Dear Mr Tan,
The fixed deposit interest rate is very low at the moment (<2%). I consider parking a sum of said $30,000 in the Flex-Cash (ie Money Market Fund) as it return is stated at 3% or more.
What do think, is it a right move?
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REPLY:
The yield on Flexi Cash has also fallen in recent weeks. It should be about 2% p.a. now.
I think that it is all right to put into Flexi Cash as you have the flexibility to take it out at any time, without any penalty.
The yields of SGS
ReplyDeleteThe 3 month T bill is 2.22%
The 1 yr T bill is 2.25%
The 5 yr bond is 2.58 %
The sibor range is 2.38 to 3.44% over the last 5 months. The daily interbank rates fluctuate between 2.25 to 3% over the same period.
Depending on the mix of these instruments and other cash equivalents the money market return also moves between this range.
As what Mr. Tan advised just keep your deposit for a bit longer you will see positive return and it will outperform FDs.