5%p.a. may not be appealing for some folks out there.
Fourth, having yet another digital wallet or account is going to be slightly more cumbersome. Hence this might deter more sign ups.
The other choice is to go to Tiq or Dash Easy Earn. The interest option is slightly lower but you can’t avoid opening yet another account.
The whole idea here is to share what are the different options and alternative available to park your funds. If this works for one person, it might not for the other. There isn’t a one size fits all solution but there are plenty of solutions out there. We just have to dig deeper and find out more about them. Then, we also question about the time spent to research and the effort to track different apps and accounts. It really depends on every individual. To some it might be creating more issues but to others, these solutions may be gems.
I find that these solutions are a good option for the younger group of graduates and those who have just started to find employment. You have to start somewhere so this is one avenue to do so.
To find out more about Singlife, click here: Singlife Website
This is not a sponsored post and purely my own opinion that I am writing about in my thoughts. If you like what you are seeing, do remember to check they out and do your diligence. Don’t be too fixated with what is the best.
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Images seen in this article were take off Singlife website for illustration purposes only.