A Cash Management Account (CMA) helps streamline your finances, especially if you own multiple investment accounts. Instead of tracking and overseeing your financial position from individual funds, all are bundled up in only one account.
Unlike traditional banks, CMAs bring many benefits, such as higher interest on your cash and little to no fees regarding their banking services. There’s also a higher level of liquidity in these CMAs while banks have withdrawal limitations.
Safeguard and boost your funds by looking closely at Singapore’s best cash management accounts, their features, and how they compare to other financial institutions. By the end of this article, you’ll also learn if a CMA account is best suited for your needs.
See Also: Healthy Money Management
What Is a Cash Management Account?
A cash management account, also called cash management solutions, is a financial account structured and offered by non-banking institutions. It is a practical alternative to traditional banks and bears the same features. However, there may be a few notable limitations, risks, and differences.
Below lists the usual non-bank forms where you can open a CMA:
- Robo-advisors
- Mobile trading apps
- Online investment companies
Having a CMA, such as Endowus Cash Smart Secure and MoneyOwl WiseSaver, set up is a wise and safe choice for select people, specifically those with large funds who are looking for security without sacrificing the liquidity of their cash assets. As per the Singapore Deposit Insurance Scheme (SDIC), deposits by non-bank institutions are individually insured up to S$75,000.
Further, CMA account holders can seamlessly manage their money and make payments while earning high-interest rates. Those, without having to deal with constant service fees.
This is the usual scenario since cash management accounts are done through online-only services. Non-bank financial institutions have low overhead costs, so customers can see better returns than a typical brick-and-mortar bank.
Pros and Cons of Having a Cash Management Account
Having a Cash Management Account is a way-to-go step for people who like to keep it simple when managing their finances. Since a CMA combines the purpose of a bank account and an investment account, you can use both financial institutions, much like you’re in a one-stop shop.
If you delve deeper into it, more benefits emerge, making it even more attractive. The sections below will discuss them in detail and the disadvantages of having a CMA.
Advantages
1. Higher Interest Rates
Although some banks offer high-interest rates, they generally don’t compare to CMAs. Cash management accounts can generate up to 1.00% annual percentage yield, 11 times higher than most traditional bank accounts.
2. No Lock-in Period
Expectedly, there are no lock-in periods or restrictions when it comes to most CMA accounts. However, each institution offering a CMA account may have varying minimum and maximum withdrawal conditions.
3. Flexibility
It’s normally easy to withdraw your funds from your cash management account. Some provide you with a debit card to withdraw from ATMs or make purchases, while others provide you with a checkbook.
4. Low Minimum Deposit
Deposit requirements vary among non-bank institutions. Nonetheless, CMA holders enjoy perks, such as low minimum deposits and usually no minimum balance required. Accounts are also fee-friendly when it comes to monthly service and overdraft fees.
5. Diversification
A cash management account comes with diverse functions and purposes. Whether you’re saving up for a short-term financial goal, constantly selling or buying investments, or want to park your funds in an account that generates better interest rates, a CMA is a getting-popular option among many individuals.
Risks
1. Limited Protection
Cash management accounts generally come with low risks, typically associated with lower yields. However, this simultaneously suggests that the higher the yield, the higher the risk for account holders.
2. Fees
Some cash management accounts require holders to meet their minimum balances. You may also be subjected to obligatory monthly fees. Other charges can come in transactions, such as closing your account or transferring funds from your CMA to another bank account.
3. Market Risk
In most cases, CMA investments come in low-risk forms. However, they don’t necessarily mean they’re risk-free. Money market funds and other sorts are usually not insured by the FDIC, which means you can lose money without the possibility of recovering it.
4. No ATM Card
Not all CMA-offering institutions provide ATM cards for their account holders. That said, accessing your funds to withdraw cash at a certain period or place may be challenging. Hence, it’s advisable to go for a non-bank institution where you can receive a debit card.
5. Limited Withdrawal Options
Depending on your cash management account, the withdrawal option could be limited, such as when accessing your funds online or via a check only.
Top 7 Cash Management Accounts in Singapore for 2023
At a Glance
|
Account |
Best For | Projected Return | Management Fee | Minimum Deposit | Accepted Funding Type |
Withdrawal and Deposit Time |
|
Endowus Cash Smart Secure |
Unlimited Transfers | 3.7% to 5.3% p.a. | 0.05% per year | No min. deposit or min. balance required | Cash; SRS | 7 – 10 business days (Cash); 6 – 8 business days (SRS) |
|
MoneyOwl WiseSaver |
Better Cash Flow Control | 4.18% p.a. | 0.15% p.a. | S$10 | Cash; SRS | 2 business days |
|
FSMOne AutoSweep |
Maximized Investment Returns | 2.838% p.a. | 0.05% per quarter |
|
Cash | T + 1 business day |
|
StashAway Simple/ Simple Plus |
ETF Investments | 3.3% p.a. to 5.0% p.a. | None (0.05% p.a. after 30 June 2023 for StashAway Simple Plus) | Free from deposit requirements, withdrawal restrictions, and account balance required | Cash; SRS |
2 – 3 business days (Cash); 3 – 4 business days(SRS) |
| Syfe Cash+ | Low-Risk Investments | 3.3% p.a. | None | No min. deposit or min. balance required | Cash |
|
| Phillip Smart Park (SGD) | Generating High Interest on Excess Investments | 4.3173% p.a. | None | Maintain a balance of at least $100 | Cash; SRS |
1 business day |
| GrabInvest Earn+ Review | Diversified Portfolio Investments | 2.00% – 2.50% p.a. | 0.59% per annum | S$1 | Cash |
4 – 5 business days |
*The table shows projected net yields only
1. Endowus Cash Smart Secure – Best for Unlimited Transfers
Endowus Cash Smart Secure is managed by Singapore’s biggest fund managers, who help you earn more on your cash through their advised portfolio. This is crafted particularly for your needs. They also specialize in the short-duration bond fund and the money market.
Various perks in this cash management account are enjoyed by holders, such as having no lock-ups on top of unlimited transfers. All your funds and assets are safely held at UOB Kay Hian banking company under your name.
Further, your cash or Supplementary Retirement Scheme (SRS) is set to increase with your Endowus Cash Smart accounts through daily accrual on your interest returns. Your funds are particularly deposited in underlying funds, such as:
- Fullerton SGD Cash Fund
- LionGlobal SGD Enhanced Liquidity Fund
Key Features
- No lock-up periods
- High projected returns
- Guaranteed unlimited transfers
- Comes with three risk and return options
- Best suited for immediate and mid-term cash needs
2. MoneyOwl WiseSaver – Best for Better Cash Flow Control
MoneyOwl WiseSaver is a popular platform where you can grow your money by earning higher returns than traditional bank deposits. Like most CMAs, you’ll also be able to withdraw your funds or cash whenever you need it.
Account holders can expect benefits such as zero sales charges and zero advisory and platform fees. MoneyOwl WiseSaver wants you to experience the most out of every penny and dollar you have for optimal returns.
Regarding your savings, the trusted Fullerton Fund Management, Singapore’s largest cash fund, takes care of your assets. Like other CMAs, MoneyOwl WiseSaver also gives customers convenient access to their money without lock-up periods.
Key Features
- No lock-in periods
- Accepts cash or SRS funds for investment
- Funds are funneled to the safest cash fund in Singapore
- Requires only a minimum of S$10 to start your MoneyOwl WiseSaver account
- Only a fund-level fee of 0.15% p.a. needs to be paid. There are no other CMA fees beyond this.
Promos/Offers
- Pay using promo code TRUST for Dimensional and WiseIncome and receive 5% off public rates. Promo is valid until December 31, 2023
- Open a WiseSavers account today and get S$20 worth of WiseSaver units. Valid from February 1 to April 30, 2023, for the first 600 eligible clients.
- Receive a S$20 Grab voucher when you refer a friend.
3. FSMOne AutoSweep – Best for Maximized Investment Returns
Offered by FSMOne Fundsupermart, the FSMOne AutoSweep works by opening a brokerage account with FSMOne and going for the auto sweep account, as the name suggests.
This cash management account automatically sweeps up and invests excess cash and assets in your brokerage account. Projected returns are reasonably high. If you sweep your idle cash with FSM, you can earn higher yield in the forms of:
- Coupon
- Dividends
- And maturities and redemption proceeds
On another note, the FSMOne AutoSweep provides you with no account limit, platform fees, and sales charges. There’s also no early penalty cost nor a lock-in period, enabling you to have better control of your deposited cash management fund.
Key Features
- FSMOne is a cash-only cash management account
- Funds deposited are funneled into low-risk investments
- Takes only T + 1 business day to get your cash when you withdraw before 3 p.m.
- Invests a consolidated amount of more than S$10 in a single day into your Auto-Sweep Account.
4. StashAway Simple/ Simple Plus – Best for ETF Investments
StashAway Simple and Simple Plus is a cash management account offered by the robo-advisor, StashAway. With this CMA, holders can potentially yield 3.3% to 5.0% p.a., of which the interest is accrued and credited daily.
However, note that this projected return isn’t guaranteed and may fluctuate depending on economic conditions. The good news about opening a CMA with StashAway is that they don’t require any deposit. No management fees are also charged when you deposit.
Meanwhile, your cash flow is guaranteed seamless, enabling you to make unlimited transfers at no cost, lock-in periods, or other limitations concerning withdrawal. However, withdrawing to your personal bank account will take 2 to 3 business days for StashAway Simple account holders.
Key Features
- You can invest in cash or SRS
- Proven and reliable liquidity of cash funds
- Account start-up requires no minimum investment amount
- Comes with a projected amount of 3.3 % p.a on any amount
5. Syfe Cash+ – Best for Low-Risk Investments
Syfe Cash+ is where you can deposit your idle cash and expect great returns in just a matter of time. The projected 3.4% annual returns are accrued daily, suggesting your money can grow better with this cash management account than with traditional financial institutions.
On top of this perk, Syfe Cash+ also features no lock-in periods, 100% trailer rate rebates, zero fees, no minimum balance, plus next-day withdrawals. No brokerage or CDP account is needed to enjoy the benefits that come with this CMA.
On top of all these, clients also get access to trusted wealth experts as part of their complimentary service.
Key Features
- Daily accrual of interest from deposits
- No management fees or account minimums
- A projected return of up to 3.3% p.a. on any amount
Promos/Offers
- Use promo code TRADE20 to earn a S$20 cash bonus to buy the stock of your choice.
- Use promo code SYFEWAIVER to enjoy waived fees during the first 90-days, capped at S$20,000
6. Phillip Smart Park (SGD) – Best for Generating High Interest on Excess Investments
Looking for someone who can manage your idle cash? Phillip Smart Park Account (SGD) is an excess fund management facility that allows fast and easy online transfers and withdrawals.
It is a large retail SGD Money Market Fund where you can also generate or earn high interest on excess investments. Your deposits won’t also have lock-in periods, nor would you be charged administrative fees.
As of this writing, Phillip Smart Park (SGD) calculates that the average rate of annualized returns as updated last April 3, 2023 is SGD 2.7172% p.a. or USD 3.5523% p.a. Other investment opportunities you can take on are:
- Bonds
- Unit trust
- Savings plan
- Stocks and shares
Key Features
- No lock-up period
- Requires a minimum initial deposit of S$100 only
- The fund is available the next business day after withdrawal
- Investments are funnelled into Phillip Money Market Fund (A Class) for Singaporean Dollar and Phillip US Dollar Money Market Fund (A Class) for US Dollar
7. GrabInvest Earn+ Review – Best for Diversified Portfolio Investments
Grab Earn+ is a relatively new cash management account launched in May 2022. This low-risk investment product allows you to invest your funds in diversified cash management portfolios where returns are estimated at around 2% to 2.5% p.a.
UOB Asset Management Ltd (UOBAM) and Fullerton Fund Management (Fullerton) are the ones to manage your cash investments in Unit Trusts. Take note, however, that returns are neither guaranteed nor protected.
There are at least three investment methodologies applied at GrabInvest Earn+ Review:
- High Stability, low risk investment, low return with a maturity limit of one year or less
- A high return of around 0.3% to 3.2% per year, a high drawdown of about 2%, and a short-term maturity limit of three years or less
- Diversification of portfolio on investments where returns are higher than the previous strategies. Drawdown risks are high
Key Features
- No lock-in periods
- Investment starts at S$1
- No subscription, redemption, or management fees when you invest at Grab Earn+
- Investments are split into two funds: UOB AM United SGD Fund and Fullerton Short-Term Interest Rate Fund
Alternatives to Cash Management Accounts
There are also alternatives to cash management accounts, including Self-Service Banking (SSB), T-Bills, fixed deposits, and high savings accounts.
Learn more about these options to properly weigh which route to take when managing and maximizing your fund’s potential earnings if having a CMA is not possible.
1. Self-Service Banking
SSB might be the best option to grow your idle cash if you’re well-versed in how investments are made. You get full control of your finances without needing the help of non-banking institutions.
That said, you’ll be in charge of your transactions, such as funnelling your assets into different investment projects.
SSB is becoming popular among individuals as Zendesk reports that 69% of customers prefer dealing with issues using self-servicing options before turning to a human for help.
2. T-Bills (Treasury Bills)
T-bills are deemed one of the safest investments you can make in Singapore. However, the returns are considerably lower compared to other forms of investments.
In most cases, T-bills are a great fit for a retirement portfolio, which indicates that those nearing or in retirement should consider this investment, among others.
Nevertheless, interested investors can buy T-bills at primary auctions using SRS, cash, or CPF Investment Scheme (CPFIS) funds. Refer to the issuance calendar to check scheduled auctions.
3. Fixed Deposits
Also known as a term deposit, a fixed deposit is an investment tool for banks and non-banks. You can invest a certain sum at a predetermined interest rate for an agreed fixed period.
Since fixed deposits are available in various durations, investors can opt for short-term periods, such as every three months or as long as 7 to 10 years. You get the accumulated interest at the end of the tenure.
4. High-Interest Savings Account
A high-interest savings account generally has higher returns than the national average. In Singapore, only around 0.12% deposit interest rate is enjoyed by bank customers.
However, with a high-yield savings account, such as the easy-to-use UOB One account, you can get an interest rate of up to 7.8% p.a.
Closing
Cash management accounts can exceed what traditional banks offer. However, CMAs are not suited for everyone but for those who like keeping their funds in one spot. Further, this is preferred mostly by people comfortable banking via a banking app or online.
Key Takeaways
- A CMA allows you to access your funds while employing low-risk strategies to help it grow.
- A cash management account may have minimum balances you must meet and monthly fees.
- Cash management accounts are usually offered by financial institutions, such as brokerage firms, other than banks and credit unions.
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