A regular savings plan is a way of saving regularly by investing an equal amount of money into a mutual fund of your choosing. Depending on your risk appetite, you could choose more stable or more aggressive funds, and the power of compounding can help you grow a small sum of money over the long-term.
This savings plan is great for beginner investors as they can be toggled to be relatively low-risk. The method it uses is called dollar-cost averaging, and it aims to use constant exposure as a way for traders to ride with the market and benefit from long-term upward trajectory.
In Singapore, there are plenty of places you can open a regular savings account. Below are the four best options locally.
DBS is a household name in Singapore, and no doubt they offer a savings plan. Transaction fees are low from 0.5% to 0.82%, and minimum investment each month is $100. For the many Singaporeans who use DBS as their primary or only bank, this may be a perk, as all the dividends from this plan can be credited directly into your existing account. This saves time and energy in setting up and keeping track of another account.
The minimum legible age is 18, and the plan offers four ETFs that tracks Singapore equities, bonds, corporate bonds, and Asian REITs.
Saxo Bank Regular Savings Plan
Headquartered in Copenhagen, Saxo Bank has made great strides to expand to Asia, and Singaporeans can now open a regular savings plan with the bank from regular contributions of only $100. The perk of having a savings plan with Saxo is that you will gain access to insights from large financial firms such as Lion Global and BlackRock, with which the bank itself has partnered.
Saxo offers low-cost savings, with a service fee of only 0.25% to 0.75% per annum, zero transaction costs, zero custody fees, and zero platform fees. They offer four types of portfolios:
Dynamic Growth: Asian Perspective, ideal for capital growth (high risk)
Defensive, ideal for cautious investors (low risk)
Moderate, ideal for those balancing between capital growth and preservation (medium risk)
Aggressive, ideal for capital growth (high risk)
OCBC Blue Chip Investment Plan
Investors also have the option to choose is the OCBC Blue Chip Investment Plan. The minimum legal age is 18, but you can open a joint account for minors as their parent or guardian. The minimum contribution is $100 a month, and the bank offers portfolios of up to 30 stocks or ETFs. This plan is popular in Singapore because there is a heavy localised focus, offering investments in companies on the Straits Times Index such as DBS, OCBC, Singtel, and Starhub.
The plan also offers investors four ETFs:
Lion-OCBC Securities Hang Seng Tech ETF
Lion-Phillip S-REIT ETF
Nikko AM SGD Investment Grade Corporate Bond ETF
Nikko AM Singapore STI ETF
Transaction fees vary by age and investment amount. Customers below the age of 30 with an investment amount of up to $500 get to have preferential fees, which start at 0.88% per transaction if you also investing $100 per month. Other customers pay a fee of 0.3% or $5 per counter, whichever is higher.
FSMOne Regular Savings Plan
Fundsupermarket – or FSM – offers a regular savings plan with 70 ETFs on Singaporean, Hong Kong, and United States markets. Out of all four plans in this list, FSMOne offers the widest global ETF selection for those who are interested in international investments. Their extensive ETF selection also includes more niche options that track emerging Southeast Asian markets, and digital and tech companies. This is perfect for experienced investors who would like to venture off the beaten track.
Their monthly investment fees are as low as $50, and the buying fee is 0.08% with a minimum order of $1 SG, $5 HK, or $1 US, whichever is higher.
Investing in a regular savings plan is a good way to grow and build wealth over the long-term. It is also a test of discipline, as money will be funnelled away from your salary into the plan each month. Its biggest benefit is the lack of volatility that trading brings, making it perfect for the risk-averse.