Friday, October 2, 2009
Savings Account Options
Check out the UOB UNITED SGD FUND.
It’s actually a Money Market Bond funds. Though everyday the price might not go up (stagnant) or increase by only 0.1cents (yes less than 1 cent), but the overall performance is much better than your Savings account or FD.
For the last month alone it has increase about 1%. If per annum it’s 12% (direct multiplication) or rather 10% (based on the past year return)
And it’s a fund with 0% sales charge (in FSM), so no losing of money.
It’s also flexible where you can sell as & when you want, unlike FD where you are bonded for specific number of months/years.
Once you sold it off, within 2~3 working days, your cash will be available in your bank account.
Currently I treat it as my Savings account. For any extra/unused cash, I park it here.
The only advantage that the Savings/FD has over this fund, is that it has no Deposit Insurance – where Government guarantee you for $20k.
But based on the returns and the spread (check out the factsheet in the link below) throughout the world and sectors, think we can be assured that it’s safe. Click here to view the factsheet.
But of course, for any funds there's always a risk where the funds can drop below the purchase price.
For this fund to drop, think it can only be caused by 3 main reasons:
1) The Country/Company/Bank default - bankrupt. But majority bonds held are in SG.
2) Too many people buying this fund. The profit not enough to share :)
3) Bonds interest rates which can fluctuate - Not expert in this area though
Note: These are only my views. I'm no expert nor hold any CFA.