Both Simple and Simple Plus are cash management portfolios. Both have no minimum balance, no cap on the balance that can earn returns, no investment, insurance, or salary requirements, and no restrictions on withdrawals or transfers.
However, there are some fundamental differences between the two portfolios.
Projected rate: Simple offers a projected rate of 3.3% p.a., in contrast to Simple Plus that earns a projected 4.6-5.0% p.a. However, the “high risk, high return” applies to cash management portfolios, too.
Risk: Both Simple and Simple Plus are ultra-low risk. However, Simple Plus carries slightly more risk in comparison to Simple. This is because it exposes the investor to a slightly higher level risk in order to seek slightly higher returns. What does this “slightly higher risk” mean for an investor? Well, in the span of a year, there is the potential for brief periods of slightly negative returns in the short term, and the same can be said for brief periods of exceptional returns (exceptional for cash management options, of course). Read more on the comparison of the risk of the two portfolios here.
Recommended holding period: How long you want to keep your cash in Simple is entirely up to you, be it a day, a month or a year. However, with Simple Plus, there’s the potential for brief periods of slightly negative (and positive!) returns in the short term, therefore to reap the full benefit of the rate while keeping risk in check, we do recommend a holding period of at least 12 months. Read more about why here.
Management fees: Both Simple and Simple Plus are free. Simple Plus will have a management fee of 0.05% p.a. after June 2023.