The Complete Guide to Money Market Funds in Singapore

In an economic landscape marked by decelerating interest rates and persistent inflationary pressure, money market funds (MMFs) have re-emerged as a cornerstone of short-term liquidity and capital preservation strategies for Singaporean investors.

As of Aug 2025, the yield on Singapore’s 6-month MAS T-bill has declined sharply to 1.77%, down from 3.7% a year ago. Meanwhile, consumer prices remain elevated, with the CPI averaging 2.4% year-on-year — above the MAS’s long-run comfort zone. 

This mismatch between nominal returns and real-world expenses has eroded the value proposition of traditional savings accounts and even fixed deposits, which now offer 1% - 2.45% depending on tenure and bank.

Against this backdrop, MMFs have gained significant traction among individual and institutional investors alike. Offering daily liquidity, low volatility, and yields ranging between 3.3% and 3.6%, MMFs present a compelling alternative to conventional cash instruments. They serve not only as a parking facility for idle capital, but also as a flexible buffer for opportunistic deployment into risk assets.

But what exactly is a money market fund — and how does it manage to deliver stability, liquidity, and yield in the current environment? While they may seem like a simple cash alternative, MMFs are carefully constructed to balance risk and return, making them a quietly powerful tool in today’s financial toolkit.

What is a money market fund? 

At its core, a Money Market Fund (MMF) is a type of unit trust that invests in short-term, high-quality, low-risk debt instruments. These typically include Singapore Government Securities (SGS), MAS Bills, statutory board paper, and investment-grade corporate debt.

Think of it as a professionally managed pool of cash. You, along with other investors, contribute to this pool. The fund manager then deploys that cash by lending to highly reliable borrowers, such as the Singapore government or blue-chip corporates. 

In return, the fund earns interest, which—after deducting a small management fee—is passed back to you as investment returns.

Investing in MMFs made simple

For everyday investors, MMFs can be accessed seamlessly through cash management products like StashAway Simple™ (for ultra-low-risk liquidity), and StashAway Simple Plus™ (for higher projected yields), making it easy to choose the right balance between certainty, flexibility, and returns.

How do money market funds work

Understanding how a money market fund (MMF) operates helps explain how it balances stability, liquidity, and yield — even in volatile markets. In Singapore, these funds are governed by strict regulations under the Monetary Authority of Singapore’s (MAS) Code on Collective Investment Schemes, ensuring they remain a low-risk cash management tool.

What your money is actually invested in

SGD-denominated MMFs do not invest in stocks or long-term bonds. Instead, they hold a basket of high-quality, short-duration debt instruments, all denominated in Singapore Dollars. Common holdings include:

• MAS Bills and Singapore Government Treasury Bills
  Short-term debt issued by the Singapore government, considered virtually risk-free.
• Deposits with eligible financial institutions
  The fund places large deposits with major banks such as DBS, OCBC, and UOB, often at negotiated rates better than what retail clients receive.
• High-grade commercial paper
  Short-term loans to financially robust corporations with strong credit ratings — carefully vetted by the fund’s investment team.

These instruments typically mature in 91 days or less, limiting both credit and interest rate risk.

The MAS rules that keep MMFs low-risk

MAS requires money market funds to comply with three key risk-limiting rules — often referred to as the “holy trinity” of MMF regulation:

These rules are designed to ensure that MMFs can meet withdrawal requests promptly — even during periods of market stress — without needing to sell assets at a loss.

How returns are distributed: the NAV mechanism

A money market fund’s Net Asset Value (NAV) reflects the price per unit of the fund. Most SGD MMFs aim to maintain a stable NAV close to S$1.00.

Here’s how it works:

• Each day, the interest earned from the fund’s investments is calculated.
• After deducting management fees, the net income is either:
• Reflected as a small uptick in the NAV (e.g. from S$1.203 to S$1.204), or
• Reinvested as fractional units in your account, depending on the platform.

Because the underlying instruments are short-term and low volatility, the NAV remains relatively stable. This is what distinguishes MMFs from unit trusts that fluctuate based on market pricing.

What is “breaking the buck” — and should you worry?

In rare instances, an MMF’s NAV can fall below S$1.00 — a situation known as “breaking the buck”. This usually only occurs during extreme financial crises, such as the 2008 collapse of Lehman Brothers, when funds holding now-worthless debt were forced to sell assets at a loss.

In Singapore, MMFs are tightly regulated, and such events have never occurred locally. The combination of short maturities, strict credit standards, and liquidity buffers helps ensure capital preservation, even under stress.

In short, money market funds work by pooling investors’ cash and lending it out — at scale — to some of the safest borrowers in the market. With tight regulatory oversight, high-quality assets, and a focus on daily liquidity, MMFs offer an elegant solution for managing idle capital with a balance of yield, flexibility, and security.

MMFs vs T-bills, fixed deposits, and HYSAs

Choosing where to park your cash in 2025 isn’t just about chasing yield — it's about balancing liquidity, capital safety, and administrative effort. 

Here’s how money market funds (MMFs) stack up against Singapore T-bills, bank fixed deposits (FDs), and high-yield savings accounts, based on the latest market data.

What this means for investors in 2025

For yield + liquidity: MMFs win

With yields above 3% and no lock-in period, MMFs provide a rare balance between return and accessibility. Unlike T-bills or FDs, you’re not tied to a fixed term — yet you still benefit from institutional-level cash deployment.

For absolute safety: T-bills or SDIC-insured deposits

If you cannot tolerate any capital loss — even theoretical — T-bills and insured bank products offer that peace of mind. But it comes with trade-offs: lower yield and less flexibility.

For convenience: MMFs beat complexity

High-yield savings accounts may advertise rates as high as 3%, but they typically require jumping through hoops — salary crediting, credit card spend, insurance bundles, etc. In contrast, MMFs are plug-and-play: just invest and let the fund work.

So what’s the smart strategy?

There’s no one-size-fits-all answer — but many savvy Singaporeans are adopting a tiered approach:

• Savings account for daily spending
• MMF for emergency funds and cash flow flexibility
• FDs or T-bills for funds you’re sure you won’t need for the next 6–12 months

In 2025’s rate environment, MMFs are increasingly becoming the default cash solution for those who want low risk, decent returns, and easy access — all without the fine print.

Best money market funds in Singapore to buy in 2025

Singapore’s money market fund landscape in 2025 is dominated by a handful of large, well-managed products that differ in cost structure, accessibility, and yield profile. 

Fund performance snapshot (as of mid-2025)

Note: Returns are indicative as of June 2025, net of fees.*Not a pure MMF — carries slightly more interest rate and credit risk.

What these funds actually invest in

While all MMFs aim to preserve capital and provide liquidity, their underlying holdings differ. Some lean heavily on bank deposits and T-bills, while others diversify into corporate bonds or short-term rate securities. Understanding this composition helps you match the fund to your risk tolerance and liquidity needs.

This makes clear that not all MMFs are built the same. For example, Fullerton and United Funds stick closely to bank deposits and T-bills, while Phillip and Lion SavePlus take on slightly more instruments, adding diversification but also marginally higher complexity. Meanwhile, LionGlobal SGD MMF and Nikko STBF include more bonds and rate securities, which explains their yield differences.

Pros and cons of money market funds

No financial product is perfect. Understanding both the benefits and limitations of money market funds (MMFs) is essential to making an informed decision.

The pros — why MMFs are attractive

• Higher yields than savings accounts
  In 2025, most SGD MMFs return 3.0%–3.3% p.a., far outpacing the 0.05%–0.30% from regular bank savings accounts.
• High liquidity
  Funds are typically accessible within T+1 to T+3 business days, with no penalties — unlike fixed deposits or T-bills.
• Low risk profile
  MAS rules ensure diversification across short-term, high-quality debt from governments, banks, and corporates.
• Simplicity and convenience
  No need for salary credit, card spend, or tiered requirements. Returns accumulate automatically.
• Diversification
  Exposure is spread across multiple issuers, reducing the impact of any single borrower’s default.

The cons — what to be aware of

• Not capital guaranteed
  While losses are rare, MMFs are not guaranteed by the fund manager or government.
• Not SDIC-insured
  MMFs are investments, not deposits, and are not covered under the SDIC’s S$100,000 deposit protection.
• Variable returns
  Yields fluctuate daily with short-term market rates; MAS rate cuts will lower returns.
• Expense ratios
  Annual fees (TER ~0.15%–0.45%) are deducted from returns and can erode yield.
• Redemption time lag
  Although liquid, access is not instant — withdrawals take 1–3 business days.

How to buy money market funds in Singapore

Investing in a money market fund (MMF) in 2025 is straightforward, but the process differs depending on the channel you choose. Below are the main routes, their advantages, and step-by-step instructions.

1. Cash management accounts via Robo Advisors and other investment platforms

The fastest-growing channel. These platforms bundle MMFs into cash management products with simple onboarding and transparent tracking. They are especially popular with retail investors and beginners.

These bundle MMFs into ready-made cash management products. They’re the easiest way for retail investors to start.

Pros: User-friendly setup, very low minimums (as low as S$1), bundled for best performance.

Cons: Limited choice of underlying funds, some charge extra platform fees.

2. Online brokerages and fund platforms (for more control)

For investors who want to choose the exact MMF, brokerages and fund supermarkets offer direct access. You decide which fund to buy, review its factsheet, and place orders just like any other unit trust.

Pros: More transparency and choice, possible to mix multiple MMFs, often no wrapper fees.

Cons: Requires more research on which funds to invest.

3. Direct from fund houses (least common)

It is also possible to subscribe directly with fund managers such as Fullerton, LionGlobal, or Nikko AM. This approach is usually taken by institutional investors or high-net-worth individuals who meet higher minimums.

Pros: Direct relationship with the fund house, potential access to institutional share classes with lower TER.

Cons: Higher minimum investments, paperwork-heavy, less convenient for retail investors.

Decoding the fine print: costs, taxes, and withdrawal rules in Singapore

Before you invest in money market funds (MMFs), it’s vital to understand the "fine print" that affects your net returns and access to your money.

A. Costs and Fees

Total Expense Ratio (TER):

• What it is: An annual fee (usually 0.15%–0.45%) that covers the fund manager’s salary, operational costs, administrative expenses, and trustee fees.
• How it’s charged: Deducted directly from the fund’s assets on a daily basis. You don’t pay separately—the returns quoted are already net of fees.
• Why it matters: Over time, even small fee differences compound. For example, on a S$10,000 investment, a 0.30% difference in fees = S$30 per year.

Platform fees:

• Robo-advisors may either bake in fees into the projected return or levy a transparent platform fee (e.g., Syfe charges ~0.35% p.a. for certain portfolios).
• Brokerages (e.g., FSMOne) typically don’t charge ongoing platform fees for MMFs, but may impose transaction-related fees.

Takeaway: Always compare not just the fund TER but also the platform’s fee structure, as both affect your net return.

B. Taxes

For Singapore-based individual investors, the tax treatment is refreshingly simple:

• Capital gains: Not taxable.
• Dividends and distributions: Not taxable.
• Withholding tax: None for local MMFs.

✅ The return you see quoted by MMFs is exactly what you get credited—no additional tax reporting required.

C. Withdrawal (Redemption) Rules

Liquidity is one of the main appeals of MMFs, but redemption timelines differ across funds and platforms.

Key timelines:

• "T" = the day you submit your withdrawal request (before cut-off, usually ~11am–12pm).
• T+1 (next business day): Common on platforms like FSMOne’s Auto-Sweep. Request on Monday → funds on Tuesday.
• T+2 to T+3: More standard across many robo-advisors and banks. Request on Monday → funds on Wednesday or Thursday.
• T+0 (same day): Certain platforms like Syfe offer partial quick withdrawal if requested early.

Example scenarios:

• T+1: Fastest settlement outside of same-day options.
• T+2/T+3: Normal settlement for most institutional MMFs.
• T+0: Limited and typically capped (e.g., up to a certain % of your balance).

Always check before investing: Redemption timelines vary depending on (a) the underlying fund, and (b) whether you’re investing via a brokerage, robo-advisor, or bank platform.

Busting the myths: Risks and common misconceptions about MMFs

Money market funds (MMFs) are designed to be among the safest investment vehicles available, but low-risk is not the same as no-risk. Misunderstanding this distinction can leave investors unprepared. Let’s clear up the most common myths.

Myth 1: “MMFs are the same as fixed deposits. My money is guaranteed.”

Reality: This is the most dangerous misconception. Unlike fixed deposits (FDs), MMFs are investment products, not bank deposits. Your capital is not guaranteed. While extremely rare under Singapore’s MAS-regulated framework, an MMF can technically “break the buck” — meaning its net asset value (NAV) falls below S$1.00 per unit. Robust regulations and conservative fund management practices make this highly unlikely for well-managed SGD MMFs, but the risk exists.

Myth 2: “The return is fixed, like an FD.”

Reality: MMF yields are variable and fluctuate with market interest rates. The 1-year return figure you see in a factsheet is historical performance, not a guaranteed forward return. If interest rates fall, so will your MMF yield; if rates rise, the yield rises as well.

Myth 3: “Since it’s so safe, there are no risks.”

Reality: MMFs carry risks, even if they are relatively low:

• Interest Rate Risk: When MAS lowers short-term rates, the yields on MMFs drop quickly, sometimes within days or weeks. Your income stream can decline faster than expected.
• Credit Risk: MMFs invest in short-term debt issued by banks, corporates, and government-linked entities. Although funds diversify across many high-quality issuers, the possibility of a default—however small—can never be eliminated.

Myth 4: “It’s covered by SDIC insurance.”

Reality: MMFs are not covered by the Singapore Deposit Insurance Corporation (SDIC). SDIC protection applies only to bank deposits like savings accounts and fixed deposits. With MMFs, your assets are instead held in custody by an independent trustee, legally segregated from the fund manager’s balance sheet. This provides a strong safeguard in the unlikely event the manager fails, but it does not guarantee the value of your investment.

Frequently asked questions (FAQs) about Singapore MMFs

Q1: What is the absolute minimum amount I can invest in an MMF?
It varies by platform, but it’s generally very low. Many robo-advisors and brokerages let you start with as little as S$1, making MMFs highly accessible even for first-time investors.

Q2: Can I lose money in a money market fund?
Theoretically, yes. MMFs are investment products, not guaranteed deposits. However, for well-diversified SGD MMFs managed by established firms under MAS regulation, the risk of loss has historically been extremely close to zero in Singapore.

Q3: How often are the returns paid out?
Returns accrue daily but are not paid out as cash dividends. Instead, they are automatically reinvested. Depending on the fund structure, this shows up either as a gradual increase in NAV (price per unit) or as an increase in the number of units you hold.

Q4: Is an MMF the same as a cash management account from a robo-advisor?
Not exactly. A cash management account (e.g., Syfe Cash+ or Endowus Cash Smart) is the wrapper product offered by the platform. Inside that wrapper, the platform allocates your money into one or more MMFs (and sometimes short-duration bond funds). The MMF is the underlying instrument generating returns.

Q5: If I need the money on a weekend, can I get it?
No. Redemptions are processed only on business days. If you place a withdrawal request on a Friday afternoon, it will typically be processed the following Monday. Plan ahead if you need cash over a weekend or public holiday.

Q6: Why is the yield on my MMF different from my friend’s?
Yields differ due to factors like:

• Different fund providers (e.g., Fullerton vs. LionGlobal) with different portfolios.
• Different fee structures, as expense ratios affect net yield.
• Some platforms pass back trailer fee rebates (extra yield to you), while others don’t.

Are money market funds a smart move for your cash in 2025?

After a comprehensive review of yields, risks, and accessibility, the conclusion is clear:

For Singaporeans in 2025, navigating an environment of moderating interest rates and relatively low inflation, money market funds (MMFs) are not just a smart move — they are becoming an essential tool for cash management.

MMFs elegantly solve today’s saver’s dilemma: how to earn an inflation-beating return on cash without the volatility of equities or the lock-in of fixed deposits. With yields in the 3–3.5% range (and higher for enhanced funds), they provide meaningful income while preserving liquidity for emergencies, opportunities, or upcoming expenses.

That said, MMFs are not a substitute for SDIC-insured bank deposits if your top priority is absolute capital protection. Instead, they represent a powerful complement — an upgrade for emergency funds, short-term savings, and even as a holding zone for your investment “war chest.”

Thanks to robo-advisors, online brokerages, and digital banks, MMFs — once reserved for institutions — are now available to anyone starting with as little as S$1. This democratization makes them one of the most practical, low-risk ways to keep cash working harder in 2025.

MMFs are made for today's savers and StashAway makes saving effortless. Enjoy competitive yields, daily liquidity and the simplicity of starting with no minimum deposit amount.

Earn up to 2.75 p.a. with StashAway Simple™ and up to 4.9 p.a. with StashAway Simple™ Plus while retaining easy access to your funds.

StashAway Simple™ 

Earn a projected 2.75 p.a. at ultra-low risk with no minimum or maximum deposit amount, no lock-ins, no cap on earnings and low fees. 

StashAway Simple™ Plus

Earn 4.9% p.a. YTM on any amount with no lock-ins, no cap on earning, and low fees. 

By understanding the mechanics, comparing the top contenders, and staying mindful of the modest risks, investors can confidently put MMFs to work — ensuring that cash is no longer a sleeping asset but an active contributor to long-term financial well-being.