Author
Bowtie Team
Updated on
2025-06-19
Disclaimer: This article is translated with the assistance of AI.
Explore Bowtie’s in-depth comparison of top RMB short-term savings insurance options, covering minimum entry fees, payment periods, and guaranteed returns to boost your savings strategy!
RMB Short-Term Savings Insurance
Short-term savings insurance is primarily designed for capital preservation and offers a guaranteed return rate. On the market, RMB short-term savings insurance policies typically have terms of 3 or 5 years, with some plans as short as 1 year. Premium payment options include upfront payment, 1-year payment, or 2-year payment, and the products provide a guaranteed internal rate of return (IRR) ranging from 1.83% to 3.68%.
RMB Short-Term Savings Insurance Comparison
5-Year Plan Comparison
| Product | W Company
Plan 1 |
Little H Company
Plan 3 |
| Premium Payment Period | 1 year or upfront | 2 years |
| Guaranteed IRR at Maturity | 3.68% | 3.25% |
| Guaranteed Breakeven Period | 3 years | 4 years |
| Minimum Total Premium | RMB 6,000 | RMB 75,000 |
| Guaranteed Return Ratio at Maturity | 119.8% | 115.5% |
| Product | Little H Company
Plan 3 |
C Company
Plan 3 |
C Company
Plan 3 |
| Premium Payment Period | 1 year or upfront | 2 years | 1 year or upfront |
| Guaranteed IRR at Maturity | 3.1% | 2.65% | 2.65% |
| Guaranteed Breakeven Period | 4 years | 2 years | 2 years |
| Minimum Total Premium | RMB 147,116 | RMB 60,000 | RMB 60,000 |
| Guaranteed Return Ratio at Maturity | 116.5% | 112.5% | 114% |
3-Year Plan Comparison
| Product | W Company
Plan 3 |
C Company
Plan 1 |
C Company
Plan 2 |
C Company
Plan 2 |
| Premium Payment Period | 1 year or upfront | 2 years | 1 year or upfront | 2 years |
| Guaranteed IRR at Maturity | 3.28% | 2.75% | 2.28% | 1.83% |
| Guaranteed Breakeven Period | 1 year | 3 years | 3 years | 3 years |
| Minimum Total Premium | RMB 6,000 | RMB 150,000 | RMB 10,000 | RMB 10,000 |
| Guaranteed Return Ratio at Maturity | 110.2% | 107% | 107% | 104.6% |
1-Year Plan
| Product | Little H Company
Plan 2 |
| Premium Payment Period | 1 year or upfront |
| Guaranteed IRR at Maturity | 2.68% |
| Guaranteed Breakeven Period | 1 year |
| Minimum Total Premium | RMB 60,000 |
| Guaranteed Return Ratio at Maturity | 102.7% |
Key Considerations for Buying RMB Short-Term Savings Insurance
Early Surrender May Incur Losses
Most RMB short-term savings insurance plans have a break-even period of 2–4 years, with only W company’s 3-year plan guaranteeing a return in the first year. For example, with H company’s 5-year savings plan (2-year premium payment period), surrendering early in the first year would result in a guaranteed internal rate of return (IRR) of -18.29%, highlighting the potential losses from early surrender.
Therefore, before purchasing, you must pay attention to each plan’s break-even period and surrender policy, and understand the potential losses from early surrender. Of course, it’s best for policyholders to follow the policy’s term to maximize returns.
Be Aware of RMB Exchange Rate Risks
When choosing a short-term savings policy in RMB, you also need to be aware of potential exchange rate risks. If the RMB appreciates during the policy’s term, converting the proceeds back to HKD will give you extra “profit.” On the flip side, if the RMB depreciates, your actual returns (in HKD) could “shrink.” In other words, if you’re not optimistic about the RMB’s exchange rate over the next 3–5 years, consider opting for HKD or USD savings policies to manage that risk.
Understand the Insurance Company’s Financial Status
Savings insurance differs from bank fixed deposits because the premiums you pay aren’t protected by any deposit insurance scheme. So, before buying, make sure you thoroughly understand the insurer’s operations, financial condition, and credit ratings. If the insurance company fails to honor the policy, you could lose all your paid premiums and the promised coverage.
Why ‘Buy Term, Invest the Rest’ is More Secure Than Whole Life Insurance
Besides opting for whole life insurance with lower guaranteed returns (you can use Bowtie’s exclusive BTIR Calculator to get a handle on the actual returns of these policies) , you might consider the ‘Buy Term, Invest the Rest’ strategy. This means getting pure protection with term life insurance Term Life Insurance , and pairing it with short-term savings insurance or other investment products that offer higher guaranteed returns. This way, you get solid life coverage and impressive savings growth—all for a lower premium cost.
Bowtie Term Life is a term life insurance product that provides a lump-sum payout to beneficiaries upon the insured’s death. Its key features include:
- Pure protection with no savings component
- Up to 40 times the coverage for the same premium compared to typical savings life products*
- As low as $38 per month for every $1 million in coverage
- * Calculated based on the standard premium for a 35-year-old non-smoking female with a $1,000,000 sum assured; Term Life Insurance: Data as of July 1, 2020, for standard premiums of term life insurance (20-year coverage period) in the market.
Data Sources
- 1 Compare Short-term Savings Insurance | 10Life
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