Syfe Cash+ Guaranteed Review – 3.8% guaranteed yield, Better Buy than T-Bills, Fixed Deposit, and Singapore Savings Bonds? 

In this era of competitive rates, there is constant talk on how to optimize your cash holdings.

Tired of switching banks to unlock higher rates for your money?

Enter Syfe Cash+ Guaranteed.

Syfe Cash+ Guaranteed pays a guaranteed rate of 3.8% p.a. on cash.

With no minimum funding amount.

Is it a good buy? Let’s find out more below!

This article is sponsored by Syfe. All views and opinions expressed here are from Financial Horse.

What is Syfe Cash+ Guaranteed?

Cash+ Guaranteed is Syfe’s latest cash management solution that offers a guaranteed return rate of 3.8% p.a. with a lock-in period of 3 months.

Syfe’s existing product (previously named Cash+), is similar but different.

The difference is that the existing Syfe Cash+ has no lock up period, but the return is not fixed.

Whereas the new Syfe Cash+ Guaranteed, as its name implies, guarantees the 3.8% return.

But there is a 3 month lockup period.

The differences are summarised in the table below:

Source: Syfe, updated as of 28 August 2023

How does Syfe get 3.8% p.a. on your savings?

How does Syfe Cash+ Guaranteed work?

Simply put – Syfe will take your funds, and invest it in fixed deposit products provided by MAS-regulated banks.

According to Syfe, they are able to secure competitive rates as a financial institution, to make it available to retail investors.

Their current bank provider is HSBC – but Syfe regularly reviews fixed deposit rates from several bank providers in order to provide optimised rates.

This helps you save the hassle of having to keep switching banks in order to access higher rates.

The rates will be refreshed on a regular basis.

But as long as you lock in the rates on purchase – they are guaranteed for the 3 month lock-in period.

Do note that Syfe Cash+ Guaranteed is not SDIC insured or backed by the Singapore government, so it is technically not risk free.

The risk you are taking on here is the risk that the bank (where the fixed deposits are placed) goes under, which is admittedly a small risk. 

Does Syfe charge any management fees?

Syfe does not charge any upfront management fees on Cash+ Guaranteed.

The 3.8% is guaranteed.

Syfe explains that the way they earn money is that they take the difference between the rate that the bank offers, and the rate offered to you (3.8%). In other words, from the rate Syfe obtains from their partner bank, they take a slight margin.

Once you lock-in the rate, your Cash+ Guaranteed portfolio is assured to provide returns at the same rate.

Whatever headline number you see when you purchase Syfe Cash+ Guaranteed, that is the return that you will get.

Key Benefits of Cash+ Guaranteed

The way I see it, there’s 3 key benefits of Syfe Cash+ Guaranteed:

• Access returns of 3.8% with no hoops to jump through
• Optimised rates from MAS-regulated banks
• No minimum funding, and no maximum limit

Access returns of 3.8% with no hoops to jump through

Investors can get guaranteed returns of 3.8% p.a. with a lock-in period of 3 months. 

Unlike high-yield savings accounts, there is no qualifying criteria such as salary credit or minimum credit card spending to earn a higher returns.

You just put the money in, and get the return.

Optimised rates from MAS-regulated banks

You also have the option to auto-reinvest your funds on maturity, to enjoy the magic of compounding.

Without having to switch around banks, and constantly compare and contrast best rates.

You guys know the pain.

Putting all your money into GXS Bank, only for them to slash the interest rates a week later.

Or putting your money in a UOB Fixed Deposit, only to have to move it out upon maturity to another bank.

With Syfe Cash+ Guaranteed, you basically outsource the heavy lifting to Syfe, and get them to find the competitive rates for you.

No minimum funding, and no maximum limit

On top of that, there is no maximum or minimum amount you can put into Syfe Cash+ Guaranteed.

This is a great benefit to bank fixed deposits, which usually have both a minimum and maximum amount on the amount that can earn the higher interest rate.

Syfe Cash+ Guaranteed compared vs Fixed Deposit, Singapore Savings Bonds and T-Bills

I’ve set out a table below summarising the key features and pros/cons of each instrument.

Let’s discuss each in further detail below.

Syfe Cash+ Guaranteed vs. T-Bills

Latest T-Bills are paying 3.75% for 6 months which is very close to Syfe Cash+.

With T-Bills you need to wait for the auction to come around (which means lost opportunity cost).

You also need to bother with bidding mechanics, and there is always a risk you don’t get any allotment with a competitive bid.

So 3.8% for 3 months is a pretty decent alternative. 

Syfe Cash+ Guaranteed vs. Fixed Deposit

The best fixed deposit rates today is 3.55% with CIMB for 9 months.

3.80% for 3 months with Syfe Cash+ Guaranteed is definitely competitive with those rates.

In fact you’ll note that CIMB is only paying 3.35% for 6 months, so at the shorter duration Syfe Cash+ Guaranteed looks even more attractive.

Syfe Cash+ Guaranteed vs. Singapore Savings Bonds

For what it’s worth, Singapore Savings Bonds are quite a different investment because they lock in the interest rates for up to 10 years.

Short end rates at 3.01% are definitely on the lower side compared to Syfe Cash+ Guaranteed’s 3.80% though.

That’s just the inevitable effect of the inverted yield curve we have currently – where short rates are much higher than long rates.

Would I buy Syfe Cash+ Guaranteed?

I quite like Syfe Cash+ Guaranteed to be honest.

The main products before these have been Fixed Deposit, Singapore Savings Bonds, and T-Bills.

Syfe Cash+ brings in a very different value offering to the mix.

In that it gives you institutional level fixed deposit rates, at a 3 month duration.

The rates are definitely competitive with other options on the market.

And the 3 month duration – there’s no real competing product out there at this duration.

Yes, there is a little bit of risk in the sense that this is technically not SDIC insured.

But it’s basically a similar risk to what you’re taking on when you buy a money market fund like Fullerton SGD Cash fund for example. The underlying funds are placed in a fixed deposit with a bank, so the risk you are taking on is the risk that the bank goes under.

In any case, I leave it for investors to decide for themselves if Syfe Cash+ Guaranteed has a place in their portfolio.

Syfe Promo Code

Interested in Syfe Cash+ Guaranteed?

Use promo code “FINANCIALHORSE” to enjoy a S$20 cash bonus when you fund a minimum of S$10,000 to your Cash+ Guaranteed portfolio.

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

Remember to apply the promo code “FINANCIALHORSE” before funding your account.

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

Terms & Conditions apply. 

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Disclaimers

Cash+ Guaranteed is a managed investment portfolio. Investments involve risk. Investment capital and returns are guaranteed if held for 3 months, subject to underlying bank risk.

Full disclaimers are available at www.syfe.com.This advertisement has not been reviewed by the Monetary Authority of Singapore.

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