How to Beat Inflation of 7%? Print E-mail

Interest rates on Fixed Deposits is only about 1% while inflation in Singapore for the month of April 2008 has shot up to 7.5%. Thus, when you put money into S$ Fixed Deposits, you're losing 6.5%! Your money is shrinking, not growing.

You want higher returns on your savings, but you might be conservative and risk averse and want at least some form of Capital Guarantee to protect any downside risks.

When you invest in Traded Endowment Policies (TEPs), you are actually “buying time” as you’re buying over existing with-profits endowment policies which were sold by the original policyholders before the maturity date. Instead of waiting 30 years for an endowment policy to mature, you can choose to invest in TEPs with as short as 4 years to maturity!

TEP has the following Characteristics:

  1. Guaranteed Cash Value (can choose Capital Guarantee of 70% to over 100%).
  2. Fixed Maturity Date
  3. Stable and not subject to much market volatility
  4. 90% protection granted under Financial Services Compensation Scheme.
  5. Allowed by MAS for retail investors to invest since 1 July 2004!

Unlike Foreign Currency Fixed Deposits which enjoys ZERO protection under the Singapore Deposit Insurance Corporation (SDIC), Traded Endowment enjoys 90% protection under UK Financial Services Compensation Scheme.

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