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Wednesday, 2 May 2018

Wealth Preservation: GE270 vs CDP-SBJUN18

This blog post will not go into how much to qualify or how to go about the purchase.This will just be my humble opinion of the 2 products GE270 and CDP-SBJUN18.

Basically,  the above picture speaks more than a thousand words.

The illustration is for a $100k single premium which works well for a comparison to Singapore Saving Bond (SSB), CDP-SBJUN18 in your bank statement.

GE270 is an endowment products that have "Death" and "Total & Permanent Disability" throughout the term.

There wasn't information on the proceed amount but the usual total proceed is 105% for the premium paid. Please check with the official before you commit to any products.

Basically, the important points to note are

a) Option 1 gives a guarantee paid out.

b) Option 2 give a "non guarantee paid out" which can be change without prior notice!

c) You will lose money if you need to redeem early.

Singapore Saving Bond (SSB), CDP-SBJUN18 have a cap of $100k for your CDP Account.

This means even if you got $250k which is the cap for GE270, you can only use $100k at most.

Basically, the important points to note are

a) You need to have a CDP account before you can apply. Are you in time for CDP-SBJUN18 opening a new account if needed?

b) You need to apply through an ATM machine with a $2 transaction fee and you might not get the full amount you applied.

c) You can redeem early with no penalty in multiples of $500 up to the amount you have invested for each bond with a $2 fee per redeem and you get pro rated interest rate depending on the duration.

Basically, this means if you do not know how to invest your money and wanted some certainty, Using $100k as an example, GE270 "Option 1" beats CDP-SBJUN18 by the below comparison if we hold for 5 years.

1) GE270 "Option 1" Guarantee Return for 5 years is

Capital $100k
Payout $13500

2) CDP-SBJUN18 Early Redemption Return for the 5th year is

$100k capital redeem in full amount,
which is taking back
Capital $100k
Payout $10,540 - $2 = $10,538 (edited)

Multiples of $500 is from $500, $1000, $1500 to the full amount.

Please note there is no $2 transaction fee if you hold to maturity.

So will I participate in the above 2 products?

For me I won't.

Another Good Deed Done!

1 comment:

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