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Complete Guide To Cash Management Accounts In Singapore [2023 Edition]

This article is republished with permission from Dollars And Sense .

09-Sep    Share!

Cash management accounts have become increasingly popular and widely available with numerous platforms offering them. They allow us to earn a relatively good interest return on our savings, while taking on only low risk.

Many of uslikely understand the importance of investing. However, the funds we invest are usually earmarked for long-term expenses, such as for our retirement or children's education. This isbecause we are able toride out short-term price fluctuationsand economic cycles affecting the value of our portfolio.

All ofus will also have another bucket of funds meant for shorter-term savings and liquidity requirements. This could be for our emergency funds or money set aside foran upcoming big-ticket expense such as a wedding, home renovation, or car purchase. We may also be savingfundsthat we intend to invest periodically due to the volatile markets or until we find the right opportunity.

Since we need to use these funds in the short term, we cannot afford to investin stocks, only tosee our portfoliodive 30% during a market crash.This is where cash management accounts enter – allowing us to earn an interest return on our shorter-term savings.

What Is A Cash Management Account?

Cash management accounts enable us to earn a decent interest return by taking on a small level of investment risk. Typically, funds that we park in a cash management account are invested in money market funds and/or short-term bonds.

In Singapore, a cash management account is typically offered by financial institutions that are not a bank, such as brokerages and investment platforms. Cash management accounts continue to offer us a highlevel of liquidity, allowing us to withdraw our funds with no lock-up. There is also no cap on the amount we can invest in them.

However, it isn't the same as putting our funds in a bank account as we cannot leverage on the extensive network of banks to withdraw money from ATMs or branches, or tap on payment services online or with a debit card.

It also isn’t the same as other tools such as fixed deposits, high-interest savings accounts or the Singapore Savings Bonds (SSB), as these are not exposed to investment risks. Often, there may also beconditions placed on such products. For example, many fixed deposits give us attractive interest rates on an initial amount of savings as well as lock in our funds for several months or even years. High interest rate savings accounts typically enable us to earn incremental interest returns upon fulfilling conditions that include crediting our salary, spending on our credit card, purchasing investment products and more. There mayalso caps on the amount of funds that can earn a higher interest rate. For example, the Singapore Savings Bond has a maximum cap of $200,000.

 

Cash Management Accounts In Singapore

There are around 10established platforms offering cash management accounts in Singapore.

Besides cash, certain cash management accounts also allow us to invest our Supplementary Retirement Scheme (SRS) account funds. This allowsus to receive tax relief while also earning a decent interest return on our funds.

Also, when we invest in cash management accounts, we need to understand that projected returns are exactly what it is - projected. This means actual returns may deviate. Nevertheless, the underlying funds that the cash management accounts aretypically invested in short-term and safe debt securities.

Another thing to note is that unlike fixed deposits and bank deposits, our investments in cash management accounts are not protected by the Singapore Deposit Insurance Scheme (SDIC).

Read Also: How You Can Maximise Your Savings For Retirement Just By Using Your Supplementary Retirement Scheme (SRS) Account

 

Endowus Cash SmartSecure

We can invest both our cash and SRS funds into this cash management account.

Returns

The projected returns for individuals investing in Endowus Cash Smart Secure is 3.6% to 3.9%. This is after taking into consideration that Endowus rebates trailer fees to investors, as well as the fund-level fee and Endowus’ fees.

Minimum Initial Deposit

While there is no minimum initial deposit for Endowus Cash Smart Core, we need to invest $1,000 into the Endowus platform, which also consists of its cash investment and CPF investment solutions.

Underlying Funds

Endowus Cash Smart Secureinvests 50% of its funds in the Fullerton SGD Cash Fund and the other 50% in the LionGlobal SGD Enhanced Liquidity Fund.

As stated in its factsheet, the Fullerton SGD Cash Fund "intend to hold its assets primarily in Singapore Dollar deposits with eligible financial institutions with varying terms of maturity of not more than 366 calendar days." It also states that up to 10% of its net asset value may be placed with eligible financial institutions exceeding 366 days but not more than 732 days.

LionGlobal SGD Enhanced Liquidity Fund invests "in a broadly diversified portfolio of high quality debt instruments." It also states that it invests in debt instruments diversified across varying issuers and tenures while maintaining weighted average portfolio credit rating of A-.

Fees

Endowus Access Fee per year - 0.05%

Fund-Level Fees

The expense ratio is what we incur as a total each year. Note that Endowus also rebates trailer fees back to us, and states that the fund-level fees after this is 0.15% per annum.

Fullerton SGD Cash Fund:

  • Expense ratio - 0.15%

LionGlobal SGD Enhanced Liquidity Fund

  • Expense ratio - 0.31%

Read Also: Endowus Cash Smart Account: Why A Cash Management Account Is Important During This Low-Interest Rate Environment

 

Endowus Cash Smart Enhanced

We can invest both our cash and SRS funds into this cash management account also on Endowus.

Returns

The projected returns for individuals investing in Endowus Cash Smart Enhanced is 4.3% to 4.6%. This is after taking into consideration that Endowus rebates trailer fees to investors.

Minimum Initial Deposit

While there is no minimum initial deposit for Endowus Cash Smart Enhanced, we need to invest $1,000 into the Endowus platform, which also consists of its cash investment and CPF investment.

Underlying Funds

Endowus Cash Smart Enhanced invests 50% of its funds in the UOB United SGD Fund and the other 50% in the LionGlobal SGD Enhanced Liquidity Fund. From this, we can understand that the UOB United SGD Fund is slightly riskier and hence provides a slightly higher projected return compared to the Endowus Cash Smart Securedportfolio.

UOB United SGD Fund invests "in money market and short term interest bearing instruments and bank deposits with the objective of earning a yield enhancement over Singapore dollar deposits."

LionGlobal SGD Enhanced Liquidity Fund invests "in a broadly diversified portfolio of high quality debt instruments." It also states that it invests in debt instruments diversified across varying issuers and tenures while maintaining weighted average portfolio credit rating of A-.

Fees

Endowus Access Fee per year - 0.05%

Fund-Level Fees

The expense ratio is what we incur as a total.Note that Endowus also rebates trailer fees back to us, and states that the fund-level fees after this is 0.27% per annum.

UOB United SGD Fund:

  • Expense ratio - 0.33%

LionGlobal SGD Enhanced Liquidity Fund

  • Expense ratio - 0.31%

 

Endowus Cash Smart Ultra

We can invest both ourcash and SRS fundsinto this cash management account.

Returns

The projected returns for individuals investing in Endowus Cash Smart Ultra is4.6% to 4.9%. This is after taking into consideration that Endowus rebates trailer fees to investors.

Minimum Initial Deposit

While there is no minimum initial deposit for Endowus Cash Smart Ultra, weneed to invest $1,000 into the Endowus platform, which also consists of its cash investment and CPF investment.

Underlying Funds

The difference between Endowus Cash Smart Core, Enhanced and Ultra is in the slight possibility of negative returns. Its historical maxloss is -5.39%.

Endowus Cash Smart Core Ultra does have higher volatility for a cash management account, but it also gives the one of best returns among other cash management accounts. To achieve the returns while maintaining stability, Endowus Cash Smart Core Ultra comprises 5 funds:

27.5% in LionGlobal SGD Enhanced Liquidity Fund whichinvests "in a broadly diversified portfolio of high quality debt instruments." It also states that it invests in debt instruments diversified across varying issuers and tenures while maintaining weighted average portfolio credit rating of A-.

25% in LionGlobal Short Duration Fund which invests in an actively managed portfolio of Singapore and international bonds, high-quality interest rate securities, and other related securities.

25% in Fullerton Short Term Interest Rate Fundwhich invests in fixed income securities and money market instruments with no specific industry or sectoral emphasis.

12.5% in Nikko Shenton Income Fund which aims to provide regular income distributions while seeking to achieve returns in excess of 4% per annum over the medium to long term.

10% in PIMCO Low Duration Income Fund which seeks to achieve attractive income by actively managing and tapping into multiple areas of the global bond market, while maintaining relatively low interest rate exposure with a secondary goal of capital appreciation.

Fees

Endowus Access Fee per year -0.05%

Fund-Level Fees

The expense ratio is what we incur as a total.Note that Endowus also rebates trailer fees back to us, and states that the fund-level fees after this is 0.29% per annum.

LionGlobal SGD Enhanced Liquidity Fund:

  • Expense ratio - 0.31%

Fullerton Short Term interest Rate Fund

  • Expense ratio - 0.14%

LionGlobal Short Duration Fund

  • Expense ratio - 0.31%

Nikko Shenton Income Fund

  • Expense ratio - 0.42%

PIMCO Low Duration Income Fund

  • Expense ratio - 0.50%

Invest Better With Endowus

If you’re interested to start investing with Endowus, you’ll be happy to know that DollarsAndSense readers can enjoy$20 off their access fee (equivalent to $10,000 advised free, assuming an access fee of 0.40%).Sign-up using this link to claim this special offer.Terms & Conditions apply.

 

FSMOne Auto-Sweep Account

TheFSM Auto-Sweep account automatically "sweep" all our excess cash from sales proceeds, bond maturities, dividends and coupons towards earning better returns. This helps us eliminate any period of time when our funds are sitting idleto earn better-than-bank interest rates.

Do note thatfunds we deposit into our FSM account but do not give any instructions to "auto-sweep" into investments, will not be automatically invested. FSM currently offersa CNH Auto-Sweep Account – enabling us to automatically sweep excess Chinese RMB – and a USD Auto-Sweep Account for our US Dollars.

When we invest through FSM, we don't have to do anything for the money to be transferred from this account and into paying for our investments.

Returns

The projected returns on FSM’s SGD Auto-Sweep Account is 3.185%p.a.The projected returns on the USD and CNH Auto-Sweep Account is 4.595% and 1.894%.

Minimum Initial Deposit

There is a minimum one-time deposit of $50.There is no minimum balance required though.

The minimum initial deposit for the USD and CNH accounts are US$50 and CNH 200.

Underlying Funds

FMS Auto-Sweep Account invests 60% in the LionGlobal SGD Enhanced Liquidity Fund, 15% UnitedSGD Money Market,10% of its funds in the Fullerton SGD Cash Fund, and keeps the remaining 15% in cash. This is why it delivers a slightly lower return even though it is invested in the same underlying funds as the Endowus Cash Smart Core portfolio.

As stated in its factsheet, the Fullerton SGD Cash Fund "intend to hold its assets primarily in Singapore Dollar deposits with eligible financial institutions with varying terms of maturity of not more than 366 calendar days." It also states that up to 10% of its net asset value may be placed with eligible financial institutions exceeding 366 days but not more than 732 days.

LionGlobal SGD Enhanced Liquidity Fund invests "in a broadly diversified portfolio of high quality debt instruments." It also states that it invests in debt instruments diversified across varying issuers and tenures while maintaining weighted average portfolio credit rating of A-.

The CNH account is 90% invested in theiFAST-Lion CNH Enhanced Liquidity A CNH and 10% in a Cash Account; while the USD account is 90% invested in theiFAST USD Enhanced Liquidity A USD and 10% in a Cash Account.

Fees

A management fee of 0.05% per quarter is charged, amounting to 0.2% per year.

Fund-Level Fees

The expense ratio is what we incur as a total.

Fullerton SGD Cash Fund:

  • Expense ratio - 0.15%

LionGlobal SGD Enhanced Liquidity Fund

  • Expense ratio - 0.31%

UnitedSGD Money Market Fund

  • Expense ratio - 0.33%

 

Phillip Smart Park (SGD)

Similar to FSM Auto-Sweep Account, we cannot park our Supplementary Retirement Funds (SRS) into Phillip Smart Park.

Returns

Phillip Smart Park is projected to pay an interest return of 3.2268%p.a.

Minimum Initial Deposit

We need to maintain a balance of at least $100in our POEMS account to enjoy investing via the Phillip Smart Park account (SGD).

Underlying Funds

The underlying fund is the Phillip Money Market Fund.

Fees

There are no fees charged for maintaining this account.The only fees we incur is from the fund level.

Fund-Level Fees

Phillip Money Market Fund:

  • Expense ratio - 0.37%

Read Also: Money Market Funds: What Are They And How Singapore Investors Can Use Them

 

Phillip Smart Park (USD)

Similar to FSM Auto-Sweep Account, we cannot park our Supplementary Retirement Funds (SRS) into Phillip Smart Park.

Returns

Phillip Smart Park is projected to pay an interest return of 4.7584%p.a.

Minimum Initial Deposit

We need to maintain a balance of at least $100in our POEMS account to enjoy investing via the Phillip Smart Park account (USD).

Underlying Funds

The underlying fund is the Phillip US Dollar Money Market Fund.

Fees

There are no fees charged for maintaining this account.The only fees we incur is from the fund level.

Fund level Fees

Phillip Money Market Fund:

  • Expense ratio - 0.37%

Start investing with POEMS

Those new to POEMS can sign-up for a trading account, and enjoy low brokerage costs and no custody fees to over 11 markets.

 

StashAway Simple

We can invest both our cash and SRS funds into this cash management account.

Returns

The projected returns for StashAway Simple is 3.6% p.a. As listed on its website, StashAway rebates trailer fees back to investors to achieve this return. A spokesperson from StashAwaytells us that it takes itsadvertised projected rate very seriously, and may provide an additional StashAway rebate to its investors to achieve it.

Minimum Initial Deposit

There is no minimum deposit or balance required.

Underlying Funds

StashAway Simple allocates 30% of our funds in the LionGlobal SGD Money Market Fund and the other 70% in the LionGlobal SGD Enhanced Liquidity Fund.

The LionGLobal SGD Money Market Fund aims to invest in high quality short-term money market instruments and debt securities to provide a return comparable to that of SGD short-term deposits.

LionGlobal SGD Enhanced Liquidity Fund invests "in a broadly diversified portfolio of high quality debt instruments." It also states that it invests in debt instruments diversified across varying issuers and tenures while maintaining weighted average portfolio credit rating of A-.

Fees

StashAway does not charge any fees to investors.The only fees we incur are from the fund level.

Fund-Level Fees

LionGlobal SGD Money Market Fund:

  • Expense ratio - 0.19%

LionGlobal SGD Enhanced Liquidity Fund

  • Expense ratio - 0.31%

Read Also: StashAway Simple Cash Management Account Vs Regular Savings Accounts - What's the Difference?

 

StashAwaySimple Plus

StashAwaySimple Plus delivers higher returns (by shouldering slightly higher risks). We can use our cash and SRS to invest in this cash management account.

Returns

The projected returns for StashAway Simple Plus is 4.9% p.a. StashAway also rebates trailer fees back to investors to achieve this return.

Minimum Initial Deposit

There is no minimum deposit or balance required.

Underlying Funds

StashAway Simple Plus splits our investmentinto three funds. 20% goes into theLionGlobal SGD Enhanced Liquidity Fund, which invests in a broadly diversified portfolio of high quality debt instruments.

35% goes towardsthe Nikko AM Shenton Short Term BondFund, which has exposure toa diversified portfolio of good quality, short-term bonds and money market instruments. There is no target industry or sector and the Fund is not country-specific.

The remaining45% is invested inthe LionGlobal SGD Short Duration BondFund, which investsin an actively managed portfolio of Singapore and international bonds, high-quality interest rate securities, and other related securities.

Fees

StashAway does not charge any fees to investors.The only fees we incur are from the fund level.

Fund-Level Fees

LionGlobal SGD Enhanced LiquidityFund:

  • Expense ratio - 0.31%

NIKKO AM Shenton Short Term Bond Fund

  • Expense ratio - 0.40%

LionGlobal SGD Short Duration BondFund:

  • Expense ratio - 0.31%

Enjoy 50% Management Fees For 6 Months With StashAway

For those who are interested to try theStashAway platform for yourself, StashAway is giving 50% off in management fees for 6 months, for up to $50,000 in portfolio value.

That makes it perfect for givingStashAway a try and see if it is the robo-advisor for you. You can sign-up for free today to enjoy this exclusive promotion.

 

StashAwaySimpleGuaranteed

StashAwaySimple Guaranteedwas recently launched to provide guaranteed interest to investors. We can use our cash and SRS to invest in this cash management account. However, unlike other types of cash management accounts, we cannot withdraw our invested funds any time we wish. This is because StashAway Simple Guaranteed is invested in a fixed deposit – with a lock-in period of 6 months.

Returns

The projected returns for StashAway Simple Guaranteed is 3.5% p.a. StashAway also does not charge any management fees.

Minimum Initial Deposit

There is no minimum deposit or balance required.

Underlying Funds

StashAway Simple Guaranteed is invested in a fixed deposit with Citibank Singapore.

Fees

StashAway does not charge any fees to investors.

Fund-Level Fees

Since our money isinvested in a fixed deposit, rather than funds, there is no fund-level fees.

Read Also:Investing In Fixed Deposits: How StashAway Simple Guaranteed Locks In A Fixed Return As Markets Become More Volatile

 

Syfe Cash+ Flexi

Currently, we can invest ourcash onlyinto this cash management account.

Returns

The projected returns for Syfe Cash+ is3.7% p.a. As listed on its website, Syfe also rebates 0.13% trailer fees back to investors to achieve this return.

Minimum Initial Deposit

There is no minimum deposit or balance required.

Underlying Funds

Syfe Cash+ allocates 30% of our funds in theLionGlobal SGD Money Market Fundand 70% in theLionGlobal SGD Enhanced Liquidity Fund.

The LionGLobal SGD Money Market Fundaims to invest in high quality short-term money market instruments and debt securities to provide a return comparable to that of SGD short-term deposits.

LionGlobal SGD Enhanced Liquidity Fundinvests "in a broadly diversified portfolio of high quality debt instruments." It also states that it invests in debt instruments diversified across varying issuers and tenures while maintaining weighted average portfolio credit rating of A-.

Fees

Syfe does not charge any fees to investors.The only fees we incur are from the fund level.

Fund-Level Fees

LionGlobal SGD Money Market Fund:

  • Expense ratio - 0.19%

LionGlobal SGD Enhanced Liquidity Fund

  • Expense ratio - 0.31%

Read Also:Syfe Cash+: How Is It Different From Other Cash Management Accounts?

Start investingwith Syfe

If you are interested to get started oninvesting with Syfe,DollarsAndSensehas an exclusive partnership with Syfe - enjoy0% management fee for the first $30,000 during the first 6 monthsafteryou sign up.Apply here to enjoy the promotion.

 

Syfe Cash+Guaranteed

More recently, the Syfe Cash+ Guaranteed account was launched. As its name hints at, this is a guaranteed product, and is invested in fixed deposits. There is also a lock-in period of 3 months.

Returns

The projected returns for Syfe Cash+ Guaranteed is3.7% p.a.

Minimum Initial Deposit

There is no minimum deposit or balance required. As mentioned, there is a lock-in period of 3 months.

Underlying Funds

Syfe Cash+ Guaranteed works inpartnership with various banks regulated by MAS (Monetary Authority of Singapore) that offer fixed deposits

Fees

Syfe does not charge any fees to investors.

Fund-Level Fees

Since our money isinvested in a fixed deposit, rather than funds, there is no fund-level fees.

 

Tiger Vault

Tiger Vault, by Tigher Brokers, works slightly differently to the other cash management accounts, giving investors more control in the funds we want to invest in. We need to switch on the “auto-sweep” function if we want Tiger Brokers to sweep our cash balances into Tiger Vault. It also offers SGD, USD and soon-to-be-launched HKD cash management accounts.

Returns

Tiger Vault offers over5%annual return through the funds available on its platform. Do note that we need to select the actual fund(s) that we want to invest in.

Minimum Initial Deposit

We can activate Tiger Vault with an investment of just $1.

Underlying Funds

 

As mentioned, there is no fixed portfolio for us to invest in. We can choose to invest in:

For SGD investments:

  • Fullerton SGD Cash Fund “A” Acc
  • LionGlobal SGD Enhanced Liquidity “A”
  • LionGlobal SGD Money Market “A” (SGD) Acc
  • United SGD Money Market “D” (SGD) Acc

For USD investments:

  • Fullerton USD Cash “A” (USD) Acc
  • LionGlobal USD Enhanced Liquidity “A” (USD) Acc

 

Fees

Tiger Brokersdoes not charge any fees for Tiger Vault.The only fees we incur are from the fund level.

Fund-Level Fees

As we can see, many of the funds offered by Tiger Vault are also part of other cash management accounts. This way, we can either choose our preferred portfolio mix or stick to a single fund.

Fullerton SGD Cash Fund:

  • Expense ratio - 0.15%

LionGlobal SGD Enhanced Liquidity Fund

  • Expense ratio - 0.41%

Fullerton USD Cash Fund

  • Expense ratio - 0.31%

LionGlobal USD Enhanced LiquidityFund

  • Expense ratio - 0.39%

Read Also:Tiger Vault: 6 Things You Need To Know About This Latest Cash Management Account When Investing Through Tiger Brokers

moomoo Cash Plus

Another broker-led cash management account is moomoo Cash Plus.

Returns

Weearn different returns depending on the actual fund that weinvest in.By turning on moomoo’s“Smartsave” feature, our uninvested funds will be swept into the cash management fund.

Minimum Initial Deposit

The minimum investment amount is $0.01.

Underlying Funds

There are two main funds we can invest in:

  • Fullerton Cash Fund; and
  • CSOP USD Money Market Fund

Fees

moomoodoes not charge any fees, so the only fees we incur are from the fund level.

Fund-Level Fees

As we can see, many of the funds offered by Tiger Vault are also part of other cash management accounts. This way, we can either choose our preferred portfolio mix or stick to a single fund.

Fullerton SGD Cash Fund:

  • Expense ratio - 0.15%

CSOP USD Money Market Fund:

  • Expense ratio - N.A.

Read Also:moomoo Cash Plus: How Can We Earn Even Higher Returns While Investing

Sign-up with moomoo

For Singapore investors who are looking to open a moomoo account for the first time, you can check out the attractivesign-up promotions that moomoo has here.

 

 

What About Fixed Deposits and High-Interest Savings Accounts Or Singapore Savings Bonds (SSB) and Treasury Bills (T-Bills)?

Other very safe investments includefixed deposits, high-interest savings accounts, the Singapore Savings Bonds (SSB), or government treasury bills (T-bills). Giventhe rising interest rate environment, we can earn a decent return on these risk-free fixed income products today.

Nevertheless, by taking a little more risk via cash management accounts, we can grow our funds by a slightly higher amount. Moreover, most cash management accounts offer us greaterflexibility of using our funds. We can withdraw or invest them, rather than lock-up our cash (at least for a period of time) in some of the products mentioned above.

There are at least two cash management accounts that are invested in fixed deposits – which means that there will be a smalllock-in period of 3 to 6 months.

 

Which Of Our Funds Should We Park In A Cash Management Account?

As mentioned, we should not use put cash meant for our daily expenses into our cash management accounts as we cannot leverage on banking services, such as ATMs, payment facilities on iBanking or debit card.

While we can invest all our funds, it makes most sense to invest only funds that we do not want to put into the financial markets to earn a higher return over the long term, while taking on risks that may see its value substantially rise or fall. This includes:

– Emergency funds, which should amount to 6 to 12 months of our daily expenses

– Money earmarked for an upcoming big-ticket expense, such as wedding, home renovation, or to purchase a car

– Funds that we do not want to invest into the markets right away, but will pour into the markets when we spot opportunities or by dollar-cost averaging

– funds set aside to buy a property, especially after selling off investments or another property

 

This article was first published on 13 July2020 and updated with new information.

The post Complete Guide To Cash Management Accounts In Singapore [2023 Edition] appeared first on DollarsAndSense.sg.

Contributed By: Dollars And Sense



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