Comparing annuity with bank deposits

Hi,

I saw your article comparing annuity to bank deposits. Shouldn't it be compared to CPF Special Account (SA) guaranteed 4% pa ? In fact, CPF-SA should be compared to annuity with Capital Protection (returning the balance money to beneficiaries upon death) which has lower monthly payments.

You mentioned that annuity is like a pooling of risk, interest earned is left inside the pool upon death. For CPF-SA, interest earned is returned to beneficiaries right?

REPLY:

The article was written to explain the difference between investing in a life annuity and in a bank deposit. This applies to the free investible savings for most people.

I have a separate article which compares the life annuity with the CPF Retirement Account. This is relevant for people who have to decide between the two options to invest their minimum sum.