StashAway Simple Guaranteed – 1 Month (3.8%) To 12 (3.5%) Months Tenor Via Fixed Deposits – Beragampengetahuan

StashAway Simple Guaranteed is the first robo-advisor to offer cash management products which invest our money into fixed deposits with partnered banks to ensure that the most competitive guaranteed returns are secured for clients. Their offering has now been upgraded to provide a range of returns depending on the tenor.

When it comes to getting returns for our cash, we have plenty of options that can be confusing or even overwhelming to the general public.

Digital Banks are offering up to 2.88% with absolutely zero criteria to fulfil. From 01 April 2024, insurance coverage on bank deposits will be raised to S$100,000 per customer per bank, which is plenty for most of us.

Meanwhile, Singapore Saving Bonds are giving as high as 3.21% for the first-year interest, and they are backed by the Singapore Government. We can always redeem our bonds in exchange for the amount invested without fear of capital losses.

In comparison, Insurance Savings Plans are looking a little lacklustre, with base returns of around 2%. The surrender value of our policy is guaranteed up to $100,000, which is likely sufficient for the average population.

To me, I would consider StashAway Simple Guaranteed (up to 3.8%) to be a form of investment under Cash Management Accounts that takes a bit more risk in exchange for higher returns.

What Is StashAway Simple Guaranteed?

In a nutshell, StashAway Simple Guaranteed is a cash management portfolio, and it places your funds into a fixed deposit.

This is how Simple Guaranteed provides guaranteed returns on any amount that we put into it.

You can see the screenshots that I have taken off the StashAway mobile app, and you’ll only be apply for it via the mobile app.

When deciding to invest in StashAway Simple Guaranteed, there are a few things to take note of.

In the previous iteration of StashAway’s website, I believe it was listed that their partner bank for the underlying investment is Citibank, but it has been updated to reflect MAS-licensed and regulated banks.

I mean, there is nothing special about this since they can potentially work with more than one bank, right?

Our capital is guaranteed, but nevertheless, we do take on risk in the sense that the underlying bank could potentially collapse in a black swan event, regardless of how unlikely that could be.

The most important change is that instead of offering just a single lock-in period (which was previously 6 months), it has been improved to offer 4 different durations that give improved options to investors.

The shorter the tenor, the higher the rates.

With a product like StashAway Simple Guaranteed, there are a few advantages to choosing it over direct investment in fixed deposits with banks.

• There is no minimum investment, so we can invest as little as one dollar.
• There is less hassle since there is no need to deal with multiple banks and no need to “shop around” for the best rates.

What about the disadvantages?

• There is no option to redeem our funds early with StashAway Simple Guaranteed. A penalty such as an early withdrawal fee may be imposed for early withdrawals of fixed deposits, although we may also earn prorated interest.
• With a direct investment in fixed deposits, SDIC protects us at a per depositor, per bank basis, so our funds are safe up to $75,000. However, investments made via StashAway as a firm are also protected up to the same amount of only $75,000 and do not apply to clients on an individual basis. If anything were to happen to the underlying bank, StashAway would only be getting back $75,000, even though the total value of investments may far exceed that.

StashAway Simple Guaranteed vs. Syfe Cash+ Guaranteed

Here is an easy comparison between Stashaway Simple Guaranteed and its competing product, Syfe Cash+ Guaranteed, at one glance.

StashAway does not charge a fee for Simple Guaranteed because they already take a small spread.

The spread is the difference between the yield that StashAway gets from the bank (e.g. 3.9%) and the StashAway delivers (e.g. 3.8%) to you.

To keep things simple, just know that the rate you see (e.g. 1-month tenor 3.8%) is the rate you get.

Ending Thoughts on StashAway Simple Guaranteed

StashAway Simple Guaranteed offers investors yet another cash management option in the current high-interest rate environment.

By offering advantages and tradeoffs at the same time, StashAway Simple Guaranteed allows investors who have a smaller amount of investible cash access to the attractive rates provided by fixed deposits, but they would have to contend with the inability to make withdrawals as well as the minuscule but non-zero risk of the underlying bank going under.

The 4 different lock-in periods by StashAway StashAway Simple Guaranteed is a welcome improvement that provides us with even more options for deploying our cash.

Read also → Syfe Cash+ Guaranteed is offering a similar product, but they are only offering a 3-month term.

Disclaimer

StashAway Simple Guaranteed is not a savings account but a managed investment portfolio. Investments involve risk. Investment capital and returns are guaranteed, subject to underlying bank risk. 

Kevin started beragampengetahuan when his net worth languished at negative $25,755. His desire to turn things around led him to build passive income from investments and side hustles that pay for his daily expenses and vacations. You can learn more about Kevin here.