MoneyOwl recently announced their new WiseSaver portfolio.
It provides you with an alternative to “earn higher returns with the added flexibility and liquidity to withdraw your funds whenever you need them”.
Is this cash savings plan worth your consideration? Here’s my review of what it offers.
- How Does WiseSaver Work?
- What Are WiseSaver’s Returns Like?
- What Fees Does WiseSaver Charge?
- Is WiseSaver The Product For Me?
How Does WiseSaver Work?
WiseSaver puts your money into the Fullerton SGD Cash Fund, which invests in Singapore Dollar bank deposits of local financial institutions.
WiseSaver is really liquid since there is no lock-in period.
Also, when you make a withdrawal request, your funds will be sent to your bank account within 2 business days.
The minimum amount that you have to put into WiseSaver is $100 for each one-time transaction.
You can also choose to do a regular savings plan, with a minimum of $50 per month.
You can choose to either use cash or Supplementary Retirement Scheme (SRS) funds to fund your WiseSaver portfolio.
This makes it extremely accessible for almost everyone due to the low starting amount!
To transfer money to MoneyOwl, you can either choose to do a bank transfer or a PayNow transfer by scanning their QR code.
Make sure you remember to include your designated reference code in the comments field!
You will receive an email to acknowledge that MoneyOwl has received your funds. Another email will be sent to notify you once your funds have been invested.
This makes the transfer process really transparent, so you’ll have a peace of mind to know where your money is at any point of time.
I’ve been investing with MoneyOwl via their Investment portfolio, and the funds transfer has been fast and convenient.
Once your money is invested into the fund, it will earn interest on a daily basis.
When you choose to withdraw your funds, your funds as well as the returns generated will be transferred to your bank account.
However, after clarifying with their Customer Service, the minimum amount that you can withdraw from the portfolio is $50.
If your portfolio has less than $50, you can choose to withdraw the full amount.
This makes it slightly inflexible compared to a regular savings account which has no minimum withdrawal rate.
What Are WiseSaver’s Returns Like?
At time of writing (26 June 2020), the gross yield of WiseSaver is 0.79% p.a.
Essentially, it is a very risk free product that you can put your cash in, ideal for those of you who are risk averse.
By comparing against the savings deposit rates in Singapore, the returns are much better as shown in the chart below.
What Fees Does WiseSaver Charge?
No fees are being charged by MoneyOwl.
However, there is a “0.15% p.a. fee charged by the fund manager, factored into the price of each unit”. This fee is paid directly to Fullerton Fund Management.
Comparing with similar products, WiseSaver’s expense ratio is slightly lower than StashAway Simple’s ratio of 0.205% p.a. (though StashAway Simple has a much higher yield since it invests in riskier money-market funds).
Is WiseSaver The Product For Me?
Comparing to the rates of the Singapore Savings Bonds (SSBs) in June, the yield for the 1st year is only at 0.3%.
On top of that, you require a $2 transaction fee for each redemption request.
The minimum investment for SSBs is $500 as well.
In terms of both liquidity and returns, the WiseSaver is the better alternative.
If you compare the returns of WiseSaver with the fixed deposit rates offered by banks in June 2020, WiseSaver has slightly lower returns.
This lower return for WiseSaver is a tradeoff for that increased liquidity and lower minimum sum required.
For fixed deposits, most have a minimum amount ranging from $1k to $25k.
You would have to lock up your funds for a minimum period as well, with the shortest period being 6 months.
Here’s a quick comparison against fixed deposits and SSBs.
|Minimum Sum||$100 for one-time investment, $50 for regular savings plan||Ranges from $1k – $25k||$500, and subsequent multiples of $500|
|Returns||0.79%||0.4% – 1.4%||0.3% if you withdraw after the first year|
|Withdrawal||Anytime, funds deposited within 2 business days|
Minimum withdrawal amount is $50
|Only after minimum tenure, earliest is 6 months||Anytime, funds deposited within a week to a month, $2 transaction fee for each withdrawal request|
From the table, the WiseSaver looks to be the best option among the 3.
To sum up, let’s compare the pros and cons of this product.
|Low minimum amount required to start saving, compared to fixed deposits or SSBs||Interest rate is lower compared to Standard Chartered JumpStart and SingLife Account|
|Fast and convenient transfer of funds to MoneyOwl||Fund level fee of 0.15% p.a. that is factored into the price of each unit|
|Interest rate is comparable to fixed deposits and SSBs||Returns may fluctuate in relation to market conditions|
|Relatively liquid, funds will be transferred to your bank account 2 business days after withdrawal request||Minimum amount of $50 to withdraw from account|
|No lock-in period|
|Low risk of capital loss|
|Able to use SRS funds to invest|
Ultimately, other savings accounts do provide better interest rates, such as the Standard Chartered Jumpstart Account (1% for first $20k), or the SingLife Account (2% for first $10k, 1% for next $90k).
Compared to other products such as short-term endowment funds like NTUC Income Gro Capital Ease, or universal life plans like Etiqa Elastiq, WiseSaver has much better liquidity.
WiseSaver would be a good option if you:
- Usually place your extra funds into fixed deposits or SSBs
- Wish to find a place to store your ‘warchest’ while waiting for the markets to drop to a discounted price
- Are someone who is risk averse and prefers not to invest
- Find it hard to save and want to inculcate a good saving habit
Overall, the WiseSaver portfolio is attractive for different demographics, and it’s really worth considering due to its relatively high liquidity.
Would you consider placing your funds into MoneyOwl’s WiseSaver? Leave a comment below!