Versa Cash Review: A Great Alternative to Fixed Deposit (FD)!

Fixed Deposit, or FD, has always been people’s go-to way to save or deposit extra cash. The problem is, it locks your money in for a long period of time, or requires a high initial deposit to start with.

In this article, let’s look into Versa Cash, a great alternative to FD in Malaysia. Personally, I’ve been using Versa Cash since 2021 and I absolutely love it! In this post, let’s explore if Versa is for you! 

[NEW: Get 4.3% promo return rate with Versa Cash! Find out more at the end of this post!]

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Highlights of Versa Cash

Established in 2021, Versa Cash is a digital cash management service that provides users competitive returns like FD, but without the troublesome restrictions:

• Regulated: Versa is regulated by the Securities Commission (SC) of Malaysia.
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• Competitive Return: Through Versa, users can earn a base net return of 3.55% per annum, which is on-par with the rates of Fixed Deposit (FD).
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• Low Risk: The underlying fund of Versa is the Affin Hwang Enhanced Deposit Fund. It is a money market fund that invests users’ money in highly liquid & low-risk cash instruments.
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• Flexible & Low Barrier of Entry: Malaysians aged 18 and above can start saving or investing via Versa from as low as RM1. Withdraw anytime without being charged penalty fees.

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How does Versa Cash work?

So, how exactly is Versa Cash able to deliver returns that are on-par with FD?

This is possible because Versa helps invest users’ cash into money market funds (MMF). MMFs are funds that invest in Fixed Deposits and highly liquid, short-term cash equivalent instruments called Money Market Instruments.

Essentially, Money Market Instruments are short-term debts issued by banks in order to accumulate short-term cash-pile to make up for the shortfall in their daily deposit reserve. Simply put, MMFs are lending money to banks when they buy these Money Market Instruments.  

These instruments are relatively low-risk as they are backed by the banks. Moreover, they are highly liquid with short maturity periods. Through regular redemption of matured Money Market Instruments, it allows MMF to provide a similar rate to FDs without having to lock up users’ capital.

For Versa, the underlying MMF that they invest in is the Affin Hwang’s Enhanced Deposit Fund. It is a low-risk MMF by Affin Hwang Asset Management.

In short, through Versa Cash, you can earn a similar rate to FD through low-risk MMF without having to lock up your funds, unlike conventional FDs. It is a great choice if you are looking for a competitive and flexible alternative to FDs.

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Is Versa Cash Safe to Use?

When it comes to regulation, Versa is regulated by the Securities Commission (SC) of Malaysia. This ensures that Versa is always operating in Malaysia as per the guideline from the local authority. 

As for the safety of funds, the cash deposits from users are held by a third party (trustee), which is HSBC (Malaysia) Trustee.

In other words, your deposits to Versa are separate from Versa’s company finances. As such, this ensures no deposits can be used for fraudulent purposes and you will always have full access and claim to them no matter what happens to Versa.

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Versa Cash Fees & Charges

As a digital cash management platform, Versa Cash does not charge a fee to users. That said, the underlying MMF, Affin Hwang’s Enhanced Deposit Fund, does charge reasonable annual fees, as shown below:

	% per annum
Management fee per annum	-0.30%
Trustee fee per annum	-0.05%
Base net return per annum (AFTER fees)	3.54%

Next question: Are there any fees on fund withdrawal via Versa?

Unlike FDs, there are no charges when you withdraw your funds from Versa. Withdrawals are expected to be reflected within 1-2 business days depending on the time of withdrawal (ie. before or after 2:30pm during business days).

At this point, perhaps a question that you have in mind is “So how does Versa make money?”.

Aside from Versa Cash (which is free to use), Versa also offers investment services via Versa Invest. Through Versa Invest, Versa will charge a small management fee which is their key income source. 

READ MORE: Versa Invest Review

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3 things I like about Versa Cash

#1 Performance on par with conventional Fixed Deposits (FDs)

Through Versa, interests are compounded daily and interest payout is made every month, which is re-invested into user’s fund.

All of this combined, through its underlying Affin Hwang Enhanced Deposit Fund, Versa offers a base net return of 3.54% return per annum (AFTER fees) for users.

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#2 Flexible & Low barrier of entry

2 amazing features about Versa are:

1. Low barrier of entry: You can start investing or saving with Versa from as low as RM1. Even better, using my exclusive referral code VERSANML4, you can get RM10 credited into your Versa account when you make a minimum deposit of RM100!
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2. Flexible: There are no charges to open a Versa account. In addition, you can withdraw your funds anytime and there are no fees on withdrawal.

Combined, both these features make a compelling edge against conventional FDs. Reason being, FDs usually have higher minimum deposits & they tend to lock in users for a period of time (and charge a penalty for early withdrawals).

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#3 Simple & clean user experience (suitable even for my retired mom!)

Perhaps my favorite experience with Versa is their simple and clean user interface.

As a simple digital cash management platform, I enjoy the design of the app that clearly shows the capital invested and payout.

In fact, when my retired mom was looking for a better FD alternative to save her idle cash, I recommended Versa without hesitation. This is because I know she can totally navigate the app with clarity & confidence.

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Risks + What You Need to Know Before Investing in Versa Cash

In this part, let’s look at 3 things that you need to be aware of while investing your money with Versa:

1. Market risk

While being a relatively stable investment, investing in Money Market Fund (MMF) via Versa still presents exposure to market risk.

One such risk is the fluctuation in interest rate. As an example, if Bank Negara Malaysia (BNM) increases interest rate, MMF is likely going to generate higher returns. On the flip side, if BNM reduces interest rate, it’ll also affect the returns of MMF as a result. 

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2. Not protected by PIDM

While investing in Versa, it is important to remember that your fund is not protected by Perbadanan Insurans Deposit Malaysia (PIDM).

PIDM is an organization that protects deposits kept in banks and financial institutions that are a member of PIDM. Conventional bank FDs are usually protected by PIDM.

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3. Not shariah-compliant

In addition, Versa’s underlying MMF, Affin Hwang Enhanced Deposit Fund is not shariah compliant.

Hence, this is something that you need to be aware of prior to investing with Versa.

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Improvement: ONE Feature Versa HAS to Add

As a Versa user myself (also having opened an account for my mom), there is one handy feature that I think Versa Cash lacks: Automatic Scheduled Transfer.

Being a digital cash management platform, I think having the convenience for users to automate their deposits every week/month should be a fundamental feature.

While I enjoy using Versa, I think this improvement will make Versa a more complete financial app.

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Eligibility + Is Versa Cash for You?

Versa is open to Malaysian citizens who are 18 years old and above with an NRIC/MyKad. This means that even young Malaysian adults can start building good financial habits by saving/investing from their phones – neat!

That said, is Versa for you?

To answer this question, it is best to first know what Versa is NOT:

• Versa Cash does not invest in stocks/equities (ie. Higher risk assets). Hence, do not expect mutual fund/robo-advisors-like returns.
• Versa Cash does not guarantee returns. Even though it invests in low-risk MMF, returns are still subjected to market fluctuation.

Hence, in my opinion, Versa Cash is great for:

1. People looking for a flexible alternative to FD & typical savings account for general savings
2. People looking to save for a specific goal (eg. house, car, wedding)
3. People with extra cash and want to save it for the short-term

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Versa Promo Code: VERSANML4

In collaboration with Versa, No Money Lah is bringing an exclusive deal for new users that are keen to start saving or investing with Versa!

Use my dedicated Versa referral code – VERSANML4, and you will get RM10 credited into your account* when you successfully make a minimum deposit of RM100 or more. That’s an instant 10% return on your investment.

Open a Versa account today!

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How to open a Versa Account

Creating a Versa account is simple and straightforward:

Step 1: Click HERE to install the Versa app.

Remember to apply referral code ‘VERSANML4’ for an exclusive RM10 account-opening reward!

Open a Versa account today!

Step 2: Start your account opening process by keying in the necessary details such as a new display name, email address, and password. 

Step 3: You’ll go through a simple identification process where you’ll be asked to verify your mobile number, IC, and personal details. This is a required process by the regulators to make sure it’s the real you that’s opening an account.

Step 4: It’ll take about 2-3 business days to verify your account. Once that’s done, you can start investing in Versa by making your first deposit!

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Versa or StashAway Simple or KDI save?

In terms of offering, Versa’s closest competitor is certainly KDI Save and StashAway Simple. Both offer users flexible and low-barrier access to MMF that pays competitive FD-like rates.

I think this comparison deserves a full article on its own so I’ll attach a link HERE when I come out with a comparison article real soon! 

Personally, I use both Versa, KDI Save, and StashAway Simple to save for different purposes and I am happy with them as an alternative to FD (I think you will, too!).

READ: The Ultimate FD-Killer Showdown: StashAway Simple vs Versa vs KDI Save vs TNG GOinvest

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[LIMITED-TIME PROMO] Get 4.3% return on your savings via Versa Cash!

Looking to get more out of your cash? For time being, all Versa Cash users are eligible for a promotional rate of 4.3% p.a. on their cash!

How it works:

1. Versa Cash’s 4.3% promotional rate is applicable to all new & existing Versa Cash users.
2. As long as you maintain a min. of RM1000 in your Versa Cash and/or Cash-i account, the promotional rate is automatically applied to the first RM30,000 in your Versa Cash account. Any subsequent balance above RM30,000 will continue to earn Versa Cash’s base net return of 3.54% p.a.
3. Promotional period: Ongoing until further notice.
4. Refer to the full T&C for more info.

I think this is GREAT news if you are looking for a higher rate for your savings! Remember, there is no lock-in period for Versa Cash and you are free to withdraw your funds anytime!

 

Open a Versa account today!

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No Money Lah’s Verdict

So there you have it, my review on Versa! If you are looking for an FD alternative to invest/save your cash, Versa is a platform that I can wholeheartedly recommend you to try.  

Personally, I enjoyed using the platform and I think you will, too! 

Open a Versa account today!

 

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Disclaimers

Investment in a money market fund is not the same as placement in a deposit with a financial institution. There are risks involved and investors should consult a financial planner before making any investment decisions.

This post contains affiliate links/code that afford No Money Lah a small amount of commission (and help support the blog) should you sign up through my affiliate link/code.