Singlife Account Review, is 2.5% pa too good to be true?
Update 28 December 2020 - The interest rates have been revised to 2% on the first $10,000 and 1% thereafter up to $100,000.
Recently, both OCBC and Standard Chartered has announced that they’ll be reducing their interest rates. There are only a few barely usable accounts left such as the DBS multiplier account. I think that it is very likely that even those accounts will have their rates further reduced in the coming months. Interest rates at banks have fallen to a ridiculous level that forced many people to look for alternative ways to park their cash. When I first heard about Singlife’s newest product, I knew I had to check it out and their offerings. This is my review and opinions on the new Singlife Insurance Savings Account which is offering a 2.5% pa interest yield on your deposits.
To start things off, we have to be clear that this is not a bank account. It cannot replace the existing bank accounts that you have. It is an Insurance Savings Plan.
What sets it apart from other insurance savings plans from other companies is that it allows flexible withdrawal with no lock-in period. You can deposit and withdraw your money whenever you like. By depositing money into the account, you’re essentially contributing to its premium. Not only will your money grow at the advertised rate, but you’ll also be protected under the policy.
What is Singlife?
Singlife is a fintech company that was founded in 2014 by founder Walter de Oude. No, to our disappointment it’s not founded by Henry Golding. It has since been heavily funded by many big companies and has been growing quickly ever since.
It’s first and foremost an insurance company. On its product page, we can see that it currently sells Life Insurance, Term Life and Cancer Plans. It only recently launched this savings plan in March 2020 to much fanfare.
According to recent reports, it aims to dive into the wealth planning market by 2020, so I guess this product falls under this plan. It is likely that they’ll come up with more investment-focused products in the coming months.
Insurance Savings Plan Rundown
2.5% interest pa for up to $10,000
In terms of savings, you’d get 2.5% p.a. interest on the first S$10,000 deposited. Anything more than that would yield you only 1%. Your interest rates are calculated daily and disbursed to you monthly. You’d even get to see how much interest you’ve accumulated in the app itself.
This is by far the biggest reason why anyone will want to sign up for this account. From my experience, the topping up and withdrawal process is as easy as any bank accounts. Sending my money through FAST, it gets processed and shows up on the app within seconds.
Although the interest rates drops to 1% after $10,000, I would argue that it is even better than many other banks which require so many criteria to earn their interests. 1% interest for a no requirement savings is pretty much the same as Jumpstart account after their interest rate changes. Therefore this will be very useful for freelancers or the self-employed who do not satisfy the salary credit criteria for many bank accounts.
After depositing at least $500, you’d get a free Singlife debit card delivered to you within 2 weeks. You can spend your money worldwide without any FX fees. However, note that you cannot withdraw your money at ATMs with this card. You can only use it to pay for purchases.
I’ll probably be sockdrawering my card and it most likely will never see the light of the day. With so many other competitors out there such as Revolut and Transferwise, there’s simply no reason to use this card at any of the features it’s offering.
As mentioned earlier, this is an insurance plan. Therefore it also provides a certain amount of coverage. This is of course not sufficient to replace your existing life plans, so do not rush out to make any changes to your existing coverages.
For Life Insurance Coverage, it covers up to 105% of the amount of money in your account. It basically just ensures you that in the unfortunate event that you pass away, the money you’ve deposited will be passed on to your loved ones.
As for the retrenchment coverage, that’s a temporary offer that’s very suitable for the current economic situation. This is a good to have and I really appreciate Singlife for putting this out there to help those who are affected.
Is my money safe?
This is by far the most asked question when I introduce this to my friends. Is the company reputable? Will I lose my money? What if the company goes bankrupt?
Rest assured that Singlife is an insurer licensed by the Monetary Authority of Singapore (MAS). Therefore they’d have to go through stringent audits by the authority to ensure that they are a legitimate financial business.
The funds in your Singlife account is also protected by the SDIC. This is the same organisation that protect the funds in your insurance plans and bank accounts. Take note that the protection that they have is the Policy Owner’s Protection (PPF) scheme. This scheme ensures that in the unlikely event that Singlife goes under, your policy’s benefits will be 100% upheld. Since the benefits of the Singlife Account is the amount of money you’ve put in, your money will be protected.
Just that SDIC claims are not instant, so you might have to go through paperwork and wait times for your money to get back to you. If this is something you’re afraid of, then please take note. But then again, this applies to every single financial institute that you have accounts with. So…
How do I sign up for it?
Unfortunately, you can only sign up for a Singlife Account through their mobile app. You’ll have to download their app from either the Apple App Store or the Google Play store.
Once you’re in the app, you’ll be asked to key in your mobile phone number and the registration process starts from there. You can use MyInfo to input your personal information to speed things up. Afterwards, you’ll simply have to answer a bunch of questions and you’re set. The whole process took about 5 minutes for me.
How do they sustain their interest rate?
This is a very good question that I had when I first saw the account. Given that interest rates are at an all time low and banks have cut their interest rates across the board, how is Singlife able to provide this attractive interest?
The main difference is that this is an insurance plan and not a bank account. Basically the money that you put in are effectively invested into low risk funds such as money market funds. They are not as pegged to the interest rates as bank accounts are.
Also this interest rate is not guaranteed. This means that Singlife can choose to lower the interest rate or even remove it entirely should it deem unsustainable. Personally, I think that this is one of the acquisition method that Singlife is doing to attract customers onto its platform. Once on the platform, they can upsell other insurance products to the customers and from there they can earn money.
Singlife Account Conclusion
Given the current economic climate, I don’t think bank interest rates are going to get higher anytime soon. Most of those high yield savings account might even further lower their rates in the months to come. I believe that there’s no harm in transferring some of your spare cash into the Singlife account to earn the 2.5% interest while it lasts.
The super volatile economic environment we’re in right now means that anything can change in the blink of an eye. When that happens, we’re likely to have to change our savings and investment strategy again.
You can sign up for a Singlife Account here using my link here! We’d both get $10 for free when you sign up.
If you’re currently planning your finances due to all the economic changes, perhaps take a look at my guide to automating your finances. By automating your finances, it can take away a large amount of stress from the everyday life and let machines do the heavy lifting for you.