Types of savings

Fixed Deposits

Fixed deposits (FDs) are regarded as safe instrument to earn interest
on your money. You place with a specific sum of money for an agreed
term and interest rate offered by the bank. Larger deposits or longer
terms of duration have higher interest rates. Generally, the rates
offered are higher than those of regular deposit/savings accounts. Upon
maturity, you can take your deposit amount and earned interest or you
can renew the investment.

Endowment

Endowment
plans are popular in Singapore as they have fixed maturity dates that
have Insurance and an element of savings built into them. Many
Endowment plans allow you to choose amount of insurance coverage and
savings you want. These plans allow your savings to accumulate interest
which is usually higher than bank interest rates.

Investment Linked Insurance

Investment Linked Insurance plans,
as its name suggests, gives you protection and at the same time allows
you to invest your savings in primarily unit trusts which consists of
bonds, equities, REITS etc, that has the potential to give higher
returns. Many Investment Linked plans allow you to choose amount of
coverage. This would be more suitable for younger people as they have
the time to ride out market volatility.

Annuity

An annuity works the opposite way of life insurance. It provides a hedge against outliving your savings.

An
annuity contract is created when an individual gives life insurance
company money which may grow on a tax-deferred basis and then can be
distributed back to the owner in several ways. The defining
characteristic of most annuity contracts is the option for a guaranteed
distribution of income until the death of the person or persons named
in the contract.

Variable annuity
is a type of annuity that has an investment backdrop as there is a
potential for higher returns. Variable annuities are usually invested
in unit trusts and variable annuity contract by making either a single
purchase payment or a series of purchase payments.

Deffered annuity
is another type of annuity which commences after a specified period in
order to earn higher interest. Deffered annuity can be either fixed or
variable depending on the plan.

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