Cash is an important component of any portfolio. It forms the bedrock of your emergency funds and short-term savings goals. It can also play a role in your investments by buffering against volatility and giving you the flexibility to buy more assets during market dips.
Yet, in today’s ultra-low interest rate environment, it is increasingly difficult to earn a decent yield on your cash savings. To jumpstart an economy battered by the COVID-19 pandemic, the US Federal Reserve has cut interest rates to near zero and has committed to keeping rates low for the foreseeable future. Banks worldwide have followed suit and many local banks have revised their interest rates lower in recent months.
Even “high-yield” savings accounts have not been spared. The reward after meeting multiple income and transaction requirements is a razor-thin yield of around 0.05% to 1.0% per annum (assuming you fulfill one income and two category transactions below $30,000 on the popular DBS Multiplier account, and applicable only on the first $50,000 balance in the account).
While fixed deposits may offer slightly better rates than savings accounts (around 0.4% to 1.3% p.a.), you cannot withdraw your cash before maturity or a penalty may be imposed.
Make your savings work harder with 1.5% p.a.
With these constraints in mind, we built our cash management account, Syfe Cash+, to enable all Singaporeans to grow their savings while still enjoying full access to their funds.
The Syfe Cash+ portfolio delivers a projected rate of 1.5% per annum on any amount, and has no lock-up period or limits. Unlike high-yield savings accounts, there is no need to meet any qualifying criteria such as salary credits and / or credit card minimum spends just to earn “higher” interest.
There are no limits to how much cash you can place in your Cash+ account as well. As mentioned, the projected rate of 1.5% per annum applies on all your deposits. This is not the case for most high-yield accounts. Banks typically cap the amount that can earn high interest – any amount beyond $75,000 generally earns only the base interest rate of 0.05%.
What’s more, there are no Syfe management fees charged for the Cash+ portfolio. This means you get to keep all that you earn on your cash savings.
The funds within Cash+
Syfe Cash+ holds three funds: a money market fund (MMF), an enhanced liquidity fund (ELF), and a short duration bond fund as follows.
LionGlobal SGD Money Market Fund (30% allocation)
- Investments in high quality short-term money market instruments such as commercial bills and deposits with financial institutions.
LionGlobal SGD Enhanced Liquidity Fund (35% allocation)
- Investments in high quality debt instruments that have a weighted average portfolio credit rating of A- and a weighted average duration of around 12 months
LionGlobal Short Duration Bond Fund (35% allocation)
- Investments in Singapore and international bonds, and other high quality interest rate securities with a weighted duration of 1.98 years and a weighted yield to maturity of 2.37% (as of 31 December 2020)
The funds chosen hold only short-term debt instruments issued by high-quality issuers such as the Singapore government or corporations with high credit ratings. As such, these funds are considered safe and extremely low-risk.
Using these three funds, we’re able to provide a projected return of 1.5% per annum. This rate is net of all fund expense ratios. Furthermore, we have worked with LionGlobal to secure lower fund expense ratios than what retail investors generally pay.
Any rebates we receive from LionGlobal will also be credited back to you. Such rebates typically go straight to brokerage platforms that you buy the fund from. However, in order to serve your best interest, Syfe will credit the full rebate back to you.
Given that Syfe charges you no fees for using the platform, all these mean that you get to earn more on every dollar deposited with Syfe Cash+.
Is Cash+ suitable for you?
Cash+ is not a bank savings account. Rather, it is a diversified portfolio of money market and short duration bond funds. As such, you can think of it as a very low risk investment that protects your savings from inflation and gives you higher yield than what you can get from traditional bank deposits.
Whether you’re building up your emergency cushion, saving for an upcoming big purchase, or setting aside funds for a dollar-cost averaging strategy into Syfe’s investment portfolios, Cash+ is the smarter home for your hard-earned money.
Here’s how it stacks up compared to other cash management solutions in the market.
You can easily make a deposit or a withdrawal through Syfe’s platform as many times as you prefer. Transfers are free and unlimited and there are no lock-up periods to worry about. What’s more, you’ll earn the projected return of 1.5% per annum on any amount of cash you deposit.
No longer satisfied with jumping through hoops and hurdles to earn tiered interest rates on your savings account? Or want to break free from the long lock-up periods and early withdrawal penalties that fixed deposits impose? Park your savings in Syfe Cash+ instead.
Anyone can open a Cash+ account. You don’t need to invest with us to create an account. Simply sign up here to get started. If you use MyInfo, completing your sign up takes less than 5 minutes!
If you’re an existing Syfe customer, simply log in to your account and click on “Add Portfolio” to create your Cash+ account. You won’t be charged any Syfe management fees for Cash+.