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If you’re looking for a safe and flexible way to invest your money, a money market fund might be just what you need.
This type of investment provides you with a stable return on your investment while ensuring your money remains easily accessible.
Sound interesting? Let’s explore the various types of money market funds available in Malaysia!
| Money market fund in Malaysia |
What is a money market fund?
A money market fund is a type of safe and flexible investment where your money is used to buy low-risk things like government bonds, treasury bills, and commercial paper.
The goal is to give you a stable return on your money while keeping it easy to access.
Why invest in a money market fund?
Investing in a money market fund is great if you want a low-risk investment that earns more than a regular savings account.
These funds invest in short-term items such bonds that don’t take long to mature (usually less than 13 months).
Because they only invest in highly rated securities, money market funds offer a high degree of safety.
Here are some reasons why people should consider investing in money market funds:
1. Low Risk
Money market funds are considered low-risk because they invest in short-term, high-quality debt securities, which are less likely to change in value compared to stocks or long-term bonds.
2. Easy Access to Funds
Money market funds offer you the ability to access your money easily since they invest in short-term securities that mature quickly, usually within 13 months.
This means you can get to your money when you need it.
3. Stable Returns
Money market funds aim to provide you with a steady return on your investment while keeping your money easily accessible.
They pay dividends based on short-term interest rates and strive to maintain a share value of RM1.00.
4. Instant Diversification
Money market funds spread your investment across various securities, giving you instant diversification.
You don’t need to select and invest in different money market securities individually, which can help protect your investment.
5. Lower Costs
Money market funds typically have lower fees compared to other types of mutual funds.
This can help you retain a larger portion of your returns.
They also give you more profit than regular savings accounts and certificates of deposit.
Types of money market funds in Malaysia
Some money market funds take the form of digital cash management apps.
Here are some examples along with their features, pros, and cons:
1. StashAway Simple
This app helps you manage your cash by investing it in safe, short-term government bonds and other low-risk assets.
You can earn up to 1.9% interest per year, and there are no fees or lock-in periods. However, the minimum investment is RM10,000.
2. Versa
This app invests your money in the Affin Hwang Enhanced Deposit Fund.
You get daily interest payouts, and you can withdraw your funds anytime without penalties. The minimum investment is RM1.
3. Touch ‘n Go eWallet GO+
This app lets you earn daily returns on your balance with no fees or lock-in periods.
You can withdraw your money whenever you want, but the interest rate is lower compared to other options.
4. KDI Save
This investment solution puts your money in high-quality Ringgit-based money market and fixed income instruments.
It offers daily returns, and there are no fees or lock-in periods.
5. Rize
Rize is a digital bank powered by Al Rajhi Bank Malaysia.
It offers a range of banking services, including deposits, transfers, and personal finance management, all without the hassle of paperwork.
These platforms are supervised by Bank Negara Malaysia and offer competitive interest rates with no lock-in periods or fees.
Conclusion
With their focus on short-term, high-quality assets, money market funds provide a safety net for your investments.
If you’re considering stepping into the world of money market funds, find platforms supervised by Bank Negara Malaysia with competitive interest rates, no lock-in periods, and zero fees.
Happy investing!
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