5 best regular savings plans in Singapore 2022: Invest with $100 a month

Investing is like exercising daily, improving your cooking skills or sleeping earlier — we all know we should be doing it, but due to lack of time, discipline or knowledge, it sometimes falls to the wayside.

Not knowing where to start is a big reason Singaporeans put off investing. You promise yourself that someday you’ll get around to googling Investing for Dummies. But for now there are more pressing things to do.

The solution? Regular savings plans offer an easy, no-brainer way to grow your money on a limited budget even if you know nothing about investing. With one of these plans, you can start investing the minute you turn 18.

That way, by the time you actually get around to scouring the world wide web for knowledge, you’ll already have a small and growing nest egg.

What is a regular savings plan?

Regular savings plans require you to pay in a fixed sum of money on a regular basis, usually every month. The plan will invest your cash in blue chip stocks, REITs and/or ETFs.

Such plans use an investment method called dollar-cost averaging to protect the investor from most of the volatility of stocks. This approach involves investing the same amount of funds according to a fixed and regular schedule, regardless of market performance.

Because of the consistent exposure you get to the market, the idea is that you ride out the ups and downs in the long-term and benefit from the market’s upward trajectory.

A regular savings plan can be a good option for beginner investors or those who do not have the time or the patience to monitor the stock market and react accordingly to fluctuations. It is designed for medium- to long-term investments, so don’t expect to make a quick buck.

5 best regular savings plans in Singapore

We’ll compare the five best options in Singapore: DBS Invest-Saver, FSMOne Regular Savings Plan, OCBC Blue Chip Investment Plan, POEMS Share Builders Plan and Saxo Regular Savings Plan.

1. DBS Regular Savings Plan

The DBS Invest-Saver plan lets you invest in ETFs and unit trusts for a minimum of $100 a month. It’s convenient as all your dividends can be credited directly into your existing DBS/POSB account, so there’s no need to set up a new account. You can sign up for DBS Invest-Saver once you hit the age of 18.

The plan offers four ETFs:

• Nikko AM Singapore STI ETF (tracks Singapore equities)
• ABF Singapore Bond Index Fund (tracks SGD bonds)
• Nikko AM SGD Investment Grade Corporate Bond ETF (tracks SGD corporate bonds)
• Nikko AM-StraitsTrading Asia ex Japan REIT ETF (tracks Asian REITs)

One important factor to compare when choosing such plans is the transaction fees or monthly sales charge, which will eat into your earnings. DBS Invest-Saver charges 0.50 per cent per transaction for their bond ETFs and 0.82 per cent per transaction for their equity and REIT ETFs.

If you’re investing $100 per month, that means you will pay up to $0.82 a month, or $9.84 a year in transaction fees.

2. OCBC Regular Savings Plan

Another convenient option if you prefer to stay within your bank’s ecosystem is OCBC Blue Chip Investment Plan. You can sign up for an account once you hit the age of 18, or open a joint account with your parent or guardian if you’re under 18.

This regular savings plan allows you to put aside as little as $100 a month and cobble together a portfolio of up to 30 stocks/ETFs. You can then sit back and collect dividends (if any) directly in your OCBC account.

OCBC Blue Chip Investment Plan lets you invest in companies on the Straits Times Index (STI) such as DBS, OCBC, Singtel and Starhub, as well as the following ETFs:

• Lion-OCBC Securities Hang Seng Tech ETF
• Lion OCBC Securities Singapore Low Carbon ETF
• Lion OCBC Securities China Leaders ETF
• Lion-Phillip S-REIT ETF
• Nikko AM SGD Investment Grade Corporate Bond ETF
• Nikko AM Singapore STI ETF
• Nikko AM ICBCSG China Bond ETF

If you’ve been keeping up with the Singapore Green Plan 2030, you’d know that sustainability is high up on the government’s agenda. With that in mind, investing in Lion OCBC Securities Singapore Low Carbon ETF might prove to be a wise investment move.

Customers below the age of 30 with an investment amount of up to $500 get preferential fees, which start at 0.88% per transaction for those investing $100 per month. That works out to $0.88 for each $100 instalment, or $10.56 a year.

Otherwise, you pay a fee of 0.3% or $5 per counter, whichever is higher. Because of the minimum fee, if you’re over 30 it’s more worth it to invest higher amounts per month.

3. POEMS Regular Savings Plan

POEMS has a few savings plans available, but we’ll focus here on the Share Builders Plan, which lets you invest for as little as $100 per month, making your payments automatically through GIRO.

POEMS Share Builders Plan lets you invest in more than 50 ETFs and stocks. Stock selections include DBS, OCBC, Genting Singapore, Keppel Corporation and Sembcorp Industries.

The range of ETFs is also wider than DBS and OCBC, including the SPDR Straits Times Index ETF, ABF Singapore Bond Index and Lion-OCBC Securities Hang Seng Tech ETF. If you want real estate exposure, you can opt for REITs like Frasers Centrepoint Trust and MapleTree Commercial Trust.

Unlike the savings plans offered by DBS and OCBC, which let you receive your proceeds in your regular bank account, you will need to open a separate Philip Investment Account.

One nifty feature is that the plan gives you the option to reinvest your dividends, which is great for younger investors who don’t need the income.

On the downside, the plan charges $6 for one or two counters, and $10 when you transact with more than three counters. That makes it by far the most expensive plan on this list, and it makes sense only if you have a larger amount to invest each month.

4. FSMOne Regular Savings Plan

Fundsupermarket or FSMOne offers a Regular Savings Plan that features 88 ETFs on SGX, HKEX and US markets — making it the widest global ETF selection offered by a plan on this list.

These include even more niche ETFs like the Premia Dow Jones Em ASEAN Titans 100 ETF (tracks emerging Southeast Asian markets) and ARK Next Generation Internet ETF (tracks digital and tech companies). But the selection can be overwhelming for beginners.

If you are investment-savvy but on a tight budget, FSMOne’s plan would suit you as their minimum monthly investment amounts are as little as $50.

Their buying fee is 0.08 per cent, with a minimum order of 1 SGD, 5 HKD or 1 USD, whichever is higher. Because of the minimum order fee, it’s more worth it if you invest at least a few hundred bucks each time.

5. Saxo Regular Savings Plan

This plan from Saxo Markets lets you pick from one of 4 professionally-managed ETF portfolios from BlackRock and Lion Global.

• Defensive — a low-risk portfolio focusing mainly on bonds
• Moderate — medium-risk, balances growth potential vs not losing money
• Aggressive — high-risk, focusing mainly on stocks
• Dynamic Growth: Asian Perspective — high-risk, focusing on Asia & emerging markets

Similar to many robo advisors, Saxo’s RSP lets you invest in ready-made portfolios rather than have to figure out which ETFs and stocks to pick.

You need a minimum deposit of $2,000 to start investing. After that, contribute regularly to your investments on a weekly/monthly basis, with each minimum contribution being $100.

They charge a 0.25 per cent to 0.75 per cent service fee, which works out to $0.25 to $0.75 per month if you’re investing $100 monthly, or $3 to $9 a year.

So, which regular savings plan should you use?

If you’re looking for convenience, DBS Invest-Saver and OCBC Blue Chip Investment Plan are the most convenient as you don’t need to set up a separate account to receive your dividends.

DBS’s will be more cost-effective if you’re below 30, but it’s also more limited in terms of ETF/stocks selection.

FSMOne’s Regular Savings Plan offers the best range of global indices, so if your priority is having a good selection of ETFs, go for this one instead.

Saxo Market’s plan is unique in that it offers professionally-managed portfolios rather than individual equities, ETFs and so on. If that attracts you, you might want to compare it against the robo advisors in Singapore.

Case study: Investing $500/month with a regular savings plan

Let’s look at the case study of the fictitious Mr Muhammad Ali, who’s 30 years old. He earns $3,000 a month and is able to set aside $500 for investments. Here’s how much he would pay for using a regular savings plan: