Comparing T-Bills and Cash Management: Why StashAway's Simple Guaranteed Shines

25 January 2024

Cash, if not managed effectively, can lose value over time due to inflation. In an unpredictable market, holding a portion of your assets in cash or cash-like instruments can act as a buffer against market volatility.

With a range of options available for cash management, it’s vital to understand the different instruments to make the most of your assets. Among these, Treasury Bills (T-Bills) and StashAway's Simple™ Guaranteed stand out as popular choices. But which one is right for you?

What Are T-Bills?

Treasury Bills, or T-bills, are a key component of short-term Singapore Government Securities (SGS), issued and backed by the Monetary Authority of Singapore (MAS). They represent a debt obligation by the Singapore government, essentially functioning as IOUs. When you invest in T-bills, you're lending money to the government with the promise that they will pay back the face value on a specified maturity date.

These instruments are sold at a discount and mature at par value, with the difference being the interest earned. T-bills are considered a safe investment option due to their government backing. They are a go-to for investors looking for security and stability in their investments, making them an essential part of building a passive income portfolio in Singapore.

Exploring StashAway's Simple™ Guaranteed

StashAway's Simple™ Guaranteed is a cash management product that differs significantly from traditional T-bills. The portfolio consists of fixed deposits with options for 1, 3, 6, or 12-month lock-in periods. This flexibility allows investors to choose a term that aligns with their liquidity needs. A standout feature of Simple™ Guaranteed is the assurance of returns on any amount invested, with rates going up to 3.8% – a potential game-changer in the realm of investing in Singapore.

Key Advantages of StashAway Simple™ Guaranteed

  • Guaranteed Rate: One of the unique selling points of StashAway Simple™ Guaranteed is the guaranteed rate of return, irrespective of the amount invested. This aspect is particularly appealing for those who are new to investing or prefer a straightforward, predictable return on their cash.
  • Stability Over Volatility: Unlike T-bills, which can fluctuate based on market conditions, StashAway Simple™ Guaranteed provides a stable return. However, it's important to note that while there's no market volatility, the returns are subject to the underlying bank's risk.
  • Zero Management Fee: For those who are cost-conscious, StashAway Simple™ Guaranteed offers a compelling advantage – no management fee. This makes it an attractive option for those looking to maximise their returns.
  • Convenience and Control: Managing your portfolio through the StashAway app adds a layer of convenience unmatched by traditional T-bills. This easy access allows investors to stay informed and make decisions on the go.

Why Choose StashAway Simple™ Guaranteed Over T-Bills?

When it comes to choosing between T-bills and StashAway Simple™ Guaranteed, it boils down to your investment goals and liquidity needs. Key to this decision is understanding two critical questions: "How much liquidity should I have?" and "How much cash should I have on hand?"

If you're looking for a straightforward, low-risk option with guaranteed returns and flexibility, StashAway’s solution might be the better fit. StashAway Simple™ Guaranteed range of lock-in periods allows you to tailor your investments according to your liquidity needs. This flexibility is particularly advantageous for those who require access to their funds at shorter intervals or those who prefer not to commit their cash for extended periods, as is often the case with T-bills.

It's especially suitable for those building a good investment portfolio in Singapore, where market stability and easy access to funds are key considerations.

Invest with StashAway Simple Guaranteed

For those ready to take their cash management to the next level, StashAway Simple™ Guaranteed offers a blend of safety, flexibility, and attractive returns. With its user-friendly app and transparent approach, it’s an excellent choice for investors in Singapore. Start your journey towards effective cash management with StashAway.

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