This is a money question that constantly bites us. How should we better handle idle money?
What are the choices available?
If you are not an investor, keep it in bank deposits for safety. If you want higher gain as an investor, taking on higher-risk investments is unavoidable. Unfortunately, that can sometimes turn out to be too risky. See what happened to high-yield bonds like Hyflux and crypto lending deposits. Investors lost most of their money.
How about something less risky? You can go for investment-grade bonds but they come with a lock-in period. You cannot withdraw anytime you want. This is not good for active investors who do not want their funds stuck just when they need instant access to the funds to grab hold of investment opportunities. A delay may mean losing a money-making opportunity. You want liquidity in this case.
For investors like me, my preference for idle money will be something that provides adequate safety, satisfactory interest rates and liquidity.
Recently, I found something that meets the above criteria.
The interest rate for moomoo Cash Plus at this point of writing is around 2.5%^. You can withdraw ANYTIME with ZERO withdrawal fees. Moomoo SG does not charge any fees for moving funds in and out of Cash Plus.
Before putting a single cent into moomoo Cash Plus, we have to convince ourselves that it is secure enough for our money. Here is what I found to convince myself that it is secure enough for a substantial portion of my own money.
Under moomoo Cash Plus, the client can put his SGD funds into a regulated fund called Fullerton SGD Cash Fund. The fund manager (Fullerton Fund Management) is regulated by the Monetary Authority of Singapore and licensed under the SFA(Securities and Futures Act) to carry out fund management activities.
What does Fullerton SGD Cash Fund invest in?
They invest in major financial institutions such as banks. As disclosed in their latest annual report as of 31 Mar 2022, 31.45% of their investments have AAA credit rating. AAA is the safest credit rating in the world of fixed income.
You can see their holdings in the annual report. It is transparent. Basically, it is a fairly diversified portfolio of short-term debt securities belonging to major financial institutions with safe credit ratings.
In extreme cases, an investor can lose part of his principal. However, since the investments are held in a fairly diversified portfolio of investment-grade(31% AAA) financial institutions, losses are likely to be small even if it happens.
I am convinced moomoo Cash Plus is safe enough for me. You do not have to agree with me. You can do your own due diligence by downloading the fund documents and verifying the facts yourself.
I have placed a meaningful portion of my liquid funds with moomoo Cash Plus. Unfortunately for me as an existing moomoo customer, I will not be able to enjoy their latest promotion to reward new customers with up to S$60* cashback from a S$100 deposit. Fortunately, there is good news for people who have yet to sign up for a moomoo SG universal account. To get this S$60 in full, new customers have to deposit at least S$100 and keep it there for at least 30 days, earning S$2 for each day. This promotion lasts until 31Oct2022.
Personally, I do not think S$100 is a meaningful amount to deposit. I have personally transferred a far larger sum from my bank account to take advantage of the competitive interest rate in Cash Plus. As for how much, it is a sum you have to decide for yourself since everyone's financial situation is different.
One thing I like about moomoo SG compared to other brokers is that moomoo SG continues to reward existing customers with coupons* from time to time. Moomoo SG is not a broker who entices you with attractive rewards when you sign up and then stops rewarding you after you have joined. Although I am not eligible for the S$60 cashback reward for newcomers, I managed to claim S$46.43 in cash rewards from moomoo SG coupons when I deposited fresh funds into Cash Plus. Moomoo gave me a S$20 cash coupon, a $10 fund cash coupon(rewarded S$10 when I deposited at least S$200 into CashPlus) and 3 day 10% fund coupon (rewarded S$16.43 when I deposited another $20,000 into CashPlus). Having done my due diligence on Cash Plus, I do not mind transferring a large, meaningful sum of money from my bank account over to earn the competitive interest rate. My wife has recently followed me in depositing funds into Cash Plus.
Watch out for these extra cash coupons from moomoo SG after you have signed on with moomoo SG.
How to start earning returns on Moomoo Cash Plus?
If you are not yet a moomoo SG customer, go to this link and click on the claim button and sign up for an account.
After your account is set up, link your bank account via DDA so that you can deposit funds from your bank account instantly. Withdrawal from moomoo SG to the bank account is almost instant (at most a few hours based on personal experience).
Next, follow the instructions in the video below to subscribe to Moomoo Cash Plus.
An investor is not maximizing the full use of the moomoo SG universal account if he only invests in Cash Plus. What appeals to me as an investor with Moomoo is that I can have my idle funds earning money market returns while at the same time, enjoying the liquidity to grab hold of investment opportunities. A moomoo SG customer can withdraw his funds from Cash Plus and almost instantly(at most 1 day) use it to buy stocks when he spots an attractive investment.
Moomoo SG is among the more generous brokers in terms of giving out rewards to attract customers to use their platform. Why are they so generous? Because they are confident they have a good platform/product to offer to customers. If a business spends a lot on marketing but does not have a good product in the first place, the business will end up losing money because customers will try the product and stop using it. If you google around and compare the different brokers, you will realize moomoo SG is among the most price-competitive brokers available out there. If you are uncomfortable investing in the bear market environment today, you can park your idle money for the time being in moomoo Cash Plus.
It is hard to go wrong signing up for a moomoo SG universal account today, given the generous cash rewards, access to moomoo Cash Plus and good brokerage platform.
Disclosure: The link I provided contains my referral code. If you think my article has been useful, please tip me by signing up here for a moomoo SG universal account at no cost to you.
This article was written in collaboration with Moomoo. All views expressed in the article are my independent opinions. Neither moomoo Singapore nor its affiliates shall be liable for the content of the information provided. This advertisement has not been reviewed by the Monetary Authority of Singapore.
^The indicative 7-day annualized yield is derived from the past performance of money market funds on moomoo cash plus and should not be viewed as an indicator of future results.
I put my idle money with moomoo Cash Plus while waiting for investment opportunities because it offers above-average yield and can be withdrawn within days. If you are keen, please read my review and sign up if you like it.