Here’s one of the greatest misconception among Singaporeans.
“I need to save up a huge amount to be able to start investing.”
It is true that in the past one will require quite a substantial amount of capital before making his first investment. However, with the Regular Savings Plan (RSP), that argument is no longer valid. With as little as $100 month, average Singaporeans with little knowledge of investing can park a portion of their income with some of the safer options.
What is a Regular Savings Plan?
A Regular Savings Plan is one of the recommended options for investors who are new to investing. This plan allows one to invest a fixed amount into a variety of Singapore blue chip stocks or an Exchanged Traded Fund (ETF) that tracks the Straits Times Index (STI).
By allowing a constant monthly investment, the Regular Savings Plan allows an investor to dollar-cost average their investment. When prices of the stocks are low, the investor will automatically be purchasing more with his fixed amount of investment, and lesser, when stock prices are high.
The Regular Savings Plan is designed for long-term investors and the best solution to average Singaporeans like us who do not have the knowledge, discipline and patience to monitor the stock market closely.
Where can you set-up a Regular Savings Plan?
There are currently a few institutions providing such monthly investment plans.
In the tables below, we compare these plans for our readers:
Firstly, the financial institutes that provide Regular Savings Plan are:
Fees and charges differ for each provider as stated below:
With this, we went on to compare the cost depending on the different amount you wish to invest monthly.
In conclusion, for investment lesser than $500, POSB Invest-Saver and Maybank Monthly Investment Plan will be what you should look at.
For amount $500 to a thousand, OCBC Blue Chip Investment Plan will be the way to go, however, if you are going for 2 counters, Phillip’s Share Builder Plan will be cheaper.
Any investment above $1,000 and less than $1,700 will be cheapest with OCBC unless again, you are looking at multiple counters.
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This article first appeared in blog.seedly.sg