USD Short-Term Savings Insurance Plans 2026: Compare IRR, Terms & Guaranteed Returns

Have some savings you won’t need immediately? Leaving the money in a bank account may offer limited interest, so you may be considering options such as time deposits or short-term savings insurance to earn a more predictable return over a fixed period.

Five-year policies are common in the short-term savings insurance market, although three-year options are also available. Some offers are subject to quotas or limited-time premium discounts, so availability and returns may change.

Short-term savings insurance in Hong Kong is commonly available in US dollars, Hong Kong dollars and renminbi. For the USD plans compared above, premium payment periods generally range from one to two years, while five-year policy terms are among the more common options.

10Life uses Internal Rate of Return (IRR) to compare the annualised guaranteed returns of different plans, taking their cash flows and timing into account.

Some of the plans above are available for online application, while others require offline application. If you’re unsure which option suits your needs, you can speak with a 10Life insurance advisor.

Don’t simply choose the plan with the highest return. It’s also important to understand whether the return is guaranteed or non-guaranteed.

Guaranteed IRR reflects the guaranteed return at a specified policy year, while projected IRR may include non-guaranteed benefits and could therefore differ from the actual return eventually received.

When comparing plans, start with the guaranteed IRR over the same period, then consider the premium payment period, breakeven period and projected IRR alongside your own financial needs.

For a more detailed explanation of how IRR works and how it is calculated, see our guide to Internal Rate of Return (IRR).

Short-term savings insurance won’t suit everyone. It may be worth considering if you:

• already have sufficient emergency savings and don’t expect to need this money in the short term;
• have a clear three- to five-year financial goal, such as education, a home purchase, marriage, further study or other financial planning;
• want to allocate part of your savings to an option with relatively lower volatility and a guaranteed return over a specified period;
• can comfortably complete the required premium payments and hold the policy until your target date; and
• are comfortable with the possibility of lower non-guaranteed benefits and, for USD policies, foreign exchange risk.

On the other hand, think carefully before committing money you may need for mortgage payments, starting a business, debt repayment, medical expenses, family emergencies or other major expenses within the next year or two.

If you surrender a policy early, you may receive less than the total premiums you’ve paid.

Short-term savings insurance is different from a bank deposit and is not covered by the Deposit Protection Scheme.

Your policy depends on the insurer’s ability to meet its financial and contractual obligations. This means policyholders are exposed to the insurer’s credit risk. If an insurer becomes unable to meet its obligations, policyholders could lose premiums paid and policy benefits.

Licensed insurers in Hong Kong are regulated by the Insurance Authority, which has statutory powers to intervene where potential issues arise.

You can also use 10Life to compare short-term savings insurance in different currencies, including USD, HKD and RMB, based on your target period and financial needs.

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Which USD short-term savings insurance plan offers the highest return?

Compare the guaranteed IRR, projected IRR, premium payment period and minimum premium at your target policy year. A higher return doesn’t necessarily mean a plan is the right fit, particularly if you may not be able to hold it until the target date.

What’s the difference between USD short-term savings insurance and a USD time deposit?

USD short-term savings insurance is an insurance product and generally needs to be held for a specified period to achieve its intended return. Early surrender may result in a loss. A USD time deposit is a bank deposit, where early withdrawal generally affects the interest received. The two also have different protection arrangements and risks.

Should I choose a 3-year or 5-year USD savings insurance plan?

Start with when you’ll need the money. If you have a clear use for the funds within three years, locking them away for five years simply to pursue a higher return may not make sense.

If you can leave the money untouched for longer, you can compare the guaranteed returns and surrender values of five-year plans.

Are returns on USD short-term savings insurance fully guaranteed?

Not always. Some policies include both guaranteed and non-guaranteed benefits. Non-guaranteed bonuses or terminal bonuses may change depending on the insurer’s performance, so compare the guaranteed return first before considering projected returns.

Is USD savings insurance suitable if my income is in Hong Kong dollars?

It depends on whether you expect to need US dollars in the future and whether you’re comfortable with currency risk. Even if a USD-denominated policy offers an attractive return, the amount you ultimately receive in Hong Kong dollars may be affected by exchange-rate movements and currency conversion costs.

Can I use short-term savings insurance to park spare cash?

It may be an option if you’re confident you won’t need the money during the premium payment period or before your target date. It generally shouldn’t be used for emergency savings, everyday expenses or money you may need at short notice, as early surrender could result in receiving less than your total premiums paid.

Besides returns, what else should I compare?

Look beyond guaranteed IRR and compare the premium payment period, minimum premium, breakeven period, surrender values at different policy years, proportion of non-guaranteed returns, policy currency and insurer credit risk.

10Life’s Insurance Decoder lets you compare savings insurance plans across different currencies, premium payment periods and target years based on your budget and financial needs.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.