72% in Cash: Is Our Love of Safe Money Holding Us Back?

Singapore’s affluent are getting richer. But much of that wealth is not being put to work.

A white paper released on 22 October by Citi Wealth and research firm RFI Global found that average assets for affluent clients in Singapore, those with US$100,000 to US$1 million with the bank, rose 5% over the past year to just over US$565,000.

But most of that money is sitting still.

72% of affluent clients’ onshore assets are held in cash and deposits. For assets booked offshore, the figure is 74%. Only around a quarter is invested.

In the US, affluent and high-net-worth clients hold 42% in deposits and 58% in long-term investments.

Why We Love Cash

There are good reasons to hold cash, and the report points to two of them: liquidity and capital preservation.

Cash is there when you need it. Its value does not drop overnight because markets fall. And in a city where big expenses arrive in large lumps, a home down payment, school fees, a renovation, a parent’s medical bill, having money on hand feels prudent.

Rates have also made cash look respectable. For much of the past few years, fixed deposits and T-bills paid enough that keeping money in the bank felt like a reasonable decision rather than a lazy one.

Cash feels safe because its risk is invisible.

The Cost of Feeling Safe

The risk of cash is not that it falls in value. It is that it quietly buys less.

Singapore’s headline inflation was 2.2% in September, with core inflation at 2.0%.

Compare that with what cash is earning today:

In other words, even the best-paying safe options are roughly treading water after inflation. Money left in an ordinary savings account is going backwards.

Over time, that adds up. If prices rise by 2.2% a year for a decade, S$100,000 would buy only what about S$80,400 buys today.

How Much Cash Is Enough?

None of this means cash is a mistake. The question is what each dollar is for.

Money you might need soon belongs somewhere safe and accessible. That includes an emergency fund, typically several months of expenses, and savings for plans in the next few years, such as a home purchase or a sabbatical.

Money you won’t need for many years is different. Leaving it in cash protects against short-term swings, but at the cost of long-term growth.

There are signs that attitudes are shifting. The same report found that mutual fund ownership among Singapore’s high-net-worth clients rose from 11% in 2022 to 31% in 2026, the highest rate in Asia.

As Singaporeans, we are good at saving. The harder habit is putting our savings to work.

Holding cash is not wrong. Holding cash without a purpose often is.

A useful exercise is to split your money into three buckets: what you need now, what you need in the next few years, and what you won’t touch for a decade or more. Only the first two really need to be in cash.

Cash buys peace of mind. The question is whether you are paying more for it than you realise.