Is StashAway Simple a good/safe place for savings instead of traditional banks?

StashAway Simple can be put simply as a non-guaranteed high-interest yielding cash management portfolio. The forecasted 1.8% yield is non-guaranteed and is simply a projected yield.

The holdings of StashAway Simple is 50% in LionGlobal SGD Money Market Fund and 50% in LionGlobal SGD Enhanced Liquidity Fund SGD Class I Acc. Money market funds in Singapore invest in short-term fixed income instruments like bonds that will typically mature in less than a year(e.g 3 to 6 months). Therefore, they are more liquid than bonds which mature much later and also more liquid than fixed deposits which will lock-in your funds for say 1 year.

As far as default risk is concerned, money market funds in Singapore which StashAway Simple's underlying portfolio is invested in has no FX exposure(therefore impossible to have exposure to countries with low credit rating) as everything is denominated in SGD. The instruments are also very short-term which significantly reduces the default risk.

If you were to compare StashAway Simple with traditional Fixed Deposits, you will realise that StashAway stands out because of its liquid nature. There is also no management fees when you park your money in StashAway Simple.

In summary, I would highly recommend StashAway Simple if you are comparing it to fixed deposits.​​​