Money market funds in Hong Kong and Singapore are paying savers net yields of roughly 2.3% to 2.8% on Hong Kong dollars and 0.9% to 1.7% on Singapore dollars, but in both cities the best fixed deposits currently match or beat them, and only the deposits carry government-backed insurance.

For savers holding cash between investments, the choice comes down to four things: what each product pays after fees, how fast the money can come back, what happens if the provider fails, and what it costs to get in and out. The answers differ by city and by currency.

What Hong Kong and Singapore funds and deposits pay

In Hong Kong, four Hong Kong dollar money market funds tracked by wealth platform Endowus had net yields of 2.28% to 2.81% as of Sept. 30. The largest, GaoTeng WeInvest HKD MMF, had about HK$35 billion in assets and a net yield of 2.81%. The HSBC Global Money Funds Hong Kong Dollar, with about HK$20.8 billion, showed 2.28% net, and its factsheet lists a 0.30% management fee.

Bank deposits in the city pay more, if savers lock up the money. Endowus put the best Hong Kong dollar time deposit rates among selected large banks at up to 3.00% as of Oct. 20, on tenors of one to six months, while Hong Kong dollar savings accounts paid 0.001%. U.S. dollar funds paid 3.83% to 4.11% net, against time deposits of up to 4.00%.

Singapore's numbers are lower across the board. Endowus listed five Singapore dollar money market funds with net yields of 0.90% to 1.68% as of Oct. 2, with United SGD Money Market Fund at the top. The Fullerton SGD Cash Fund, the biggest at about S$9.87 billion, showed 1.17% net, though Beansprout put its indicative seven-day annualized yield at about 1.48% on Oct. 22.

Fixed deposits did better. Beansprout's table dated Oct. 21 showed 12-month offers of 2.10% at CIMB and RHB, and 2.05% for six months at HL Bank and Bank of China, though some of those require S$10,000 to S$200,000. Capital Times has reported that Maybank and Hong Leong Finance raised fixed deposit offers to as much as 2.19%. The six-month Singapore Treasury bill cut off at 1.95% at its Oct. 22 auction, according to Beansprout.

One caution on comparisons: fund yields are a snapshot of what the portfolio is earning now and change daily, while a deposit rate is fixed for its term. Endowus says fund yields move with short-term interest rates and are not guaranteed.

Liquidity and fees

The main case for a money market fund is access. Funds deal daily at the day's net asset value, with no lock-up or penalty for leaving, according to Endowus. HSBC's Hong Kong dollar fund, for example, has an 11 a.m. Hong Kong dealing cut-off.

A time deposit ties money up until maturity. Breaking it early costs a penalty set by the bank, Endowus says, and minimum deposits vary.

Fees cut into fund returns in layers. Fund expenses, including trailer fees paid to distributors, generally run 0.15% to 0.40% a year, Endowus says. Platforms may add their own charge: Endowus levies 0.10% a year in Hong Kong and 0.15% in Singapore on its cash products, and the Hong Kong page says its quoted fund yields do not reflect that platform fee. Bank deposits carry no explicit fee, though Singapore T-bills cost S$2 per transaction through banks, according to Endowus.

Deposit insurance: the dividing line

The biggest structural difference is protection. Hong Kong's Deposit Protection Scheme compensates depositors up to HK$800,000 per bank, a limit in force since Oct. 1, 2024, and covers deposits in most currencies, according to the Investor and Financial Education Council. Structured deposits and time deposits longer than five years are excluded.

Singapore's scheme covers up to S$100,000 per depositor per member institution, but only Singapore dollar deposits, according to the government's MoneySense site. It explicitly excludes foreign currency deposits, structured deposits and investment products such as unit trusts.

Money market funds fall outside both schemes. They are investments, not deposits, and Endowus notes they carry the possibility of losing principal, although they hold short-term bank deposits and high-quality debt. Some, like the Fullerton SGD Cash Fund, invest mainly in bank deposits, but the fund's investors are not covered as depositors.

In practice, a Hong Kong saver with less than HK$800,000 at one bank currently gets a higher fixed rate and full insurance from a time deposit, while a money market fund buys daily access at a small yield discount. In Singapore, the gap favoring deposits is wider. Singapore savers also have the November Singapore Savings Bond, issued Nov. 2, which pays 1.67% in its first year and averages 2.45% a year over 10 years, according to Beansprout.

This article is general information, not financial advice.