When people treat Chocolate Finance as a bank even though the website says they are not a bank, it’s not surprising people will end up buying ILPs

From Chocolate Finance website:

Chocolate Finance is not covered by the Singapore Deposit Insurance Corporation (SDIC) because we are not a bank. Banks have SDIC protection because if the bank fails, your money is at risk.

How does Chocolate finance offer more generous returns?

Your money is invested into a portfolio of fixed-income funds carefully selected to optimise risk-adjusted returns based on factors like duration, yield to maturity, credit quality and currency.

This allows the portfolio to target a return of 3.3% p.a. for the first S$20k and 3% p.a. on any amount thereafter

So Chocolate finance is not a savings account, but an investment product that invests in fixed income funds.

It is not a money market fund either.

Chocolate Finance is not a Money Market Fund. It is a managed account operated by ChocFin Pte. Ltd, licensed by the Monetary Authority of Singapore (CMS101452). The Chocolate Finance managed account, however, does invest in short-duration fixed-income funds and money market funds.

https://www.chocolatefinance.com/faqs?id=is-chocolate-finance-a-money-market-fund&category=about

Whenever someone posts about why people will still buy ILPs, I’m not surprised. Many Singaporeans are very financial illiterate and incurious. If they don’t know the difference between a savings account and an investment fund, how will they know the difference between investments and insurance.

If people would not even read the FAQ page on the website, they would not bother to read the fine print in whatever financial product the financial advisor is peddling.

The major banks provide very low interest rates but they are insured by SDIC. If I need money immediately, I have access to them immediately. Very liquid money will have very low returns as there is not much banks can do with the money to generate returns.

TLDR: know exactly where you put your money. If someone is promising higher interest, know how they are providing the return.