Cash Management Accounts in Singapore: Complete [2021] Guide
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Complete Guide to Cash Management Accounts in Singapore

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best cash management accounts singapore

In this day and age, earning an income with some kind of investment is totally normal. This simply means that you are looking for ways to get high liquidity and good returns in order to save up for your emergency fund.

With many kinds of financial institutions around, one of the most common ones in Singapore is cash management accounts.

Now, if you look up the internet for opening a cash management account in Singapore, you will find a number of them!

So, how do you know which one is the best for you and will help you earn returns? If these are some of the questions you have in mind, this post will help clear your doubts.

Welcome to the complete guide to cash management accounts in Singapore!

What are Cash Management Accounts, and How Do They Work?

Cash management accounts work in a similar manner as regular saving accounts opened with banks.

The difference being that you open these accounts with financial institutions other than banks.

These could be investment platforms or brokerage firms. These accounts provide you with an investing component yet allowing you the flexibility to make withdrawals at any time.

The way it works is quite simple. Just like any other bank account, all you need to do is deposit some money into your cash management account. It will then automatically help you earn money through low-risk investment.

However, these low-risk investments are usually slightly higher risk than the ones from your regular savings account with a bank, which can translate to higher returns for you.

What to Look Out for When Choosing Cash Management Accounts?

Although it may not be entirely necessary to open a cash management account, it can be a great help when it comes to growing your assets!

Moreover, one of the best parts is that most cash management accounts have zero monthly fees or require a small amount only.

So, if you decide to open a cash management account, you are probably thinking about growing your money.

With such a vast number of options available for you when it comes to opening your account, you may get confused. With that in mind, here are 2 important things to look out for when choosing cash management accounts:

First of all, you will have to take note that since a cash management account is essentially an investment, your account will not be protected by the Singapore Deposit Insurance Scheme (SDIC).

Hence, like all investments, there is some risk to having a cash management account even though it is relatively low.

Secondly, always do your own due diligence and check for things such as fees (from the fund and account provider), minimum initial deposit value, and minimum balance amounts.

This way you can be sure that you are able to fulfil the criteria and maintain the account in the longer run. You can also try to understand the underlying fund of each provider’s cash management, such as the type of fund it is so that you have a good understanding of what you are entering into.

If all these prove to be too complicated for you, you can always opt to seek advice from a trusted financial advisor.

Advantages of Cash Management Accounts

Now, how about reading up on some of the advantages of cash management accounts? This way, you will be able to know what you’re dealing with here!

Setting up is easy

Once you have an account of your own with the respective provider, you can easily create your account online. With quick, simple, and easy steps, it won’t take you more than five minutes for account creation.

Cash management is automatic

Once you open your account, the cash management becomes automatic. This means that you’ll be looking at maximising your profits with minimal effort!

All you have to do is make a deposit via online/mobile banking and everything’s done!

Ability to use money from your Supplementary Retirement Scheme (SRS) account

In Singapore, you are able to use your SRS account to fund certain cash management accounts instead of your own cash.

By doing this, you can earn some interest while getting tax relief, effectively killing two birds with one stone!

Disadvantages of Cash Management Accounts

Cash management accounts also come with some disadvantages. Some of these are:

Not entirely risk-free

Even though cash management accounts are low-risk investments, they are still investments.

There will always be the element of risk in any investment, and cash management accounts are no exception.

These accounts are not backed by large financial institutions or the SDIC.

Low returns

Cash management accounts although investments, have low returns. If you’re looking to achieve high returns, this is not for you.

This is more of a higher risk (and returns) savings account.

You may have to pay some fees

Some cash management accounts may require you to pay a monthly fee or maintain a minimum balance. In some cases, you may also have to pay a small fee while transferring your money to a bank account.

Best Cash Management Accounts in Singapore

Now that you know in detail what a cash management account is and how it works, let’s look at a thorough comparison of the different cash management accounts being offered in Singapore.

  Projected Returns Min. balance Min. Initial Deposit Sources of Funding (Cash/SRS) Withdrawal time (Roughly)  Underlying Funds Fees
Syfe Cash+ 1.5% p.a. Cash 2-3 working days -30% LionGlobal SGD Money Market Fund

-35% LionGlobal SGD Enhanced Liquidity Fund SGD

-35% LionGlobal Short Duration Bond Fund

-Fund Fees
StashAway Simple 1.2% p.a. Cash, SRS 3-4 working days -50% LionGlobal SGD Money Market fund

-50% LionGlobal SGD Enhanced Liquidity Fund SGD

-Fund Fees
FSMOne AutoSweep 0.583% p.a. (As at 17 August 21) $50 Cash 2 working days -55% LionGlobal New Wealth Series (LionGlobal SGD Enhanced Liquidity I Acc SGD)

-25% Fullerton SGD Cash Fund A SGD

-20% Cash

-Management Fee: 0.05% per quarter

-Fund Fees

MoneyOwl Wisesaver 0.42% p.a. (5-day Moving Average as at 6 August 2021) $10 Cash, SRS 1-2 working days -100% Fullerton SGD Cash Fund -Fund Fees
Endowus Cash Smart Core 0.7% to 0.8% p.a. (As at August 2021) $1000 Cash, SRS 6 working days -50% Fullerton SGD Cash Fund

-50% LionGlobal SGD Enhanced Liquidity

-Endowus Access Fee: 0.05% p.a.

– Fund Fees

Endowus Cash Smart Enhanced 1.1% to 1.3% p.a (As at August 2021). $1000 Cash, SRS 6 working days -50% UOB United SGD Fund

-50% LionGlobal SGD Enhanced Liquidity

-Endowus Access Fee: 0.05% p.a.

– Fund Fees

Endowus Cash Smart Ultra 1.9% to 2.1% p.a. (As at August 2021) $1000 Cash, SRS 6 working days -27.5% LionGlobal SGD Enhanced Liquidity Fund

-25% Fullerton Short Term Interest Rate Fund

-25% LionGlobal Short Duration Bond Fund

-12.5% Nikko AM Shenton Income Fund

-10% PIMCO GIS Low Duration Income Fund

-Endowus Access Fee: 0.05% p.a.

– Fund Fees

Philip Smart Park (SGD) 0.1469% p.a. (Based on 1-year rolling return, NAV/NAV prices) $100 Cash 1-2 working days -100% Phillip Money Market Fund -Fund Fees
Philip Smart Park (USD) 0.1446%p.a.(Based on 1-year rolling return, NAV/NAV price) $100 Cash 1-2 working days -100% Phillip Money Market Fund -Fund Fees

From the above table, we have summarised cash management accounts based on the commonly searched criteria.

  • Best Projected Returns: Endowus Cash Smart Ultra.
  • No minimum initial deposit:  StashAway Simple, Syfe Cash+.
  • Quickest Withdrawal Time: Philip Smart Park (SGD), Philip Smart Park (USD), MoneyOwl Wisesaver.
  • No provider fee: StashAway Simple, Syfe Cash+, MoneyOwl Wisesaver, Philip Smart Park (SGD), Philip Smart Park (USD).
  • Ability to use SRS Funds: StashAway Simple, MoneyOwl Wisesaver, Endowus Cash Smart Core, Endowus Cash Smart Enhanced, Endowus Cash Smart Ultra.
  • Ability to trade funds: FSMOne AutoSweep
  • Safest Underlying Fund: MoneyOwl Wisesaver

 

Best Overall Cash Management Account: Syfe Cash+

This cash management account platform was only introduced in early 2021 and is already very popular among investors.

This platform allows for a return of 1.5%, which is relatively high as compared to most returns offered by others!

Both StashAway and Syfe Cash+ have similarities, with the only difference being that the latter allows for more bond exposure.

Furthermore, the Syfe Cash+ requires no minimum initial deposit and no minimum balance – giving it the best cash management account title as it provides a balanced offering.

Best For Quick Withdrawals & Deposits: MoneyOwl WiseSaver

When it comes to quick withdrawals or deposits, MoneyOwl WiseSaver is the clear winner as they are only fully invested in Fullerton SGD Cash Fund.

You will also find that there are no charges of advisory fees, sales fees, or platform fees.

Best With No Minimum Deposits: Syfe Cash+

When you are looking for a cash management account that does not have a minimum deposit, Syfe Cash+ is the one for you!

Apart from the fact that it does not charge any management fee, it is estimated to earn an interest of 1.5% every year.

Best For SRS Funds: Endowus Cash Smart

If your goal is to invest with your SRS funds, Endowus Cash Smart will be the perfect cash management account for you. Being the first robo advisor, Endowus provides you with three Cash Smart accounts. These are:

Ultra account

One of the riskiest among the Endowus Cash Smart accounts, the Ultra portfolio has returns of 1.9% to 2.1% annually.

With a small chargeable fee included, you can deposit your funds, which will then be channelled into different funds, like Nikko Shenton Fund, and LionGlobal Short Duration Fund.

Although this account is one of the riskiest among cash management accounts, you can maximise your yield with a lower weighted duration.

Despite the risks associated with Endowus as a whole, the statistics in April 2021 have shown that it has outperformed its projected yield. It has also allowed for returns at 4.19% since its launch!

Enhanced account

This is the second-riskiest among the Endowus accounts, with projected returns between 1.10% and 1.30% annually.

So, the higher you take the risk, the higher your returns will be. This account also charges the same minimum fee as Endowus Ultra.

The 2 portfolios to which your find will be channelled are UOB AM United SGD Fund and LionGlobal SGD Enhanced Liquidity.

Core account

The core account, which provides returns between 0.8% and 1% annually. With the Endowus Cash Smart Core, you can expect returns between 0.70% and 0.80% annually.

In case you do not already have an account here, you will have to make an initial investment of $1,000. However, the good news is that when it comes to receiving interests, there is no limit!

Also, you don’t have to maintain any minimum balance in this account. When it comes to transactions, it is unlimited, with the minimum transaction being $100.

With the Endowus Cash Smart Core account, you can start investing with your SRS funds or cash.

You will find that there is a small management fee of 0.05% for all of the above 3 options.

Best For FSMOne Investors: FSMOne Auto-Sweep

With many online brokerage accounts, FSMOne is one of the most popular ones in Singapore.

If you’re using FSMOne, this account is the best you could opt for as it sweeps your idle cash to dividends, bond maturities, sale proceeds, and coupons right into your account.

This discretionary portfolio helps in preserving your capital while allowing for higher returns.

When you have the Auto-Sweep account, you can get access to other features, like insurance products, stocks on various major markets, global and local funds, and mutual and global unit trust funds.

With Auto-Sweep, it is also possible to purchase bonds and stocks with the funds available in your account.

Conclusion

Now that you have gained insight into the best cash management accounts, you are all ready to start saving!

No matter which account you opt for, it all depends on the risk you are willing to take and the reason why you want these funds in your account.

All in all, cash management accounts will help you a great deal in doubling your savings. It is also one of the easiest ways to get into the investing world, especially when you have robo advisors!

If you’re looking to invest or want ideas on how to invest your savings, talk to a financial advisor so that you don’t make the wrong choice.

Disclaimer: Each article written obtained its information from reliable sources and should be purely used for informational purposes only. The information provided by Singapore Financial Planners and its affiliated parties is not meant to be construed as financial advice. Singapore Financial Planners shall not be held liable for any inaccuracies, mistakes, omissions, and losses incurred should you act upon any information listed on this website. We recommend readers to seek financial planning advice from qualified financial advisors. 

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