StashAway Simple: 3 Things You Should Know

If you’re a StashAway investor, you might’ve received an email this morning about StashAway Simple™. I saw folks asking about it in the online personal finance circles, so here’s my short and sweet take on it.

New to StashAway? Read my StashAway review to find out what’s it all about.

StashAway Simple™ – What is It

To cut the story short, it’s a cash management fund offering from StashAway that offers a higher interest rate than conventional savings account. They offer a projected rate of 2.4% which is quite attractive for a no-minimum savings “account”. The funds are invested into Eastspring Investments Islamic Income Fund, which is a Syariah-compliant money market fund.

In this low-interest environment, 2.4% is quite commendable. You can find higher rates offered by banks via their FD promos, but these usually have lots of conditions and much higher requirement, for example deposit of at least RM5000 – RM10,000.

Does StashAway Simple™ have any fees?

Their official website states that StashAway doesn’t charge you any fees. The actual fees associated come from the underlying fund’s Total Expense Ratio (0.29%). Minus the 0.125% rebate that StashAway gets from the fund which is passed on to you, the actual expense incurred is 0.165%.

This is almost 50% lower than if you were to invest directly into the Eastspring fund yourself via unit trust platforms or agents (which also requires a whopping RM50,000 initial investment!)

Their projected return of 2.4% is already nett of this expense incurred.

StashAway Simple™ Advantages

Here are a few advantages off the top of my head:

  • No minimum deposit rule
  • No fixed tenure
  • Low barrier of entry
  • Deposit and withdraw anytime without limits
  • Hassle-free, automated deposit (if you want to)
  • Shariah-compliant

StashAway Simple™ Disadvantages

  • 2.4% returns are not guaranteed (subject to interest rate environment, credit default risk etc)
  • Returns are lower than typical money market funds
  • No PIDM protection (but the risk of losing your money is incredibly low)

StashAway Simple™ versus Money Market Funds

Since StashAway Simple is essentially a money market fund, what’s the difference between it versus, let’s say a typical money market fund available via unit trust agents or a platform?

I believe StashAway wins when it comes down to lowering the barrier for majority of Malaysians, since there is no minimum deposit rule.

The lowest initial minimum deposit I could find is RM500 for RHB Cash Management Fund 2 and Pacific Cash Fund. The rest of the local money market funds require RM1000, RM5000 and even RM50,000.

stashaway simple vs money market fund
malaySource: Fundsupermart

Besides, StashAway rebates the management fee, bringing down the expense ratio to 0.165%.

What is StashAway Simple™ good for?

This is a good option for those that cannot take advantage of higher rates offered by banks, simply because they don’t have enough to start with. Most money market funds require even higher minimum deposits which might be beyond reach for some.

StashAway Simple promises a reasonable yield and low barrier of entry. I believe it will be useful for many Malaysians to cultivate a healthy saving habit.

Personally, I’ll use StashAway Simple™ to build my emergency savings, since it’s very liquid and offers a decent yield. Since I don’t have a big chunk of spare cash lying around to put into FD, this is a good alternative for me.

In short, StashAway Simple is good for:

  • People who don’t have much savings (less than RM10,000)
  • People who are willing to take a very, very small risk (no guaranteed returns, no PIDM protection)

Key Takeaways

StashAway Simple™ can be a very attractive option if you’re looking for a relatively attractive good yield on your spare cash or emergency funds, up until you have a sizeable chunk to take advantage of much higher yields elsewhere or are willing to take on more risk for higher returns.

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