Reviews, Savings

MoneyOwl WiseSaver: A Viable Alternative To SSBs?

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.

Contents

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.

Source: FSMOne

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.

Source: MoneyOwl

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.

Source: MoneyOwl

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.

Source: MoneyOwl

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.

Source: MoneyOwl

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%.

Source: MAS

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.

ProductWiseSaverFixed DepositsSSB
Offered ByMoneyOwlBanksMAS
Minimum Sum$100 for one-time investment, $50 for regular savings planRanges from $1k – $25k$500, and subsequent multiples of $500
Returns0.79%0.4% – 1.4%0.3% if you withdraw after the first year
WithdrawalAnytime, funds deposited within 2 business days

Minimum withdrawal amount is $50
Only after minimum tenure, earliest is 6 monthsAnytime, funds deposited within a week to a month, $2 transaction fee for each withdrawal request
Information is accurate as of 26 June 2020

From the table, the WiseSaver looks to be the best option among the 3.

Conclusion

To sum up, let’s compare the pros and cons of this product.

ProsCons
Low minimum amount required to start saving, compared to fixed deposits or SSBsInterest rate is lower compared to Standard Chartered JumpStart and SingLife Account
Fast and convenient transfer of funds to MoneyOwlFund level fee of 0.15% p.a. that is factored into the price of each unit
Interest rate is comparable to fixed deposits and SSBsReturns may fluctuate in relation to market conditions
Relatively liquid, funds will be transferred to your bank account 2 business days after withdrawal requestMinimum 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 (2.5% for first $10k, 1% for next $90k).

RELATED: SC JumpStart: 3 Alternatives You Can Consider

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.

RELATED: NTUC Income Gro Capital Ease Review

RELATED: Etiqa Elastiq: A Good Deal With Some Caveats

So who would the WiseSaver be a good option for?

  1. If you usually place your extra funds into fixed deposits or SSBs
  2. If you wish to find a place to store your ‘warchest’ while waiting for the markets to drop to a discounted price
  3. If you are someone who is risk averse and prefers not to invest
  4. If you 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!


Source: unDraw

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4 thoughts on “MoneyOwl WiseSaver: A Viable Alternative To SSBs?”

  1. Fullerton SGD Cash Fund is available from many other distributors. For a fair comparison, banks’ deposits are covered up to 75K and insurance policies are covered up to 500K aggregated guaranteed sum assured and 100K for aggregated guaranteed surrender value per life assured per insurer under SDIC. Money Market Funds do not enjoy SDIC’s coverage.

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    1. Thank you for the information, I did not know that. Will edit my post accordingly!

      I think that MoneyOwl adds accessibility and credibility to such funds, especially for those who are unaware of such cash management solutions.

      Like

  2. Thank you Carl for your comment. While it is true that the Fullerton Cash Fund is available via other distributors, some of them charge a platform fee. Savers should check this before committing to the Fullerton Cash Fund. MoneyOwl does not charge platform fee or advisory fee for this fund. Just for your information and like what Gideon has said, What MoneyOwl is essentially doing is to provide accessibility at the lowest cost possible.

    Liked by 1 person

    1. Thank you Chris for your clarifications. BTW are you from MoneyOwl? Fullerton Cash Fund is a MMF and I will be very surprised if any particular distributor (if you can name them) charges a platform fee for a MMF. Customers will simply go to the next distributor. Anyway the market is big enough for everyone and it is good that consumers have more choices now with more and more robo-advisors coming up with cash management solutions.

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