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A Singaporean’s Guide: Best Cash Management Accounts With Good Interest Rates and High Liquidity

From 1 Jul 2020, a few of the major banks in Singapore will be cutting the rates on their high-interest rates savings accounts.

The likes of OCBC 360Standard Chartered JumpStart, and CIMB FastSaver will be cutting their base rate to 0.60%, 1% and 0.50% respectively.

If you want to put your money into Singapore Savings Bonds, the interest rates have fallen to a low of 0.3% for the first year and 0.80% if you hold it for 10 years.

The low-interest-rate environment comes on the back of the US Federal Reserve cutting its interest rates to near zero.

With bank interest rates dropping like grapes, you might be looking elsewhere for alternatives with good interest rates and high liquidity to store your emergency fund, investment war chest or save up to fund an upcoming expense.

A few credible money management alternatives with high liquidity have emerged with Singlife launching the Singlife account, Stashaway launching StashAway Simple™, FSMOne launching their FSMOne Auto-Sweep Account and MoneyOwl launching WiseSaver.

Which of these money management accounts are best for you? Read our comparison to find out!

*Information accurate as of 28 Jun 2020.

Disclaimer: We are not sponsored by any of these companies. Check out our Seedly Code of Ethics for more information.

Tl;DR: Singlife Account vs Stashaway Simple vs FSMOne Auto Sweep vs MoneyOwl Wisesaver Comparison

Account Current Projected Interest Rate (p.a.) Capital Guaranteed
Singlife Account 2.5% Capital guaranteed by SDIC (cap of $100k)
StashAway Simple™ 1.9% N.a.
FSMOne Auto-Sweep Account 0.97% N.a.
MoneyOwl WiseSaver 0.79% N.a.

We will be comparing these money management accounts based on the following criteria:

  • Interest rate
  • Account limit
  • Fees
  • Liquidity
  • Risk
  • Extra features

1. Singlife Account — 2.5% p.a. (projected)

The first challenger is Singlife with their Singlife account, an insurance savings plan.

Do note that this account is not a bank savings account or fixed deposit and that each person can only sign up for one Singlife Account policy.

Singlife Account Interest Rate

The premise for this account is simple.

Deposit your money into this insurance savings plan and enjoy a projected 2.5% per annum (p.a.) on your first $10,000. The next $90,000 you deposit will enjoy a 1% p.a. interest rate, while any amount above that will not enjoy any returns.

Here’s a breakdown of the returns on your deposit:

Amount in Singlife Account Returns
First $10,000 2.5% per annum
Next $90,000 1% per annum
Anything above $100,000 0% per annum

This means that if you are looking to earn interest on a $100,000 savings, the maximum returns you get out of Singlife Account will be $1,150. This is a 1.15% total returns on a $100,000 savings.

However, the returns from the 2.5% and 1% crediting rate are not guaranteed and might fluctuate due to economic conditions.

A few things to take note of:

  • A minimum amount of $100 is required to start earning interest
  • There is a minimum account balance of $100 required to enjoy the basic benefits of the account. However, there will be no fall-below fee even if your balance falls below that amount.

This means that if you are looking to earn interest on $100,000, the maximum returns you get out of Singlife Account will be $1,150. This is a 1.15% effective return on an amount of $100,000.

Not very impressive but still better than most savings accounts. Interest is calculated daily and credited monthly, so you can start seeing interest being accrued on the app a day after you deposit money inside.

The good thing is that there are no hidden fees or charges.

FYI: A capital guaranteed investment product is a product where the investor is guaranteed to get back at maturity a part or all of the money he/she put in.

Liquidity is also almost immediate as you can withdraw your money anytime via FAST anytime with no lock-in period.

Based on the reviews from our Seedly Community, most users found that transferring money in and out via FAST transfer is fuss-free and quite fast.

Based on my personal experience, withdrawals from the account only took about half an hour.

If you do not see the funds after three hours, do reach out to Singlife’s customer service who will assist you with your transfer.

In terms of risk, the funds you deposit in the account are capital guaranteed.

According to Singlife,

The Singlife account policy and other Singlife policies are insured under the Policy Owners’ Protection (PPF) scheme administered by the Singapore Deposit Insurance Corporation (SDIC). Singlife is also a direct life insurer licensed by the Monetary Authority of Singapore (MAS).

The PPF Scheme provides 100% protection for the guaranteed benefits of your life insurance policies, subject to caps where applicable.

As the Singlife account is a universal life plan as stated in their product summary, which puts it under the individual life and voluntary group life policies (with the exception of annuities)

According to SDIC, the amount insured (amount deposited) has a guaranteed surrender value at the point of failure of up to $100,000.

No further action is needed from you. You can check also out the SDIC site for more information about the benefits and caps of the PPF scheme.

Singlife Account Extra Features

As the Singlife account is an insurance policy, there is actually life insurance coverage of up to 105% of the deposit in the event of death or terminal illness that will be paid out to your loved ones.

Do note that this policy is automatically renewed every 12 months. It is also subject to certain conditions and exclusions and will end once the benefit is paid out.

When you sign up for the account, you are can choose to apply for the Singalife Debit Card, a Visa card that can be used worldwide multi-currency card with no additional FX fees and zero annual fees.

Singlife Visa Debit card

An interesting thing about the card is that whatever transaction you make will be included for the retrenchment benefit.

If you happen to be retrenched within six months of the account being opened, you will get to receive the retrenchment payout for three months (terms and conditions apply).

This amount is calculated by averaging out the monthly Singlife Debit Card transactions you have made six months before the date you were retrenched.

Do note that the payout amount is capped at $10,000.

Overall, the Singlife Account is great if you want a fuss-free way to earn interest on your deposits.

Although the 2.5% projected return is not guaranteed, I like that your deposits are insured by SDIC as well as the extra features.

This is a great place to park your money as the 1.15% blended interest rate is still pretty decent for the first $100,000 you deposit.

However, It is also a mystery how they are able to provide this high projected interest rate of 2.5% for the first $10,000 given this low-interest-rate environment.

2. StashAway Simple™ — 1.9% p.a. (projected)

Stashaway Simple
Source: Stashaway

The next challenger is StashAway Simple™, a money management account offered by StashAway. Do note that this is not a bank account.

StashAway Simple™ Simple Interest Rate

Like its name suggests, StashAway Simple™’s value proposition is simple.

Deposit your money into this money management account and enjoy a projected 1.9% p.a. on any amount you deposit with no minimum balance required.

This interest is accrued on a daily basis and credited to your account.

This means that there is no cap to the amount that can earn the projected rate of 1.9%. However, this projected rate is not guaranteed and might fluctuate due to economic conditions.

Fees

The good thing about this account is that there are no StashAway management fees charged for any deposit. If you are a user of StashAway, the balance you have in StashAway Simple is not included in the calculation for your investment portfolio.

However, the account has a 0.33% expense ratio fee. The company does give a 0.125% rebate which results in a 0.205% net expense ratio for StashAway Simple™. You do not have to worry about this net fee as it is included in the calculation for the projected interest rate.

Liquidity

In terms of liquidity, there is no lock-in period and StashAway states that it would take approximately 3 to 4 business days to withdraw the money.

There are also no deposit requirements or withdrawal restrictions and you can make unlimited transfers in and out of the account at no cost.

Risk

As for risk, StashAway states that:

“the StashAway Risk Index for StashAway Simple™ is 1.7% which means you have a 99% chance of not losing more than 1.7% of your funds.”

The money that you deposit into the StashAway Simple account is split 50-50 between two funds:

  1. LionGlobal SGD Money Market Fund (“MMF”) 
  2. LionGlobal SGD Enhanced Liquidity Fund SGD Class I Acc (“ELF”).

The Lion Global SGD MMF is a fund that invests in short-term money market instruments and debt securities like government and corporate bonds, commercial bills and deposits with financial institutions.

Whereas the LionGlobal SGD Enhanced Liquidity Fund SGD Class I Acc ELF is an institution class bond fund with a lower expense ratio. The fund invests in high-quality debt instruments that are broadly diversified with no target industry or sector.

However, these funds are comparatively riskier than what MoneyOwl employs due to the exposure to the MMFs, this is why they can advertise a higher projected return.

Another downside of this account is that your deposit is not guaranteed by SDIC as after all, this is an investment portfolio.

Extra Features

Unlike the Singlife account, StashAway Simple™ has not many extra features aside from the fact that you can deposit SRS funds into the account.

Overall, this is quite a decent attempt at providing a no-frills saving option, although I would think that the 1.9% projected return will be hard to achieve for StashAway.

Also, do remember that your investment is not capital guaranteed.

3. FSMOne Auto-Sweep Account — 0.974% p.a. (projected)

Nex up we have the FSMOne Auto-Sweep Account, a money management account offered by FSMOne. Similarly, the account lets you invest in various MMFs providing you with high liquidity.

To access this, you will need to set up an online brokerage account with FSMOne Fundsupermart and opt-in for the auto sweep account.
Like the name suggests, the FSMOne Auto-Sweep Account will automatically sweep up and invest the excess monies you have in your brokerage account. You can also use this account to pay for your investments in FSMOne instantly.

FSMOne Auto-Sweep Account Interest Rate

As of 22 Jun 2020, the net yield for the FSMOne Auto Sweep Account is 0.974% p.a. Do note that the interest rate is non-guaranteed, updated on a weekly basis and is subject to fluctuation based on economic conditions.

This interest is accrued on a daily basis and credited to your account.

Fees

The good thing about this account is that there are no account limit, no sales charges and no platform fees

However, they charge fund-related expenses and FSM management fee of 0.05% per quarter which is integrated into the projected interest rate.

To start using this account you will need to deposit at least $50, while subsequent top-ups to the account require a minimum amount of $100.

Liquidity

In terms of liquidity, you can withdraw the money anytime with no lock-in period or early penalty cost. You will also your cash the next day if you make the withdrawal before 3pm. However, there is a minimum withdrawal amount of $50.

Risk

In terms of risk, the fund is quite low risk. However, your deposit is not capital guaranteed by SDIC as after all, this is an investment portfolio.

The funds you deposit into this account are funnelled to a low-risk investment portfolio in SGD consisting of these funds:

  • LionGlobal New Wealth Series – LionGlobal SGD Enhanced Liquidity — 45.00%
  • Fullerton SGD Cash Fund A — 40.00%
  • Cash Account — 15.00%

FSMOne Auto Sweep Account

The LionGlobal New Wealth Series – LionGlobal SGD Enhanced Liquidity Fund invests in high-quality debt instruments which are broadly diversified with no target industry or sector. This is the same short-duration bond fund that StashAway invests in

Whereas the Fullerton SGD Cash Fund A is a short duration bond fund invests in safe income instruments that deliver returns that are comparable to that of the Singapore Dollar Banks Saving Deposits rate. 

The instruments the fund invests in might include SGD Fixed Deposits with Singapore-registered banks and Singapore Government T-Bills.

These instruments have a minimum short-term rating of F2 by Fitch, P-2 by Moody’s, or A-2 by S&P.

This makes it rather safe.

Overall in terms of risk, the FSMOne Auto-Sweep is somewhere in between StashAway and MoneyOwl.

Features

In terms of features, this account has very little extra features as the account itself was created to add value to FSMOne brokerage accounts.

Ultimately, this money management account is a good value add if you already have an FSMoNe brokerage account. However, do note that it is limited to cash investments.

4. MoneyOwl WiseSaver — 0.79% p.a. (projected)

Last but not least we have the MoneyOwl WiseSaver money management account.

MoneyOwl Logo

To access this you will need to signup for an account with MoneyOwl.

MoneyOwl WiseSaver Interest Rate

As of 28 Jun 2020, the net yield for the MoneyOwl WiseSver is 0.79% p.a. Do note that the interest rate is non-guaranteed, updated by MoneyOwl on a monthly basis and is subject to fluctuation based on economic conditions.

This interest is prorated, accrued and credited to your account on a daily basis.

The minimum amount to deposit into the MoneyOwl WiseSaver account is $100 for a one-off deposit, or $50 if you opt for a monthly regular savings plan (RSP).

Fees

However, they do charge a fund manager fee of 0.15% p.a. paid directly to Fullerton Fund Management. This fee is integrated to the price of each unit so you won’t have to fork out anything else.

Otherwise, there are no other fees beyond this.

Liquidity

In terms of liquidity, you can withdraw the money anytime with no lock-in period or early penalty cost.

The returns you receive will be calculated based on the price at which you redeemed your units within 2 business days.

Risk

In terms of risk, this is as safe as you can get in the fund space

The funds you deposit into this account are funnelled to the Fullerton SGD Cash Fund a low-risk investment SGD fund.

The fund is a short duration bond fund that invests in safe income instruments that deliver returns comparable to that of the Singapore Dollar Banks Saving Deposits rate.

The instruments the fund invests in might include SGD Fixed Deposits with Singapore-registered banks and Singapore Government T-Bills.

These instruments have a minimum short-term rating of F2 by Fitch, P-2 by Moody’s, or A-2 by S&P.

In addition, you can see how the fund performed over the years compared to the benchmark Singapore Dollar savings deposit rates.

Fullerton SGD Cash Fund
Source: MoneyOwl

Extra Features

In terms of extra features, there are not many, as it is designed as a fuss-free money management account to complement MoneyOwl’s main services.

Overall, this money management account is a solid alternative savings solution that is safer than StashAway Simple™ due to the latter’s exposure to the MMF.

It terms of risk, it is slightly less risky than FSMOne as well.

Closing Thoughts

When comparing all these money management accounts, it seems that the winner is Singlife, as the projected interest rate of 2.5% is higher than the others. The fact that it is capital guaranteed by SDIC is also a plus. Not to mention the extra features that make it more like a bank account.

However, I still have questions about how long they can keep up this high-interest rate. Another downside to take note of is the cap of $10,000 for the first 2.5%

As for there rest, there is very little that separates the accounts from StashAway, FSMOne and MoneyOwl.

I would personally pick StashAway Simple™ as its projected returns are higher even though it is risker.

However, FSMOne’s Auto-Sweep Account is also a compelling option if you have an FSMOne brokerage account.

The safest option here would be MoneyOwl due to its less risky fund portfolio, which still delivers decent returns nonetheless.

Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock.

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