Some Questions & Answers On NTUC Income Flexi-Cash

Sat, Sep 29, 2007


Today I am going to talk to you about Flexi-Cash.

Flexi-Cash is a smart place for you to put your money. It offers advantages that fixed deposits and savings accounts cannot beat.

Highly Flexible

With no lock-in period, you can invest and withdraw anytime. There is no penalty for early withdraw. Fixed deposits may lock up your money or give a lower interest if you withdraw.

Low Risk

Your savings are invested in safe investments. You do not have to worry about losing your capital.

Competitive Yields

Enjoy potentially higher returns than fixed deposits, even for small investments from as low as $5,000.

Below are the frequently asked questions pertaining to FlexiCash.

1) What is Flexi-Cash?

It is an investment-linked plan offered by NTUC Income.

Your savings is invested in the money market fund.

Most of the money is lent as short term deposits to banks and well-rated corporations.

You can earn a return on your savings that is quite close to the short term interest rate in the money market.

2) Does the plan operate like a bank account?


You start with a minimum investment of $5,000*.

You can put in money at any time, subject to a minimum of $500.

You can also withdraw your savings at any time – with no penalty.

There is no lock-in period.

The minimum withdrawal is also $500.

3) How is the interest rate calculated?

Your money in Flexi-Cash earns interest daily.

The interest rate is indirectly reflected in the bid price of the units of the money market fund.

The bid price is likely to grow at the average rate of interest earned by the investments in the money market fund.

Currently, the average interest rate is around 3% to 3.5%.

At present, the fund deducts 0.25% to cover our expenses each year.

This is a very low charge.

The net return on the fund, after deducting the charge, is currently around 3% per annum.

The interest rate will change with the money market.

Many people expect the interest rate to increase in the near future.

If this happens, you will get more than 3% return.

4) Do I have to incur a front end charge for my investment?

Currently, the front end charge is 0.25% and it is built into the offer price of the units.

Our front end charge is very low, by market standards.

The front end charge is to pay for our expenses incurred when we invest your savings.

As you incur this charge, you should try to keep your savings for at least six months, so that the additional interest that you earned is more than sufficient to pay for this front end charge.

5) How is the 0.25% front end charge deducted?

The front end charge is showed in the difference between the offer and bid prices (also known as the spread).

We use the offer price to purchase units under your policy when you invest.

The standard spread is 0.25%.

6) How long does it take for me to recover the 0.25% front end charge and make some profit?

For every $10,000 invested, the front end charge is $25.

The rest is invested to earn interest.

It would take about 25 – 30 days to recover this front end charge.

After that, your money continues to earn interest.

The front end charge is a slight disadvantage of Flexi-cash.

You have to wait for 25 – 30 days to recover the charge.

For a normal bank fixed deposit, there is no front end charge and you earn interest immediately.

However, fixed deposits have a lock in period and penalty upon early withdrawal (forfeit all interest earned).

Over a longer period (e.g. 12 to 24 months), Flexi-cash still has a greater potential to earn a more attractive interest.

7) Will the annual charge be changed in the future?

We will try to keep the charge at 0.25% per annum.

We reserve the right to change the annual charge, so that it is sufficient to cover our cost of managing the fund.

If we wish to change the charge, we will give at least three months of notice to our investors. Any change is likely to be small.

8) Is there any charge on withdrawal?

There is no charge on withdrawal. You can withdraw a minimum of $500 each time.

9) Can I withdraw money through the ATM machine?

You can ask us to transfer the money from the Flexi-cash into your bank account.

We do it through GIRO.

It can appear in your bank account within 3 working days. You can withdraw the money through the ATM of your bank account.

10) What is the risk of losing my capital?

The risk is very, very small. In any case, if there is a loss, it will only affect a small part of your savings.

The fund is invested mainly in the interbank market, ie the money is lent to banks.

A small portion of the fund is invested with well rated corporations.

The fund is well diversified with a large number of borrowers.

The money is invested in short term deposits, with a maximum duration of three years.

The average duration is likely to be around six months.

This ensures that the investments will not be adversely affected by a large change in the interest rate.

11) Do I have to keep a minimum balance in Flexi-Cash?

You can top up or withdraw anytime, but you have to keep a minimum balance of $5,000.

12) Is there any insurance cover?

There is a minimum death benefit of 105% of total investment amount.

This is given to you at no extra cost.

In the event of death, we will pay the cash value of the investment or the minimum death benefit, whichever higher.

You can buy a term insurance or accident rider to provide the additional insurance coverage.

You will pay a separate premium for the rider.

The premium is kept at a very low cost to you.

13) Why is the Flexi-cash plan able to provide an attractive return?

We offer to you the attractive rate of return available in the money market.

This return is higher than the interest on fixed deposits.

We only take away a margin of only 0.25% per annum to cover our expenses. The rest of the return is given back to you.

Most banks take away a margin of about 1.5% on the money market return. They will offer you less than 1.5% on your fixed deposit. Although the return is guaranteed, it is very low.

14) Can NTUC Income provide a capital guarantee?

If we provide a capital guarantee, we are likely to take away an additional 0.75% per annum on your return.

This will reduce your return by 0.75%.

It is better for you to take the very small risk, and earn 0.75% more.

If there is demand, we will offer this option at a future date.

15) How is Flexi-Cash better than fixed deposits?

Fixed deposits currently offer 3% or higher, but at most for the first 12 months only.

You get a lower return or no interest if you withdraw early.

When you renew, the interest is often less than 1.5%.

You also need to put in at least $50,000.

For Flexi-Cash, you can start earning an attractive interest with $5,000.

There is no lock in period and penalty for early withdrawal.

16) I have an endowment policy which is maturing. I wish to reinvest my money. Should I invest in Flexi-Cash?

You may wish to take some time to look for an alternative investment.

Meanwhile, it is better for you to put it in Flexi-Cash.

Your money will still earn an attractive interest while you choose the next investment.

When you have made your choice, you can withdraw anytime to reinvest.

If you keep your money in a fixed deposit, there is a penalty for early withdrawal.

17) I am waiting for a right time to invest in NTUC Income’s Combined Fund. Should I still invest in Flexi-Cash?


You get to earn an attractive interest while you wait for a good time to invest in Combined Funds or other investment funds.

If you make a good return on your fund, you can also encash your profits and put them back in Flexi-Cash.

*A $30 renewal fee is applicable if you invest less than $10,000.


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This post was written by:

- who has written 437 posts on The Official Helmi Hakim Website.

A certified financial consultant, Helmi Hakim has won praise for his patience, perseverance and practicality when solving his clients' financial concerns. For more information on how you can manage your finances better, contact Helmi Hakim at 96520134.

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One Response to “Some Questions & Answers On NTUC Income Flexi-Cash”


  1. endowment savings…

    hmm.. interesting.. thanks…

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