Both Simple and Simple Plus are cash management portfolios, so by default are considered ultra-low risk investments.
Simple Plus has a higher projected rate than Simple, however also carries slightly more 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).
Just as any investment, if the money (liquidity) is needed fairly soon, then a lower risk option may be more fitting. And with longer time horizons, investors can afford to weather some ups and downs given that the long-term trajectory of the fund is upwards. That’s why we recommend holding your cash in Simple Plus for at least 12 months. So when comparing Simple and Simple Plus, it’s important not only to look at the rate, but also the recommended time horizon.
You can read about the types of underlying funds in different cash management options and their associated risks here.