Recently, I’ve been struggling on where to save money for a house down payment. This is typically not a huge problem if you have regular CPF contributions, but I am in a unique situation where my default CPF contribution is really low. Unfortunately, CPF does not allow specific top-ups into Ordinary Account (OA), you can only top-up to either Special Account (SA), MediSave Account (MA), or do a general CPF top-up. I believe that if this changes, the best solution for my situation might be to top-up directly to CPF OA. Since this is not possible, I decided to look into alternative short term cash solutions.
By short term I mean anything less than 5 years. If you need the money within this time frame it is not advisable to put it into risky assets, like stocks and even longer duration bonds.
This short post is not a deep dive into the best funds available (although many of them are pretty great). It is a more big picture look at the possible solutions out there.
The solutions I consider here are also not meant to make your investment portfolio “safer” (except bonds which can play a role in a standard portfolio). I don’t believe you should be sitting at the side with a pile of cash waiting to buy the dip—enough studies and articles are out there saying market timing does not work. Instead, these solutions are for specific financial goals, where you know quite certainly the amount you need to save and the rough time you need it by. Examples could be: down payment, wedding, vacation, university enrolment, etc.
With all that out of the way, here are the possible solutions.
- High Yield Savings Account (HYSA)
- Money Market Funds (MMF)
- (Ultra) Short term bond funds
- Target maturity bond funds
- Fixed deposits and SG Gov securities
- Bottom line
High Yield Savings Account (HYSA)
I’m not one to hunt for the best deals, so I won’t give you a comprehensive report on the best accounts. I personally value simplicity a lot. If I have to rack my brain every month to hit the interest criteria that’s an immediate disqualification for me. I also don’t invest with the bank and don’t plan to, so any bonuses from that I would not count. I am not sure about the insurance products banks offer, but unless they are exceptional I plan to get insurance separately too.
| Account | Criteria | Interest (p.a) |
|---|---|---|
| UOB One | Spend $500 and Credit $1600 salary/ 3 GIRO transactions | 1.5% – 2.5% Caps out at $150k |
| Standard Chartered Bonu$aver | Spend $1000 and Credit $3000 salary | 3.05% |
I use UOB One because I can’t hit the requirements for Standard Chartered Bonu$aver.
Pros:
- Up to $100k of your capital is insured when keeping money with banks
- Maximum liquidity; it functions as a spending account after all
- As risk-free as it can get
Cons:
- Many have caps at around $150k—above that you don’t earn much interest
- Some criteria for added interest are annoying
- Lower risk tends to have lower yield
Money Market Funds (MMF)
There are MMFs offered directly from IBKR, but they tend to have either incredibly high fees, require enormous minimum investments, or are open to institutional investors only.
A better way to get access to MMFs is through a robo-advisor like Endowus, which has quite good access to these at institutional price:
| Funds on Endowus (SG assets) | Yields (p.a) |
|---|---|
| Fullerton SGD Cash Fund | ~1.73% |
| UOBAM United SGD Money Market Fund | ~1.31% |
| LionGlobal SGD Money Market Fund | ~2.34% |
| All cash management has 0.15% expenses |
All yields use the reported gross yield by the fund.
Additionally, their Cash Smart portfolio allows you to mix some short term bond funds with some of these MMFs at the same cost (0.15%). I personally like these solutions, you might even consider using them as a separate savings account. Just plan your finances at least a week in advance in case there are delays from redeeming shares.
Other brokers also offer money market funds that invest more globally. I only know some of them from WeBull (I just happen to have this one set-up), the other animal brokers might have assess to more:
| Funds on WeBull (Global assets) | Yield | ER |
|---|---|---|
| Fullerton USD Cash A USD Acc | ~4.4% | 0.22% |
| CSOP USD Money Market | ~4%* | 0.3% |
*No data. I used the headline 7-Day Annualized Yield.
We should expect the ones with global exposure to have higher yields, because there is more risk involved. The Endowus funds are fairly safe, mainly investing in SG Government securities.
Pros:
- Simple
- Relatively safe (safer if SG Gov securities)
- Likely would get a higher yield than HYSA over time
- Combining MMFs with short term bonds in 1 solution is nice
Cons:
- Small risk of capital loss, not insured
- Interest can fluctuate quite a lot
- Less liquid; can take 2-5 days (or more) to liquidate
(Ultra) Short term bond funds
I think short and ultrashort bonds can make sense due to lower exposure to interest rate risk. Here there are plenty of ETFs available, which makes it cheap and accessible for most retail investors. Accessing these through the London Stock Exchange (LSE) is the most tax efficient. Some brokers that offer access to LSE are IBKR and Poems. Typically, longer maturity bonds are more sensitive to interest rate changes. Government treasuries are also fairly safe assets:
| Fund | Ticker | YTM | TER | Remarks |
|---|---|---|---|---|
| iShares Treasury Bond 0-1 Year | IB01 | 4.04% | 0.07% | Ultrashort treasuries |
| Vanguard Treasury Bond 0-1 Year | VDST | 4.19% | 0.05% | Ultrashort treasuries |
| iShares Treasury Bond 1-3 Year | IBTA | 3.66% | 0.07% | Short term treasuries |
| iShares Ultrashort Bond | ERNA | 4.27% | 0.09% | Ultrashort corporate bonds |
| JPMorgan Ultrashort Bond | JPSA | 4.70% | 0.18% | Ultrashort corporate bonds |
YTM stands for yield to maturity, its a good estimate of returns to the investor. If you are willing to take the added risk, ultrashort corporate bonds seem reasonable too.
One possible strategy is to buy longer bonds when just starting to save for the goal, and slowly shifting allocation to shorter bonds as you get closer to the date where you require the cash.
Pro:
- Simple
- High yield at a reasonable cost
Cons:
- Higher risk of capital loss
- Might have to sell at a bad price if market is down when you need the cash
Target maturity bond funds
Target maturity funds are funds that buy a basket of bonds aiming for them to all mature by a fixed date. This makes it easy to diversify without having to buy a bunch of bonds yourself. The benefit of this over just buying normal bond funds is that your principal will be returned to you at the specified date (unless they went bankrupt). In contrast, bond funds that maintain a fixed maturity have to be sold at market price, and you might have to sell at a time when prices are unfavorable. I think this is very promising for short term financial goals, and I am considering using these myself.
| Fund | Ticker | YTM | TER | Remarks |
|---|---|---|---|---|
| iShares iBonds December 2027 | IT27 | 3.67% | 0.10% | US treasuries. 2027 maturity |
| iShares December 2028 Corp Bonds | D28A | 4.15% | 0.12% | Corporate bonds. 2028 maturity |
| iShares iBonds December 2029 | IT29 | 3.63% | 0.10% | US treasuries. 2029 maturity |
| iShares iBonds 2030 Corp Bonds | ID30 | 4.37% | 0.12% | Corporate bonds. 2030 maturity |
Edit 9/23/2025: For your own research/needs, look up iShares iBonds series and Invesco BulletShares series. These are the only two series I found that offer Ireland-domiciled target maturity bond ETFs.
Pros:
- High yield at reasonable cost
- Bond maturing when you need it means you get your principal when you need it
- Simple 1 fund solution
Cons:
- Still exposed to credit risk, i.e. borrower not being able to pay back your principal
- Limited funds to choose from
Fixed deposits and SG Gov securities
I don’t consider these solutions here. Not because they are bad, just because they don’t fit my personal needs. I don’t have a lump sum for a fixed deposit to make sense, since I plan to do monthly savings into the investment.
Singapore T-Bills, Singapore Savings Bonds (SSB), and Singapore Government Securities (SGS) all can make sense. The current rates are really low, so it isn’t significantly better than just saving into my HYSA (and MMFs invest in some of these for you too). I am willing to take a little more risk to get better yields.
Bottom line
I think all the cash management options are pretty great. There is also no reason why you cannot combine them, feel free to adjust complexity to your liking. Personally, I am likely going to use the target maturity funds, and may use some other solution during the downtime between the maturity and when I actually need the money.
Phoxchp 
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