Sunday, August 4, 2013

Create your own Child Endowment Policy using OCBC Blue Chip Plan

The recently announced OCBC Blue Chip Investment Plan came at the right time. At least for me. I was looking at creating a little endowment fund for my 10months old baby girl and was intending to set aside $1,000 to buy an Index ETF on her birthday yearly. But now with the OCBC Blue Chip Investment Plan, I can choose my favourite Blue-Chips instead of the ETF. My plan is for the endowment plan to be realized(in kind or form) by her 20th Birthday(or when she graduate from Uni) whichever is earlier. She can choose to redeem it or she can choose to continue to invest in it. Up to her. I just hope I have given her enough education till her 20th birthday to make the right and wise decision.

So have you given some thought on your child endowment plan? Do you think you want to give her the security of a GUARANTEED Return(think it's lower than 4% right?) offered by normal insurance companies or do you want to give her the long-run average return of equities?

SINGAPORE - OCBC Bank announced today the launch of the OCBC Blue Chip Investment Plan ("the Plan"), a regular investment plan that allows retail investors to purchase Straits Times Index (STI) stocks for as little as S$100 a month.
Investors can use cash or, funds from Central Provident Fund (CPF) or Supplementary Retirement Scheme (SRS) accounts to invest in one or more stocks from a selection of 19 Mainboard STI stocks and one STI Exchange Traded Fund (ETF).
OCBC Bank also saves first-time investors the hassle of opening securities trading and Central Depository (CDP) accounts by buying the stocks on their behalf on a pre-determined date every month.
The 19 stocks were selected as they are included in the CPF Investment Scheme (CPFIS) from the entire portfolio of 30 blue chip stocks in the STI.
"Blue Chip" is defined1 as common stock of a nationally-known company, with a long record of profit growth and dividend payment. Statistics from the Singapore Exchange (SGX) showed that the STI has returned an average of 9.3 per cent per annum over the last 10 years, excluding dividends; over the past 12 months, the dividend distributions of the current 30 STI stocks has totalled S$14.94 billion, of which S$7.29 billion was paid over the most recent five months. The list of 19 selected STI stocks will change as the composition of the STI changes.
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