Insurance

Gro Capital Ease 3.38% p.a.

NTUC Income Gro Capital Ease June 2024

NTUC Income Gro Capital Ease is a single premium insurance savings plan that gives you a lump sum payout with a guaranteed return of 3.38% per annum over 3 years. Based on 3.38% per annum, the guaranteed maturity benefit is 110.49% of the single premium after 3 years. Similar to past tranches, Gro Capital Ease is available on a limited tranche and first come, first served basis.

What I like about NTUC Income Endowment Plans is that there are no hidden conditions such as having to sign up for eligible insurance plans in order to enjoy the guaranteed return of 3.38% per annum.

Taking a single premium of $100,000 as an example, you will receive a total guaranteed maturity benefit of $110,487 upon maturity of the policy after 3 years. This is based on a guaranteed yield at maturity of 3.38% per annum.

The benefits of NTUC Income Gro Capital Ease are:

  • Guaranteed maturity benefit of 110.49% of the single premium after 3 years.
  • Guaranteed yield at maturity of 3.38% per annum at the end of the policy term.
  • Guaranteed acceptance regardless of your health condition.
  • Stay protected against death & total and permanent disability (TPD before age 70).
  • Option to pay premiums using Supplementary Retirement Scheme (SRS) funds.
  • Minimum single premium for online purchase starts at $10,000 which is payable via PayNow QR, eGIRO or Supplementary Retirement Scheme (SRS) funds.
  • Minimum single premium starts at $20,000 if a purchase is made through a financial advisor representative which is payable via Cheque, PayNow QR, Internet Banking, eGIRO or SRS. The maximum single premium limit for each insured is $500,000.

What is Endowment Policy or Plan?

An endowment policy is a type of life insurance that also serves as an investment vehicle. The aim of such policy is to help policyholders save towards specific financial goals.

Policy holders can contribute a regular amount for a designated period of time or pay a lump sum upfront at the start of the policy. Part of this money goes toward a life insurance component, while the rest is invested.

Gro Capital Ease versus Best Fixed Deposits in June 2024

The best fixed deposit that I found in June was from CIMB Bank whereby the bank is giving you 3.30% per annum for a 9-month tenure fixed deposit. If you are a preferred customer with CIMB Bank, you could receive 3.35% per annum for your 9-month fixed deposit placement.

Gro Capital Ease is the obvious winner against fixed deposits given that Gro Capital Ease is providing a guaranteed return of 3.38% per annum over 3 years.

Gro Capital Ease versus Singapore Savings Bond (SBJUL24 GX24070S)

Singapore Savings Bonds SBJUL24 GX24070S

The effective interest rate for Singapore Savings Bonds (SSB) July 2024 (SBJUL24 GX24070S) is 3.30% if you held it for 10 years. For apple-to-apple comparison, if you held SBJUL24 for 3 years, the average return per year is only 3.26% per annum.

Year from issue date Interest % Average return per year %
1 3.26 3.26
2 3.26 3.26
3 3.26 3.26

Unless you want to lock in the interest rate of 3.30% per annum, there is no reason to choose SBJUL24 over the latest tranche of Gro Capital Ease which is giving you 3.38% per annum.

Gro Capital Ease versus Treasury Bills (T-Bills)

Singapore Treasury Bills Calendar 2024 6 Months

I know a lot of investors out there is going to ask why not invest into Treasury Bills (T-Bills)? The cut off yield for BS24112W 6-Month T-bill is 3.74% per annum. If you look at the interest rate, T-Bill is obviously the clear winner here.

But one consideration here is that T-Bills are only issued in 6 or 12 months in Singapore. If you would like to lock in interest rate that is slightly medium term, Gro Capital Ease at 3.38% per annum can be an ideal choice.

References:

Gro Capital Ease | Short-Term Insurance Savings Plan | Singapore (income.com.sg)

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