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-   -   Is Money Market Fund suitable for newbies? (https://forums.hardwarezone.com.sg/money-mind-210/money-market-fund-suitable-newbies-5901619.html)

Golden_Fox 14-09-2018 05:10 PM

Is Money Market Fund suitable for newbies?
 
I don't know anything about investing. If just put money into MMF, can?

Anything to take note?

BBCWatcher 14-09-2018 05:21 PM

Quote:

Originally Posted by Golden_Fox (Post 116503733)
If just put money into MMF, can?

Of course you could, but what are you trying to accomplish?

A money market fund is typically designed as a short-term holding place for dollars that you will shortly invest in something else. It's low yielding, reasonably safe (with some variations), and highly liquid. It's not a consumer bank account (to support day-to-day spending)(*), and it's not designed for medium-term or long-term savings.

(*) Exception: In the United States some banks and credit unions advertise "money market accounts." "Money market" is really just a marketing term in that context, with the implication (but not necessarily reality) that the account might offer slightly better interest. A U.S. bank/credit union money market account is, in fact, just another savings or checking (current) account.

Golden_Fox 14-09-2018 06:35 PM

How about Singapore MMF such as Phillip SGD MMF?

BBCWatcher 14-09-2018 06:48 PM

Quote:

Originally Posted by Golden_Fox (Post 116505004)
How about Singapore MMF such as Phillip SGD MMF?

Yes, that's a money market fund, and I'll reprint the description: a money market fund is designed as a short-term holding place for dollars that you will shortly invest in something else.

MikeDirnt78 14-09-2018 08:40 PM

The returns are lower because of the management fees.

I suggest you consider accounts like Citibank Maxigain, DBS Multiplier, UOB One, OCBC360, BOC Smartsaver, etc if you have not utilised any of them.

final1 15-09-2018 11:20 AM

Quote:

Originally Posted by Golden_Fox (Post 116503733)
I don't know anything about investing. If just put money into MMF, can?

Anything to take note?

The easiest MMF to put money is the one offered by POEMS.
If you do put in, you would get about 1% per annum (variable).
Its a safe place to put your money and i would sleep well at night putting money in there. The returns are, of course, low.
You just transfer money to the account and its automatically allocated to the MMF. You don't need to do anything else.

However, you can also get 1% interest rate at CIMB Fastsaver. So, its up to you which you prefer.

BBCWatcher 15-09-2018 06:36 PM

Quote:

Originally Posted by final1 (Post 116513903)
However, you can also get 1% interest rate at CIMB Fastsaver.

Not exactly. FastSaver pays 1% only on balances ranging from $1,000 to $50,000. On the portion of the balance above $50,000 it’s 0.6%. If the balance falls below $1,000 it’s 0%.

StarSaver flattens the interest rate to 0.8% level, minimum $1,000 balance.

But none of that really matters, because the money market fund at POEMS isn’t for that. It’s exactly what it’s advertised to be: a place to park short-term money that’s awaiting investment into something else. An ordinary consumer bank account is designed to support day-to-day spending. They’re both highly liquid places to store short-term money, but they serve different purposes.

....So, I’ll repeat the question I asked all the way at the beginning: what is Golden_Fox trying to accomplish?

Golden_Fox 15-09-2018 07:09 PM

I'm just simply looking for a method that fulfil these 3
1) earn higher returns (as compared to banks)
2) less risky and requires less knowledge and monitoring (as compared to stocks)
3) less complex and more liquidity (as compared to Unit Trust, Endowement and whatever so-called saving plans that insurance companies are selling)

Sauzan 15-09-2018 09:51 PM

Quote:

Originally Posted by Golden_Fox (Post 116520630)
I'm just simply looking for a method that fulfil these 3
1) earn higher returns (as compared to banks)
2) less risky and requires less knowledge and monitoring (as compared to stocks)
3) less complex and more liquidity (as compared to Unit Trust, Endowement and whatever so-called saving plans that insurance companies are selling)

You should consider SSB then.

BBCWatcher 15-09-2018 11:07 PM

Quote:

Originally Posted by Golden_Fox (Post 116520630)
I'm just simply looking for a method that fulfil these 3
1) earn higher returns (as compared to banks)

That's not too hard.

Quote:

2) less risky and requires less knowledge and monitoring (as compared to stocks)
Individual stocks do require significant knowledge and monitoring. Appropriate stock funds do not. VWRD or IWDA, which are global stock index funds, are really simple, as examples.

Quote:

3) less complex and more liquidity (as compared to Unit Trust, Endowement and whatever so-called saving plans that insurance companies are selling)
I'm not sure why liquidity is a requirement. Why is it? But, that said, most unit trusts are liquid because you can redeem them any business day and get the proceeds within a couple days. Many insurance products are highly liquid. They often have defined surrender values. So I'm really not sure what you mean here. Could you clarify?

What do you want to do with this money? Use it for a wedding party 2 years from now? Or use it for retirement 30 years from now? What's your life objective?

vince123123 16-09-2018 04:44 PM

SSB or high interest deposit accounts would be better?

Golden_Fox 16-09-2018 05:12 PM

Thanks for the recommendation. Will take a look at SSB.

Golden_Fox 16-09-2018 05:15 PM

Quote:

Originally Posted by BBCWatcher (Post 116524825)
I'm not sure why liquidity is a requirement. Why is it? But, that said, most unit trusts are liquid because you can redeem them any business day and get the proceeds within a couple days. Many insurance products are highly liquid. They often have defined surrender values. So I'm really not sure what you mean here. Could you clarify?

The unit trust I bought was from AIA. Endowment is from Great Eastern.

Perhaps both are easy to get back the money but that's like less than 40% of my investment cost. If I want to get back 100%, I will have to wait for them to mature.

Thus, I consider them as low liquidity.

JuniorLion 16-09-2018 06:06 PM

Quote:

Originally Posted by Golden_Fox (Post 116520630)
I'm just simply looking for a method that fulfil these 3
1) earn higher returns (as compared to banks)
2) less risky and requires less knowledge and monitoring (as compared to stocks)
3) less complex and more liquidity (as compared to Unit Trust, Endowement and whatever so-called saving plans that insurance companies are selling)

Citi Maxigain starts you off at 1.2% and will step up 0.1% each month if you don't do any withdrawal. After 12 months, it will be around 2.4%, which is better than most bank accounts. It's also highly liquid, the caveat is that your interest will drop to base level (1.2% or 1.8%) if you do any withdrawal within that month (I'll not explain here). Do a google for the full explanation, and it's quite self-explanatory.

Golden_Fox 16-09-2018 08:59 PM

Quote:

Originally Posted by JuniorLion (Post 116536226)
Citi Maxigain starts you off at 1.2% and will step up 0.1% each month if you don't do any withdrawal. After 12 months, it will be around 2.4%, which is better than most bank accounts. It's also highly liquid, the caveat is that your interest will drop to base level (1.2% or 1.8%) if you do any withdrawal within that month (I'll not explain here). Do a google for the full explanation, and it's quite self-explanatory.

Nice! 1.2 is already more than most banks.


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