GREAT270: Short-Term Endowment Plans & Factors To Consider
Great Eastern has launched their popular short-term Endowment Plan again this time for their 110th Birthday, the GREAT 270 Endowment Plan.
Note: We are not sponsored to do this. All opinions are our own, we just like to help you!
I don’t believe I am the only one having my Instagram stories flooded with promotional shoutouts by the respective insurance agents. Kudos to them though for their hard work!
While it is the Financial Advisors’ jobs to sell their products and maybe educate the consumers, it is our job as consumers to do our very own research (IMPORTANT!)
The correct mentality to adopt for consumers
- Do not feel pressured to take policies up simply because of marketing gimmicky words such as “limited time only” and “while stocks last”.
- There is no lack of good financial products around as long as one does his research.
- Always take note of the fine prints for any policy and investment instrument.
Now, assuming we successfully adopted the above mindset, let’s take a look at the GREAT270 objectively, shall we?
Key features of GREAT 270
- 5-year single premium – consumers will invest a lump sum into the policy which lasts for 5 years.
- The policy pays out an interest of 2.70% every year. This is guaranteed.
- One can choose to either withdraw the 2.70% interest earned every year or reinvest it into the policy.
- Minimum investment of S$10,000
A quick glance at GREAT270’s return
Short term, moderate returns
According to an article which Seedly wrote a while back, the GREAT270 falls under the category of short-term endowment plan.
In this case of GREAT270, their pros are cons are as such:
Pros of GREAT270
- Relatively low risk given that they are products of reputable insurance companies
- No worry about losing principal sum upon maturity
- Beats inflation
Cons of GREAT270
- A relatively large sum of money required (i.e. S$10,000)
- You may lose money if you surrender early
There were a few products in the past that could compete comparatively to the GREAT270:
- The FWD Insurance Endowment Plan which is fully subscribed – 2.02% p.a. for 3 years
- The ancestor of the current GREAT270, the GREAT205, which promises 2.05% p.a. for 3 years
Note: They are both no longer available.
Who is this policy for?
- Consumers of Singapore Savings Bonds, Fixed Deposits. This is another alternative to that.
- Risk-averse investors looking to beat yearly inflation (core inflation at an average of 1.9% for the past 10 years).
- Investors looking to diversify their portfolio in the short-run.
- Definitely a better option than letting your money sit in the bank.
- Probably not for active investors looking for a longer investment horizon.
How can I get this?
- Over the Counter at Great Eastern or OCBC Banks
- Your trusted Financial Advisor
Seedly Personal Finance Community: Investing with Supplementary Retirement Scheme (SRS)
We understand that that GREAT270 allows consumers to use Supplementary Retirement Scheme (SRS).
- Terence Lio, a contributor to the Seedly Personal Finance Community states that while people start their SRS to save on tax, such financial products can be seen as a bonus on top of the tax saved.
- Christopher How also mentioned that while getting the policy in cash makes sense. Using of SRS to invest and not being able to withdraw the money until years later should be a factor to consider.
Here is our Community’s take on this product:
- Damien Png – My take: A good product for those who put into FD or SSB every year. This is for extremely low risk. 2.72% is higher than SSD/FD/SD and most longer-term endowment plan. If you need something to give good returns and won’t use the money up from now till 2023, go ahead and sign this up.
Plus, it gives you some insurance coverage. Even better if you use your SRS.
- Soon XiaoHui – As long as this amount is not your emergency fund, & you can hold for 5 years, why not. Every year such plans will appear, so don’t just 1 time put a large figure.
We want to find out how women would prefer to deepen their personal finance knowledge, share with us what you think!