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Malaysians with flexible rate loans like home mortgages have been facing the impact of higher OPR’s set by BNM over the last year.
But there’s an upside to that too. Because interest rates are higher, money market funds are also paying more on the cash we deposit.
What are money market funds?
They’re essentially mutual funds. The same ones many Malaysians invest in from the likes of Public Mutual.
The major difference is that money market funds only invest in highly liquid, short-term instruments with low risk and volatility.
They don’t put your cash in stocks, commodities, or crypto. Those are too volatile.
People invest in money market funds looking to protect their cash while generating higher returns than a standard bank account would provide.
It’s usually for short or medium term cash needs. For example, you could use money market funds as a sinking fund to save up for a holiday next year.
If you put it in stocks, returns might be negative by the time you want to withdraw it so instead of going to London you’d have to settle for Lendu.
Alright now that we’ve gotten that out of the way, let’s go into the 4 options for Malaysians to consider.
1. Versa Cash
Shariah-compliance
Versa Cash has 2 products – conventional and shariah-compliant. The conventional one has Affin Hwang Enhanced Deposit Fund as the underlying fund.
For investors who want shariah-compliance, go for Versa Cash-i with Affin Hwang Aiiman Enhanced i-Profit Fund as the underlying fund.
Returns
Right now, Versa offers the highest rate among the other money market funds in the market @ 4.3%.
However, it’s important to note that this is a promotion which could end at any time. For now, there’s no end date for it.
The promotion gives you 4.3% for investments up to RM30k each in Versa Cash and Versa Cash-i.
Any amount beyond that will give you their base returns which is 3.82% for Versa Cash and 3.28% for Versa Cash-i as of August 2023
Payouts are made on a monthly basis.
Withdrawal speed
Withdrawal will arrive in your bank account within the next business day if you initiate it before 3pm.
If you do it after 3pm, you’ll have to wait an additional day.
I’ve done this myself recently and have to say they’re extremely fast with withdrawals.
For Versa Cash-i, you can even get the cash within the same day if you submit the request before 10:30am on a working day.
Invest in Versa here or used my code 99KFHLDR so we both get RM10 when you deposit RM100
2. Stashaway Simple
Shariah compliance
Unlike their other investment portfolios, Stashaway Simple is shariah-compliant with the underlying fund being Eastspring Investment Islamic Income Fund.
Returns
Stashaway Simple used to offer the highest profit rate but recently reduced it to 3.8%.
However, this number is projected and it can go higher or lower depending on the state of the economy and overnight interest rates.
Their returns come in the form of capital appreciation (underlying fund goes up in price), dividends, and fee rebates.
Dividends are paid on a monthly basis while fee rebates seem to come a bit more randomly.
Withdrawal speeds
Stashaway Simple is kinda slow with their withdrawals – their website states it takes 3-4 business days.
The last time I withdrew was in July and it did take around that long for the cash to reach my bank account.
Invest in Stashaway here to get 50% off management fees for 6 months
3. KDI Save
Shariah compliance
No. KDI Save is the only one on this list that currently isn’t Shariah-compliant. The underlying fund is not mentioned, but it’s probably managed by Kenanga.
Returns
KDI Save decided to make our lives difficult by showing an effective annual rate of returns rather than a simple rate.
I won’t get into the details of trying to explain this, but effective annual rate essentially takes into effect compounding.
So when trying to compare with the others, KDI’s rate would be slightly lower than what they show here. The difference will be pretty small though so I guess you can take it as is.
Anyway, KDI Save is offering a tiered based reward of up to 4% per annum for investments up to RM50k.
The next RM150k will net you 3.5% while everything above that will give the base rate of 3%.
Like Versa, they indicate this as a promotion but do not have an end date.
Similarly, they both also offer “guaranteed” rates vs Stashaway which is projected.
Withdrawal speeds
According to their website, withdrawals will take 1-2 business days before it appears in your bank account.
Their cut-off time is earlier than Versa’s at 11am so if you do it before then, it should arrive within the next business day.
Invest with KDI here or use my code 100109 and we’ll both get RM10 when you invest RM250 in KDI Invest
4. TNG Go+
Shariah compliance
Yes, the underlying fund is Principal e-Cash.
Returns
Out of all the money market funds listed here, Tng Go+ has the lowest return rate with a projection of 3.45% p.a.
Unlike the other funds though, Tng Go+ pays you the earnings on a daily basis instead of monthly.
It should total up to similar amounts at the end of the day but its fun to see daily earnings coming into your investments.
Also, this is also the only product out of the list with a maximum investment cap which is set at RM9,500.
Withdrawal speed
Even though returns are the lowest, the main reason Tng Go+ is different from the others is that it offers instant liquidity.
It’s linked to your Tng e-wallet and you can access the cash immediately.
For example, if you make payments it’ll just move cash from your Go+ to your e-wallet instantly to settle the payment.
You can also decide to transfer cash to your bank account via Duitnow just like any other bank, so that’s instant too.
This is the only reason I use Tng Go+. It’s useful for any very short-term cash needs whereas the other products require a few days to get the money.
Conclusion
So those are your options to generate some extra returns on your idle cash.
I use every single one of them for different purposes because I like separating my funds, but also because I’m kind of a finance nerd.
Choose which ones suit you the best, they all have their pros and cons.
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