Great Eastern Singapore GREAT SP Series 5A: 1.20% p.a. Guaranteed Returns 2-Year Endowment Plan
Considering that the interest rate for this month’s Singapore Savings Bond (SSB) is only 0.88% per annum (p.a.) if you held it for two years.
Have you ever considered an endowment plan like, say…
Great Eastern’s GREAT SP Series 5A?
TL;DR: Great Eastern Singapore GREAT SP Series 5A
For the uninitiated, Great Eastern (GE) just launched a limited tranche of its GREAT SP Series 5A single premium non-participating endowment plan.
Well, this policy has a two-year policy term and a guaranteed return of 1.2% p.a., but ONLY if you hold it to maturity.
While the return pales in comparison with the Great220 launched in 2019, I guess we will have to make do with the options available to us at this point in time.
If you have short term financial goals and are not willing to take much risk, this might be an excellent option to grow your savings.
But I digress. Here’s all you need to know about Great Eastern GREAT SP Series 5A.
Disclaimer: The Information provided by Seedly does not constitute an offer or solicitation to buy or sell any insurance product(s). It does not consider the specific objectives or particular needs of any person. We strongly advise you to seek advice from a licensed insurance professional before purchasing any insurance products and/or services.
1. 1.2% p.a. Guaranteed Returns With Two Years of Commitment, Capital Guaranteed
I know, I know. The GREAT SP Series 5A with its 1.2% p.a. guaranteed returns and a short-term commitment of just two years won’t help you achieve (FIRE) Financial Independence Retire Early in a hurry.
This is not that kind of investment.
This 100% capital guaranteed endowment plan (after two years) is a decent option; as preserving the money invested should be your top priority when it comes to saving for a short term goal.
2. Minimum Premium Of $10,000 With No Upper Limit
In terms of the investment amount.
You will need to put in a minimum of S$10,000.
Unlike other endowment plans on the market, there is no cap on the maximum amount on which the guaranteed returns apply.
3. Invest with Cash (Bank Transfer + GIRO) or SRS
The good news, you can buy the GREAT SP Series 5A endowment plan with cash through bank transfer or General Interbank Recurring Order (GIRO) and your Supplementary Retirement Scheme (SRS) funds.
But, do ensure that your SRS contribution does not exceed your balance contribution limit available.
Purchasing this policy is also pretty simple, as you can apply with SingPass MyInfo online. Not to mention that no medical examination is required.
4. Death and Total Permanent Disability (TPD) Benefits
Unfortunately, suppose the life assured dies or suffers from Total Permanent Disability (TPD). In that case, Great Eastern will pay out 105% of the single premium, or the surrender value of the policy, whichever is higher, less any indebtedness under the policy.
5. Complimentary Accidental Cover Booster
This policy also has a complimentary accidental cover booster underwritten by Great Eastern General Insurance Limited, which provides Accidental Death or Accidental Total Permanent Disability coverage.
The sum insured is five times the total single premium paid on all active GSP5A policies as of the date of the accident, subject to a maximum limit of S$1 million per insured person.
This means that if you’re paying a single premium of S$10,000, you’ll receive an accidental cover booster of S$50,000.
Also, the Complimentary Accidental Cover Booster period of coverage is the same period of insurance as per your GSP5A policy or two years from the Commencement Date, whichever is shorter
To be covered, the applicant must be:
- Aged between age 17 to 70 (age next birthday)
- Are a Singaporean, Permanent Resident or an individual holding a valid Singapore identification document such as Employment Pass, Work Permit, Long Term Visit Pass or Student Pass
- Are a Brunei citizen, Brunei permanent resident or an individual holding a valid long term pass with a validity of at least 6 months and residing in Brunei.
You can find more details about this accidental coverage here.
Yearly Returns of GREAT SP Series 5A
To illustrate the returns which you will be getting, we will be using a single premium of $100,000 over two years as an example.
There are two payout options that you can choose from:
- The Paid-Out Option to receive your cash payout annually
- The Accumulation Option to reinvest the cash payout from your first year to generate more interest:
Given a 1.20% per annum return, you will get this much for a S$100,000 premium.
- The Paid-Out Option will give you a return of S$2,400.
Of which, S$1,200 will be paid to you on your first year, another S$1,200 at maturity.
- The Accumulation Option will give you a return of S$2,430, based on an illustrated maturity yield of 1.21%.
But you will only receive it upon maturity.
If your single premium is at S$10,000, the return will be $240 or $243, depending on the options.
Also here are the Pros and Cons of the policy to take note of.
Pros of Great Eastern GREAT SP Series 5A
- Guaranteed returns of 1.2% p.a.
- 100% capital Guaranteed upon 2-year maturity
- Hassle-free online application with no medical check-up required
- Basic insurance coverage without medical assessment
- Complimentary accidental cover booster.
Cons of Great Eastern GREAT SP Series 5A
- Two-year lock-in period
- High minimum investment amount of S$10,000
- Returns are not the most exciting.
Remember, you know your financial situation the best, so plan ahead and make sure your cash flow works!
Should I Invest In GREAT SP Series 5A?
This assumes you have a sum of money ready to be locked in for the next two years.
Watch Out For The “Consumer Mentality”
Also, it’s essential for us as consumers to approach a financial product objectively. This would ensure that we do not fall prey to purchasing something that we don’t need just because they’ve used buzz words like:
“Limited Tranche Only” or “While Stocks Last”?
Do not feel pressured or give in to FOMO (Fear Of Missing Out) and take up these policies just because.
I mean, the rate of release of these short-term endowment plans – not just Great Eastern – is probably more regular than the times my dog tries to run out of the house when the gates are left unattended (read: A LOT).
In fact, Etiqa also just released its Tiq 3-Year Endowment Plan back in November 2021.
So even if you missed this, we might just see another or an even better one next time!
In short, DON’T buy into something just because you think you will be losing out if you don’t. There are plenty of other financial products around.
Like every financial product and financial planning, there is no one-size-fits-all solution to your personal finance journey. However, with careful research and continuous learning, you will better plan your finances.
And as always, read all terms and conditions for any policies or investment instruments.
Approach a professional (like your trusted financial advisor) to review your portfolio and clarify clauses and questions that you might have missed before making any decision!
How to Invest in The Great Eastern GREAT SP Series 5A
If you are keen on buying the Great Eastern GREAT SP Series 5A endowment policy, you can apply via the link here!