SINGAPORE, July 29, 2015
‘88% of Singapore’s parents open a savings account for their children while only 47% invest in an educational plan for them.’
Singapore may be among the top 3 wealthiest nations in the world, but when it comes to investment for kids, surprisingly, parents are still opting for the very basic rather than specialised investment tools. Only about half the number of Singaporean parents, who open a savings account for their kids, opt for an educational plan for them.
Also, another revealing fact is that financial planning for children matters most to parents when their kids are between 0-1 years of age and tapers off when they hit 8.
Presented by the Insights team of theAsianparent.com, Southeast Asia’s #1 digital parenting destination, The Kids Bright Future Report 2015 will be of special interest to financial planners looking for fresh selling points for their policies and parents interested in long-term systematic investment planning for children. The study reflects the financial planning behaviour of parents in Singapore based on data collection from over 500 parents.
Here are 5 key takeaways from this year’s The Kids Bright Future Report:
- Most financial planning for children happens when they are 0-1 years old. A whopping 67% of savings accounts opened and educational plans signed happen before the child turns 1!
- The 2-3 years age-group is also an important financial milestone since 24% parents create a savings bank account and 21% parents opt for an educational fund during this period.
- Almost half of the parents surveyed (49%) were astute financial planners – their investment for kids included both a savings accounts and an education plan.
- 71% parents said that good interest rates guided their decision when opening a savings account for kids.
- When choosing an education plan, while interest rates are important for parents (70%), it is the guaranteed maturity benefit that is the key decider (81%).
“Saving for children is a priority for every parent and we felt the need to assess the savings’ pattern of Singapore parents. We wanted to understand whether the financial targets set for kids by parents were only related to creating their savings accounts and also how important educational plans were in the financial scheme,” said Neetu Mirchandani, theAsianparent.com’s Regional VP of Strategy & Insights.
She added, “We found it interesting to note that parents also gave weightage to factors such as no monthly service charge for savings accounts and low premium for educational plans as these are additional outflows from the family budgets.”
Interesting highlights of the study:
- Almost half of the parents (49%) surveyed save less than $100 a month and 29% save between $101-$200 per month. Very few parents save $201 and above.
- For an educational plan, parents rely largely (74%) on sourcing information through financial advisors/insurance agents. Family or friends’ recommendations (42%) are the next best sources of information.
- OCBC and POSB are the Top 2 preferred banks for parents for both – opening a savings account as well as signing on an educational plan for their kids. Additionally, DBS is the number 3 choice for a savings account while Prudential comes in at 3 for an educational plan.
- Besides high interest rates, the following factors are high on the mind of parents creating savings accounts for their children: no monthly service charge (57%), no minimum initial deposit (47%), free gift promotional offer (43%) and ease of opening an account (39%).
- For an educational fund, beyond guaranteed maturity benefit, parents are also interested in good interest rates (70%), duration of plan (52%), low premium (42%) and cash benefits (31%).
For more reports on mums in Asia, please visit the Mum Market Research page.