Manage Your Cash Better with StashAway Simple™

04 May 2022

We don’t take unnecessary risk on your cash. Here’s an ultra low-risk cash management portfolio with 3.7% projected annual returns

You need proper cash management to build an emergency fund or save for a short-term goal. However, most people don’t think about maximising their cash in their savings accounts. And for people who do want to maximise their cash, the banks don’t make it easy.

Traditionally, getting the best rate on your money in savings accounts, fixed deposits, or savings bonds meant navigating confusing tier structures, minimum credit card spending amounts, minimum balances, or locking up your funds for an extended period of time. We looked at those structures and knew that those restrictions weren’t necessary to deliver a good rate on a cash management product.

So, we introduced an entirely new product category to the cash management space, where you can earn a single rate on any amount without conditions or locking up your funds.

StashAway Simple™ is not a savings account; rather, it’s an ultra-low-risk investment with two underlying funds that are extremely liquid and short-term.

Key takeaways: 

  • Our cash management portfolio, StashAway Simple™, is a low-risk investment that provides a return on your cash no matter the economic environment.
  • Simple has a projected return of 3.7% p.a. on any amount, without any of the hoops that banks make you jump through to get a return on your savings.
  • We structured Simple to minimise risk: While other cash management offerings might advertise higher projected returns, they could be investing in funds that take more risk with your cash.

How does StashAway Simple™ fit into your investment plan?

Simple fits into your overall investment portfolio as a low-risk pocket of money for:

For all these purposes, you want to ensure that your funds are liquid, so you have access to them on short notice. You also want to make sure your cash isn’t overexposed to market volatility, so its value doesn’t drop just when you might need it.

Where do your funds go if you invest in StashAway Simple™?

We carefully structured StashAway Simple™ to ensure your cash faces minimal risk. Simple invests in a money market fund (MMF) and an enhanced liquidity fund (ELF).

The MMF is made up of short-term money market instruments, such as commercial bills from financial institutions, and has a maturity of 0.3 years. The ELF is made up of high-quality debt instruments, and has a maturity of 0.8 years.

Using these two funds, we’re able to provide a projected rate of 3.7% p.a. without the unnecessary hassle of fulfilling conditions such as salary deposits, credit card spends, GIRO transactions, and so on.

Does the projected rate ever change?

As StashAway Simple™ is an investment, the projected return on your investments may change due to economic conditions and central bank actions. As the MMF and ELF invest in money markets, the underlying funds are affected by Singapore’s economic health and trajectory.

Our investment team reviews Simple’s projected return with the underlying fund managers, and we update the projected rate periodically to maintain the highest possible rate within a given economic environment. We will always notify you ahead of a change in the projected rate.

Does StashAway Simple™ cost anything?

We’re charging a management fee of 0.15% p.a. for StashAway Simple, which enables us to consistently provide you with innovative investment solutions.

Moreover, the underlying funds offer rebates to the portfolio managers who buy the funds. In most cases, retail investors don’t get to enjoy this rebate. But we return 100% of the rebates back to you with Simple, so you get a better return on your cash with us. The advertised rate is always net of fees.

Why choose StashAway Simple™ over other cash management offerings?

With a growing number of cash management options out there, it’s important to realise that not all of them are created equal.

Your top priority for your cash should always be to ensure that:

  • It’s liquid
  • It isn’t overexposed to risk
  • Its value keeps up with inflation as much as possible

That’s why you should look beyond the advertised rate on an offering to also look at the funds used to structure it. While other cash management offerings might advertise higher projected returns, they could be investing in funds that take more risk with your cash.

We designed StashAway Simple™ to keep your cash secure even in the most volatile market conditions. For instance, we don’t use short-duration bond funds in Simple because their fluctuating net asset value exposes your cash to risk.

Just how low-risk is StashAway Simple™?

Risk refers to the potential value you could lose, or your downside. StashAway Simple™ is an investment, so there is a level of risk, but it’s incredibly low. We designed it to be an ultra low-risk cash management portfolio. The underlying funds of StashAway Simple™ are a money market fund and an enhanced liquidity fund (a type of ultra-short duration bond fund). We chose these funds because they both have predictably stable NAVs, which means your cash isn’t overexposed to market conditions.
In fact, StashAway Simple™ hasn’t seen a single month of negative returns since its inception in 2019, no matter the interest rate and economic environment.

For those looking for an even lower-risk option, consider exploring Simple Guaranteed. It currently earns up to a guaranteed 3.75% p.a. on any amount, no minimum, no maximum, the rate you see is the rate you get. Simple Guaranteed has no market volatility as principal and interest amounts are guaranteed, however, Simple Guaranteed is subject to underlying bank risk. By locking in your rate for a fixed tenor, ranging from one to twelve months, you can earn guaranteed returns on your investment with practically no risk.

CIO Insights Apr22-6

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