Syfe Cash+ vs Stashaway Simple vs Endowus Cash Smart: Best cash management accounts in Singapore?

With stocks and bonds all sliding in the face of higher interest rates, it seems there’s nowhere for investors to hide. But it’s not all doom and gloom. As interest rates shoot up, robo-advisers are now offering attractive rates on their cash management products.

For example, Syfe Cash+ just upped its projected return to 2.3% p.a. Stashaway Simple and Endowus Cash Smart have also adjusted their rates higher in recent weeks.

Why cash management accounts

In a rising rate environment, cash management accounts can be a good option for Singaporeans looking for a place to park their spare cash. They are more flexible compared to fixed deposits, and their projected yields will automatically increase in tandem with higher interest rates.

Here’s how cash management products offered by the main robo-advisors in Singapore compare.

The best cash management accounts in Singapore
Image: TFF. Projected returns accurate as of 27 September 2022

Is Syfe Cash+ good?

Syfe Cash+ currently offers a projected return of 2.3% per year. The projected rate has been raised three times since June, and Syfe says the rate will continue to rise as interest rates climb.

It holds two Lion Global funds:

  • LionGlobal SGD Money Market Fund (30%)
  • LionGlobal SGD Enhanced Liquidity Fund (70%)
Image: Syfe

According to a recent client note, “Syfe Cash+ has consistently delivered steady returns and was on track to achieve [its] previously projected returns”. For example, in the August – September period, the actual annualised Cash+ return met the 1.9% advertised yield.

Although past performance is no guarantee of future results, it stands to reason that as interest rates rise, investors will see their actual returns increase too.

Furthermore, Syfe noted in their email that Cash+ has never had a week of negative returns so far in 2022, making it a stable product for investors seeking a safe haven from market volatility.

Image: Syfe

What we really like is that you can get your withdrawals on the same-day, albeit capped at S$10,000. This is a feature that only Syfe is providing at the moment.

Image: Syfe

Is Stashaway Simple good?

Stashaway offers two types of cash management accounts to cater to different needs and risk tolerances. Simple is for people who want very low risk and Simple Plus is for people who don’t mind a bit of volatility for higher projected returns.

Stashaway Simple interest
Image: Stashaway

Stashaway Simple

Interestingly, the composition for Stashaway Simple is exactly the same as Syfe Cash+. Both products hold 30% of LionGlobal SGD Money Market Fund and 70% of LionGlobal SGD Enhanced Liquidity Fund.

That should mean that Simple and Cash+ have the same projected returns and the same risk level. Right now, there’s a slight difference. This could be because the projected returns for Cash+ are based on the latest yield estimates of the underlying funds for Q4 2022, while Simple is still using an older estimate. Since the yield estimates are all provided by Lion Global, Stashaway might also update their projected return in due time.

Stashaway Simple Plus

Simple Plus offers a higher projected return of 3.6% to 4.1% p.a because it holds two short duration bond funds (in bold below) that contribute to to the higher rate but also carry slightly higher risk.

Here’s the allocation:

  • LionGlobal SGD Enhanced Liquidity Fund (20%)
  • Nikko AM Shenton Short Term Bond Fund (35%)
  • LionGlobal Short Duration Bond Fund (45%)

Generally speaking, short duration bond funds tend to have higher risk and longer duration than money market funds. Although they’re still considered to be low-risk in nature, they’re more susceptible to rapid interest rate hikes. As a result, the prices of short duration bond funds can be quite volatile in the near-term.

Remember when portfolio values of many cash management products dipped during the Evergrande crisis last year? Some investors were not accustomed to seeing negative returns and panicked.

With a “higher-risk, higher return” fund like Simple Plus, it’s possible you may experience short-term volatility. If that’s not something you can stomach, or if you’re planning to only park your money for a few weeks or months, a lower-risk option like Stashaway Simple or Syfe Cash+ may be more suitable.

Is Endowus Cash Smart good?

Endowus has multiple cash management portfolios for different investors with different risk appetites.

  • Secure: Very low-risk, minimal negative returns expected
  • Enhanced: Slightly riskier than Secure, but with a higher yield due to a 50% allocation to UOB United SGD, a short duration bond fund
  • Ultra: More risky than Enhanced due to the higher allocation to short duration bond funds. Negative months can occur, but there’s a greater potential for higher yield too
Endowus Cash Smart
Image: Endowus

How Endowus Cash Smart portfolios performed

As expected, the returns for Secure have been positive and stable, given that the underlying funds are lower risk in nature.

For Enhanced, there’s a wider dispersion in performance. Returns were negative in Q1 2022, steadied in Q2 2022, and became slightly negative in August. According to an Endowus update, this was due to the performance of the United SGD Fund, which has since rebounded in September.

For Ultra, returns were negative in the first half of 2022 but experienced a healthy rebound in August. On a year-to-date basis, Ultra still has a -2.58% return as of 31 August 2022.

Image: Endowus
Image: Endowus

Which is the best cash management account in Singapore?

It really boils down to what you’re using your account for. Here’s what we think.

For short-term needs

Choose Syfe Cash+ or Endowus Cash Smart Secure if you need the cash soon within one year or less e.g. for a down payment or even as your “dry powder” for selective opportunities. Typically, your aim is to preserve capital so stable returns would be more important. A product with a higher projected yield may have more drawdowns or negative returns and you may find your portfolio value declining just when you need your cash.

P.S. We prefer Cash+ to Stashaway Simple because although they have the same allocation, you get free same-day withdrawals with Cash+.

For longer-term needs

If you’re looking for a place to park your cash for more than one year, and you’re prepared for short-term losses in exchange for higher projected returns, both Simple Plus and Endowus Cash Smart Ultra look attractive with projected returns in the 3% to 4% range.

Ultra is more diversified as it holds more funds (5) compared to Simple Plus (3). But one thing to note is that Ultra has a 12.5% allocation to the Nikko Shenton Income Fund which is relatively more exposed to Chinese bonds and Asian credit.

Image: Nikko AM Shenton Income Fund top holdings

Personally, we don’t feel too comfortable with this.

China’s real estate sector (which is currently under stress) makes up about 30% of domestic banks’ credit exposure. In the first half of 2022, China’s largest banks saw a surge in bad debts linked to real estate.

But that’s just our view. You should always choose the product that suits your own risk appetite!

Ultimately, The Frugal Fox view is that cash management accounts are an alternative to fixed deposits. As such, we prefer to take less risk with the money parked there since we’re already taking on risk elsewhere in the market through our stocks and REITs.

Thinking about placing some money with Syfe Cash+? You can open a Syfe account using our promo code FRUGALFOX. Cash+ is free to use, but if you decide to create other Syfe portfolios, our promo code will give you up to 6 months of fee waivers!

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