Both StashAway Simple and Endowus Cash Smart have reduced their yields on their cash management products.
StashAway previously offered 1.9% projected annual returns for its Simple portfolio, but in an email to clients today, they announced that they will be reducing this yield to 1.4% starting 1 September 2020.
|Before||After (1 September 2020)|
While the underlying funds have not been performing as well, StashAway had provided rebates to maintain the projected yields of 1.9% – however, it has now deemed the rebate unsustainable.
|Before||After (21 August 2020)|
|Endowus Cash Smart Core||1.1% to 1.3%||0.9% to 1.1%|
|Endowus Cash Smart Enhanced||1.9% to 2.2%||1.7% to 2.0%|
When we look at projected yields, which are rather dynamic in nature, we must be aware that they can change according to market conditions.
With the interest rate environment staying low for the forseeable future, driven by the US Federal Reserve’s commitment to stabilize the economy through unprecented fiscal and monetary stimulus, investors looking for higher yields need to take on additional risk.
If you have less than $10K, then Singlife’s 2.5% is the most attractive option to park your money now – although it is certain to see its rates revise soon.
If you don’t need the cash for several years, then consider moving your funds to a low-risk investment portfolio (e.g. 40/60) or dollar cost average into the markets to take advantage of low rates driving higher asset prices.
See also: Where should I park my cash?