What is a Regular Savings Plan (RSP)?

Is a Regular Savings Plan (RSP) just a supercharged savings account? Not exactly! Though you may deposit a fixed sum of money into both types of accounts on a monthly basis, that's all the two have in common. While you earn interest on your savings account deposit, RSP gains will only be realised in the long-term, once you've built a substantial portfolio. Think of them as a way to kickstart your investment portfolio from as little as S$50-100 a month. If you have a few hundred dollars to set aside per month, an RSP could be a great way to embark on your personal investment journey.

Regular Savings Plan (RSP) may have the word "savings" in it, but don't let that mislead you. An RSP is an investment instrument that requires you to set aside a fixed sum on a regular basis. This fixed sum is then channelled into assets like ETFs, Unit Trusts or Portfolios. Though RSPs inherently come with some level of risk, there are often Portfolios created to account for varying risk appetites.

RSPs rely on a principle called Dollar-Cost Averaging (DCA), which involves investing a fixed sum at regular intervals regardless of price. It's a strategy designed to mitigate the impact of volatility in the global market, by automating purchases and turning a blind eye to market performance. This allows investors to buy more shares at lower prices and avoid buying shares when prices are high. Both beginners and seasoned investors can benefit from DCA.

DBS Invest-Saver

• Min. investment amount: S$100

• Fees: 0.5% per bond ETF transaction, 0.82% per equity/REIT ETF transaction

• Funds: Equity, REITs, and bonds

• Eligibility: At least 18 years of age, not a US Person

• Payment: Deducted from your account balance

Product details

• Invest with ease from your DBS digibank app and choose from digiPortfolio, ETFs or Unit Trusts.

• digiPortfolio is managed by the DBS investment team; choose from 6 major portfolios such as the SaveUp, Global, Asia, Retirement, Income and Global Portfolio Plus.

• ETFs give you access to broad-based Index Funds, like blue chip shares. All ETFs offered by DBS are listed on the Singapore Exchange (SGX).

• All available Unit Trusts are professionally managed and aimed at outperforming a market index.

• While digiPortfolios and ETFs are straightforward to set up, Unit Trusts require DBS members to undergo a Customer Knowledge Assessment (CKA) before any online purchases can be made.

• Always make sure there are sufficient funds in your account balance. DBS may choose to cancel your Invest-Saver plan after 2 consecutive unsuccessful deductions.

• You can invest using your CPF/SRS monies, but only for ETFs and Unit Trusts. Investments via digiPortfolio with your CPF/SRS monies are not supported at this time.

SingSaver's take

DBS's Invest-Saver Plan is a Regular Savings Plan suitable for those who are new to investing. By integrating the digibank app with investments, DBS lowers the barrier to entry and provides a trusted platform for beginners to start riding the market.

OCBC Blue Chip Investment Plan (BCIP)

• Min. investment amount: S$100.

• Fees: 0.88% per transaction for customers under 30, min. transaction of S$5 per counter for all other customers.

• Funds: Singapore REITs, blue chips and ETFs.

• Eligibility: Singapore Citizen, Permanent Residents and foreigners at least 18 years of age. (US Citizens, Green Card holders, EU residents and persons residing in the EEA are not eligible.)

• Payment: Deducted from your OCBC account balance, or your SRS.

Product details

• Easily manage your investments through the OCBC app or Internet Banking.

• Available blue chip stocks and ETFs are traded on the SGX.

• Choose from popular counters like DBS Group Holdings Limited, Lion-Phillip S-REIT ETF, Nikko AM Singapore STI ETF, Oversea-Chinese Banking Corporation Limited and Singapore Airlines Limited.

• Processing time for new OCBC BCIP applicants takes 7 business days on average. Successful applicants will receive an SMS notification.

• No lock-in period so you can withdraw your investments according to your needs.

• Sell units, change your counter selection and desired investment amount via the OCBC app or Internet Banking.

• Preferential fees of 0.88% per transaction for customers under 30 years of age. That translates into a flat rate of 0.88% for buying and selling. The rate for all other customers is 0.3% of the total investment amount or S$5 per counter, whichever happens to be higher.

SingSaver's take

Like DBS's Invest-Saver Plan, OCBC's Blue Chip Investment Plan integrates investment and personal banking seamlessly. But OCBC goes one step further and gives you the additional option of investing via Internet Banking.

POEMS Share Builders Plan

• Min. investment amount: S$100

• Fees: 0.3% per annum of Total Portfolio Value (TPV), min. S$1 per month

• Funds: SGX-listed stocks/ETFs/REITs

• Eligibility: Above 18 years of age

• Payment: Inter-bank GIRO

Product details

• Applications can be done online through the POEMS 2.0. portal. Those new to POEMS will have to complete an Share Builders Plan (SBP) Application Form, an Inter-bank GIRO form and apply for a POEMS trading account.

• Corporate action entitlements, such as dividends, will be credited into your SBP account's excess funds and reinvested into your preferred counters.

• Choose from a total of 28 ETFs, including options like Nikko AM Straits Times Index, Lion-CM CSI Dividend Index and the ABF Singapore Bond Index Fund.

• Choose from a total of 19 REITS, such as Keppel, Lendlease Global Commercial and CapitaLand Integrated Commercial Trust.

• Choose from a total of 29 shares, like ComfortDelGro Corporation Limited, Singapore Telecommunications Limited and Singapore Airlines Limited.

SingSaver's take

Yet another option for budding investors who want to dip their toes into counters listed on SGX, POEMS also allows you to reinvest your dividends. This comes at the price of investing outside of your preferred banking ecosystem, however.

Standard Chartered Regular Savings Plan

• Min. investment amount: S$100

• Fees: 1.5% online subscription fee

• Funds: Unit Trusts

• Eligibility: Active Online Unit Trust account, valid Customer Knowledge Assessment (CKA)

• Payment: Deducted from your account balance

Product details

• Invest effortlessly anywhere, anytime with Standard Chartered Bank's SC Mobile app.

• Get access to Standard Chartered Bank's Interactive Fund Library with research, comparisons and fund factsheets.

• Choose from 300 fund offerings, in currencies such as SGD, NZD, AUD, CAD and CHF and more.

• Provided that Standard Chartered Bank distributes them, you are able to transfer your unit trusts holdings from other banks to your Standard Chartered account.

• Standard Chartered Bank's Online Unit Trust Platform does not currently support investing with your CPF or SRS monies.

• Other fees and charges may apply. Fund houses may charge recurring fees that will be paid for by the Unit Trust and incorporated into the fund price.

• You will need to pass the Customer Knowledge Assessment (CKA), which involves either meeting the Educational Qualification, Work Experience or Investment Experience criterion.

SingSaver's take

Standard Chartered Bank offers yet another option for those who prefer investing on a familiar platform. While local banks offer options limited to SGX, Standard Chartered has a wider variety of Unit Trusts available.

FSMOne Regular Savings Plan

• Min. investment amount: S$50-100

• Fees: 0.05 - 0.0875% Platform Fee per quarter for Unit Trusts, 0.35-0.5% Management Fees p.a. for Managed Portfolios

• Funds: ETFs, Unit Trusts, Managed Portfolios

• Eligibility: Above 18 years of age

• Payment: Account balance, GIRO, CPF & SRS

Product details

• Low cost of investing, from 0% for Unit Trusts to S$1 for ETFs.

• No initial deposit required, you're free to begin investing right away.

• Start your investment journey from as little as S$50.

• Hold fractional shares and never worry about being tied down to big minimum lot sizes.

• Choose Managed Portfolios according to a sliding scale of investment appetites, from conservative to aggressive.

• Access ETFs from SGX, HKEX, NASDAQ, LSE, NYSE and more.

• No lock-in period so you can amend or terminate your investments as you wish.

• Subscribe to GIRO payments for a hassle-free, hands-off subscription plan.

• Invest easily with your CPF or SRS monies.

SingSaver's take

FSMOne's minimum investment sum is among the lowest in the market at S$50. Previously known as iFAST Financial Pte Ltd, FSMOne makes it easy to invest in ETFs listed on global exchanges.

When it comes to investing, we want to think that we are blessed with the knowledge, foresight and risk management skills necessary for doing a good job. The truth is that even seasoned professionals can struggle to catch the market bottom.

This is where Regular Savings Plans (RSPs) shine. Thanks to the principle of Dollar-Cost Averaging (DCA), they help to mitigate some common investment problems, while also providing the following benefits:

• Avoid timing the market: Regular Savings Plans take away the emotional and psychological aspects of investing. You will no longer have to feel the pressure of monitoring or checking on the market. 

• Start small: RSPs allow you to start investing with small amounts, from as little as S$50-100 a month. The lack of requiring any large lump sums significantly lowers the barrier to entry. RSPs also minimise the opportunity cost and maximise the power of compounding. All of these benefits are especially salient for budding investors and may help them feel less apprehensive about getting started.

• Disciplined investing with low effort: RSPs ensure that your portfolio grows while life carries on. Once your RSP is set up, the process is automatic and hassle-free, just like GIRO payments.

• High flexibility and liquidity: While RSPs are automated, you still have the freedom of altering your monthly investment sum. You can also stop your RSP at any time. This provides some latitude for unforeseen financial circumstances and allows you to ease cashflow temporarily and resume your plan when you are ready.

How would you describe your investment goals, risk tolerance and financial stability? Your answers to these questions and the following factors will influence how much you invest each month:

How much you save 

The more you save, the more cash you have and the more you can afford to invest, right? That might hold on paper, but whether this is true also depends on whether your savings are intended for a specific purpose, like wedding or home renovation expenses. Saving more doesn’t necessarily equate to having more funds to invest with. 

How much you earn

What does the ratio of your monthly investment sum to your salary look like? Obviously, your monthly income is also a big factor in determining how much you can realistically devote to investing each month. Let's take Singapore's nominal median monthly income of S$5,500 as of 2024 and assume that S$500 is being set aside for investing each month. A S$500 monthly investment sum equates to 9% of a salary of S$5,500 but makes up just 5% of a salary of S$10,000. 

If you’re looking for a budgeting guideline, the 50/30/20 rule recommends spending 50% on needs, 30% on wants and 20% on savings. Some budgeting experts call for people to split that 20% further by portioning off 10% for investments. On a salary of S$5,500, that works out to be S$550, amounting to S$6,600 allotted for your investments in a year—a great start for anybody new to investing.

Those who are eager to accelerate the growth of their portfolio may consider allocating a larger percentage of their salary to investing, so they can tap on the power of compounding early on. Whether this is a feasible idea would depend on your financial situation. 

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How much you’re being charged for fees 

Like all investments, RSPs come with fees attached. You may have to pay just one, or any combination of transaction, processing, service and platform fees. The costs involved depend on which platform you're using for your RSPs and will ultimately affect the performance of your portfolio. 

For platforms that charge flat fees, it may make more financial sense to invest larger amounts. For example, if a platform were to charge S$6 for investment counters below S$1,000, that means an investment sum of S$100 or S$900 will incur the same cost of S$6. This essentially translates to smaller fees, percentage-wise, for larger investment sums.

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