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Syfe Cash+ Guaranteed raised to 3.8% p.a. Better than T-bills and fixed deposits?

07 Nov 2023

Syfe Cash+ Guaranteed recently raised the guaranteed return offered to investors to 3.8% per annum. We compare Syfe Cash+ Guaranteed with T-bills and fixed deposits to find out if it's worth considering.

syfe cash plus guaranteed vs tbill fixed deposit

In this article

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This post was created in partnership with Syfe. All views and opinions expressed in this article are Beansprout's objective and professional opinions.

What happened?

Recently, we saw that Singapore banks have been raising their fixed deposit rates.

The interest rates on savings accounts and T-bills have also been elevated, as the Fed has signaled that interest rates may stay higher for longer.

We also noticed that there are more products allowing investors to park their savings and allowing their make savings to work harder. 

For example, Syfe Cash+ Guaranteed recently raised the guaranteed return offered to investors to 3.8% per annum.

Some investors in the Beansprout community started asking us if we could share our thoughts on how Syfe Cash+ Guaranteed compares to T-bills and fixed deposits. 

As such, we decided to dive deeper to find out if it is worthwhile putting our money into Syfe Cash+ Guaranteed. 

What’s Syfe Cash+ Guaranteed?

Syfe Cash+ Guaranteed is the latest cash management solution offered by Syfe. As its name suggests, it offers investors guaranteed returns for their idle cash. 

In a nutshell, these are the key features of Syfe Cash+ Guaranteed:

  • Guaranteed returns of 3.8% per annum
  • Optimised rates from MAS-regulated banks
  • Invest any amount with no hoops, caps or fees
  • 3-month term with flexibility to re-invest
syfe cash+ guaranteed
Source: Syfe

#1 – Guaranteed returns at 3.8% p.a.

Syfe Cash+ Guaranteed offers a guaranteed return of 3.8% per annum for a term of 3 months as of 25th October 2023. 

How is Syfe able to guarantee the return of 3.8% per annum? They would invest your funds into fixed deposits products provided by banks in Singapore. Currently, the funds are put into fixed deposits with HSBC. 

Naturally, you would wonder why is Syfe able to get a higher fixed deposit rate compared to us going directly to the bank.

This is because it is able to secure competitive rates as a financial institution, and it is making it available to us as a retail investor.

In addition, Syfe will regularly review fixed deposit rates from several bank providers to offer you an optimised rate. 

This means that you would not have to constantly check which is the best fixed deposit rate and switch banks to access the higher rates. 

Cash+ Guaranteed launched at 3.7% p.a. in August 2023 and has since updated its return to 3.8% p.a.

#2 – Three-month term with flexibility to reinvest

When you put your money into Syfe Cash+ Guaranteed, you will lock-in the guaranteed return of 3.8% p.a. for 3 months. 

This means that it will remain unchanged throughout the entire 3 month period. 

At the same time, it also means that you cannot withdraw your funds before the 3-month lock-in period has ended. 

If you deposit S$100,000 into Syfe Cash+ Guaranteed, you would receive S$937 of returns in 3 months, and S$3,854 of returns in 1 year.

You might be wondering why we would receive S$3,854 in returns in 1-year rather than S$3,800, if the return is 3.8% per annum.

This is because with the short term of 3 months, you can re-invest your returns and leverage on the power of compounding. 

In fact, Syfe Cash+ Guaranteed has an auto-reinvesting function which makes it convenient for you to re-invest your funds automatically on the next business day. 

syfe cash+ guaranteed return 3.8
Source: Syfe as of 7 November 2023

#3 – Invest any amount with no hoops, caps or fees

There is no minimum and maximum investment amount for Syfe Cash+ Guaranteed. This means that you can earn the guaranteed return of 3.8% per annum with as little as S$1. 

In addition, you do not have to fulfill any criteria to receive the guaranteed return of 3.8% per annum. 

Lastly, there is no management fee for the Syfe Cash+ Guaranteed, and the 3.8% per annum is the net return you will receive for your investment. 

You might be wondering what would Syfe be earning from Syfe Cash+ Guaranteed. They will already be making a slight margin from the guaranteed return of 3.8% p.a. offered, as the rate they have obtained from its partner bank may be higher than 3.8% p.a. 

What are the risks of Syfe Cash+ Guaranteed?

#1 – Syfe Cash+ Guaranteed is not SDIC insured 

One of the questions we have frequently received is whether the funds in Syfe Cash+ Guaranteed are covered under the Singapore Deposit Insurance Corporation (SDIC).

It is important to note that the SDIC coverage will not be applicable to you as an individual client. 

This is because only the bank account used by Syfe to manage the funds is insured by the SDIC for up to S$75,000. 

However, it might be helpful to know that Syfe invests the funds into fixed deposits products provided by MAS-regulated banks in Singapore.

You can learn more about how Syfe keeps your funds in Cash+ Guaranteed safe here

How does Syfe Cash+ Guaranteed compare with fixed deposits?

Syfe Cash+ Guaranteed’s return of 3.8% p.a. for a term of 3 months is higher than the best 3-month fixed deposit rate of 3.58% as of 2nd November 2023.

The return of 3.8% p.a. is also higher than the best 6-month and 12-month fixed deposit rate of 3.6% as of 2nd November 2023.

Compared to putting your savings directly into fixed deposits with a bank, Syfe Cash+ Guaranteed is not insured by the SDIC. 

However, we are able to get an optimized return with Syfe Cash+ Guaranteed without having to transfer our funds to another bank to access better rates upon maturity of the funds.

Lastly, fixed deposit accounts typically require a minimum deposit of S$500 and above. However, there is no minimum investment required for Syfe Cash+ Guaranteed.

 

3-month Fixed deposit

Syfe Cash+ Guaranteed

UnderlyingBank fixed deposit (Direct)Fixed deposit (via HSBC)
Return rateBest 3-month fixed deposit rate of 3.58% as of 2 November 2023Guaranteed return of 3.8%
SDIC insuredInsured by SDIC up to S$75,000 per depositorNo
Minimum deposit Minimum deposit typically at least S$500No minimum investment
MechanismBest fixed deposit rate may change with time and savers may have to transfer funds between banksSyfe will regularly review fixed deposit rates from several bank providers to offer you an optimised rate

How does Syfe Cash+ Guaranteed compare with T-bills?

The cut-off yield on the 3-month MAS note was 4.11% in a recent auction on 17th October 2023. However, retail investors are not able to participate in the auction for the 3-month MAS note.

Looking at the 6-month Singapore T-bill, the cut-off yield was 3.87% in the auction on 19th October 2023. 

However, the minimum investment in the Singapore T-bill is S$1,000.

In addition, we will not be able to find out the expected cut-off yield for the T-bill before the auction, as the actual yield will depend on the applications received. 

6-month T-bill

Syfe Cash+ Guaranteed

Backed by the Singapore GovernmentSyfe invests into fixed deposits products provided by MAS-licensed banks in Singapore
Tenure of 6 monthsTenure of 3 months
Yield of 3.87% in the auction on 19th OctGuaranteed return of 3.8%
Yield is uncertain before auctionYield is locked-in
Minimum investment of S$1,000No minimum investment

How does Syfe Cash+ Guaranteed compare with savings accounts?

Syfe Cash+ Guaranteed’s return of 3.8% p.a. is higher the interest rate offered by no-frills savings accounts, which are currently offering an effective interest rate of up to 3.5% as of 25th October 2023.

However, Syfe Cash+ Guaranteed is not insured under the SDIC. In addition, your funds in Syfe Cash+ Guaranteed will be locked-in for three months and you will not be able to withdraw them at short notice for emergency use.

While some savings accounts offer effective interest rates that are higher, they typically require you to fulfill certain conditions such as salary deposit or credit card spend. 

On the other hand, there are no hoops you will have to jump through to earn the guaranteed return of 3.8% p.a. on Syfe Cash+ Guaranteed.

Savings account

Syfe Cash+ Guaranteed

Effective interest rate of up to 3.5% for no-frills savings accountGuaranteed return of 3.8%
Effective interest rate of up to 7.88% if certain requirements such as salary deposit and credit card spend are metDo not have to jump through hoops
Highly liquid and can be withdrawn anytimeLock-in for 3 months
Insured by SDIC up to S$75,000 per depositorSDIC coverage will not be applicable to individual clients. 

How does Syfe Cash+ Guaranteed compare with cash management accounts?

Cash management accounts such as the Syfe Cash+ Flexi also aim to offer higher potential returns compared to savings accounts.

Cash management accounts offer more flexibility compared to Syfe Cash+ Guaranteed as there are no lock-in periods, and you can withdraw your fund anytime. 

However, the returns on cash management accounts can fluctuate depending on market conditions, unlike the returns on Syfe Cash+ Guaranteed which are guaranteed. 

Cash management accounts

Syfe Cash+ Guaranteed

Return fluctuates depending on market conditionsGuaranteed return of 3.8%
Highly liquid and can be withdrawn anytimeLock-in for 3 months

What would Beansprout do?

We’re happy to see more options available for investors who are looking to make their savings work harder. 

Syfe Cash+ Guaranteed is an option to consider if you are keen to earn a guaranteed interest of 3.8% p.a. on your savings over a 3-month period, above the best fixed deposit rate. 

At the same, you would not have to switch between banks when looking for higher interest rates, as Syfe will regularly review fixed deposit rates from several bank providers to offer you an optimised rate. 

Syfe Cash+ Guaranteed is not covered by SDIC, but Syfe lowers the risks by investing in fixed deposits with banks regulated by the MAS. 

If you’re interested to sign up for Syfe Cash+ Guaranteed, sign up with the promo code BEANSPROUT to enjoy a $20 cash bonus* when you fund a minimum of $10,000 to your Cash+ Guaranteed portfolio. 

Learn more about Syfe Cash+ Guaranteed here. 

Webinar - Singapore REITs vs Dividends

Important Information

*Sign up promotion terms & conditions:

- This promotion is applicable for new to Syfe customers only, and is valid until 30 November 2023.

- Remember to apply the promo code before funding your account.

- The S$20 cash bonus will only be credited into your Cash+ Guaranteed portfolio at the end of the 3-month maturity.

This advertisement has not been reviewed by the Monetary Authority of Singapore. 

Any information provided in this article is meant purely for informational and investor education purposes, and should not be relied upon as financial or investment advice, or advice on corporate finance.

The information provided in this article are on an “as is” and “as available” basis without warranty of any kind, whether express or implied. Beansprout does not recommend any particular course of action in relation to any investment product or class of investment products. No information is presented with the intention to induce any person to buy, sell, or hold a particular investment product or class of investment products.

You may wish to seek advice from a financial adviser before making a commitment to purchase the product; and in the event that you choose not to seek advice from a financial adviser, you should consider whether the product in question is suitable for you.

The information provided herein may contain projections or other forward looking statements regarding future events or future performance of countries, assets, markets or companies. Actual events or results may differ materially. Past performance figures are not necessarily indicative of future or likely performance.

Please refer to the Syfe Pte Ltd (“Syfe”)’s website for more information on the full T&Cs and disclaimers.

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