Comparison of Singapore Bank Savings Account VS Resale Endowment Policies (REPS)

Most of us park our money in a bank savings account as they offer higher interest rates than a typical standard bank account. However, amid the recent coronavirus pandemic, banks in Singapore have lowered their interest rates on their savings account.

Furthermore, you are required to fulfill a number of criteria (salary crediting, credit card spending, GIRO transactions, and/or insurance and home loans) + have a certain amount of savings to enjoy the maximum effective interest rate.

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Source: Heartland Boy

Most banks have decreased their rates drastically by 1% lesser than usual on average. With the decrease in bank savings account interests, is there a better wealth instrument with the same stability available for us to park our money in?

Here’s a comparison chart on the returns one can get through investing in a bank savings vs investing in a REPS, based on $10k.

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Resale Endowment Policies (REPS), also known as traded endowment policies, are basically existing endowment plans (or whole life plans) that have been given up by their original policy owners before maturity. Instead of surrendering the plans to the insurer, the original policyholders sell it to a resale endowment provider.

One might ask, is investing in a REPS as safe as parking my money in the bank? The answer is yes.

Just like a bank savings account, REPS is a low maintenance and stable investment. This makes REPS suitable for all profiles, especially conservative consumers. REPS is covered and protected under High Capital Protection and Singapore Deposit Insurance Scheme (SDIC) as well, giving consumers a peace of mind.

The best thing out of all? Other than just simply parking in your money, one does not have to fulfill other criteria to enjoy the projected returns that REPS offer.