Singapore Best Regular Savings Plan [2024 Guide]: Steadily Grow Your Wealth

Starting your investment journey might seem like a big leap, but really, it’s easier than you might think. It's less about having to know every little thing about the stock market and more about just sticking with it over time. That's where Regular Savings Plans (RSPs) come into play. They're like your investment journey’s best buddy – easy to get started with — with as little as $100 and as soon as you turn 18.

Think of RSPs as the cooler, smarter cousin of your regular savings account. They let you dip your toes into the investment pool with just S$100 a month. Perfect for those of us looking to grow our money without the need to dive deep into market trends or financial jargon. 

So What is a Regular Savings Plan

Regular Savings Plans (RSPs) offer a disciplined, structured way to invest in the financial markets. By committing to a fixed sum of money deposited regularly—typically every month — investors can gradually build their portfolio with a mix of blue-chip stocks, REITs (Real Estate Investment Trusts), and ETFs (Exchange-Traded Funds).

Why You Should Make Regular Investments with Regular Savings Plan

• Dollar-Cost Averaging (DCA): This investment strategy involves regularly investing a fixed amount of money, regardless of market conditions. It's designed to mitigate the impact of volatility in the stock market, smoothing out the purchase price of investments over time.
• Market Exposure: Through consistent investments, RSPs allow you to stay invested in the market, enabling you to potentially benefit from the market's long-term growth while riding out short-term fluctuations.
• Accessibility: RSPs are particularly suitable for beginner investors or those who prefer not to actively monitor the stock market. With an entry point as low as S$100, they make it feasible for individuals to start investing with minimal initial capital.
• Medium- to Long-Term Horizon: RSPs are designed for the medium to long term. They are not about quick gains but about building a substantial investment portfolio over time, which can contribute to a comfortable retirement.
• Investment Risks: While the term 'savings' might suggest otherwise, RSPs are investment instruments and, as such, come with associated risks. The funds are allocated to assets like stocks, ETFs, and unit trusts, which means there's potential for both gain and loss.
• Effortless Investment: The process is largely automated, tapping into the principle of DCA. This means you continue investing a fixed amount monthly, buying more units when prices are low and fewer when they're high, effectively averaging out the cost of assets over time.

The strategy of dollar-cost averaging (DCA) facilitates buying more shares at a lower average price per share, contrasting with the approach of investing a lump sum all at once. The following table demonstrates the advantage of acquiring more shares when prices drop. By adopting DCA, you sidestep the challenges of market timing, which can help reduce investment stress and uncertainty.

In this scenario, over the span of six months with an investment of S$600, you've managed to acquire 230 units. The fluctuating prices didn't deter you; instead, you took advantage of the lower prices in February and June to acquire more units for the same investment amount. If you had decided to make a one-time purchase in April, your S$600 would have only fetched you 120 units at the price of S$5 per unit.

Regular Savings Plans to Choose from 

You can start investing in regular savings plans with banks, brokerage firms, and robo-advisors, each offering distinct plans to suit various investment goals. Here’s a rundown of notable providers and their offerings:

These RSPs represent a blend of traditional banking institutions, brokerage firms, and innovative wealth management platforms, each offering a different approach to regular savings and investment. Whether you're attracted to the robust offerings and promotions of traditional banks or the tech-savvy, customizable portfolios of wealth management platforms like Stashaway, there's an RSP suited to every investor's needs and preferences.

1. Stashaway

StashAway's General Investing portfolios are crafted to suit various investment goals, risk tolerances, and ethical considerations. By leveraging advanced investment strategies and the expertise of industry leaders like BlackRock, these portfolios offer a modern approach to growing your wealth.

There are three different General Investing investment solutions to choose from, each offering a unique diversification of investment portfolios.

• General Investing by BlackRock: This portfolio marks a strategic collaboration with BlackRock, providing access to a diversified asset range across 15-25 underlying funds managed by one of the world's premier investment firms. Designed for investors aiming to leverage BlackRock's comprehensive market analysis and investment insights, it offers four different risk levels to cater to those seeking a more direct investment solution.
• General Investing by StashAway: Crafted by StashAway's own investment team, this portfolio aims to maximize returns while managing risk through an in-house investment strategy. It's perfect for investors who prefer a dynamic, adaptive approach to asset allocation, informed by economic indicators and market conditions. With 7-13 underlying funds, this option presents 12 different risk levels, accommodating those desiring a more customizable managed portfolio.
• Responsible Investing with ESG: Catering to investors who prioritize environmental, social, and governance (ESG) criteria, this portfolio selects investments that meet high ESG standards. It's suited for those who wish to align their investment choices with their values, investing in companies with responsible practices and positive societal impact.

It's worth noting that StashAway's 2023 returns have been phenomenal, attributable not only to improved market conditions but also to a judicious selection of investment portfolios driving the positive returns, with gains ranging from 7.12% to 18.46% for General Investing by Blackrock and 5.15% to 16.47% for General Investing by Stashaway.

Low fees have always been highlighted as one of StashAway's unique selling points, offering management fees as low as 0.2% up to a maximum of 0.8%. There are no surprise fees, such as account setup or exit fees, and no transfer or withdrawal fees.

2. DBS Invest-Saver

DBS Invest-Saver plan is a straightforward way to start investing with just S$100 a month. Perfect for anyone 18 and up, it’s hassle-free since any dividends you earn go straight into your DBS/POSB account. 

Here’s what you can invest in:

• Nikko AM Singapore STI ETF that tracks Singapore equities
• ABF Singapore Bond Index Fund that tracks SGD bonds.
• Nikko AM SGD Investment Grade Corporate Bond ETF that tracks SGD corporate bonds
• Nikko AM-StraitsTrading Asia ex Japan REIT ETF & CSOP iEdge S-REIT Leaders ETF that tracks Asian REITs

DBS Invest-saver offers an extremely low fee of just 0.50% per transaction for bond ETFs and 0.82% per transaction for the equity and REIT ETFs. Meaning, for every S$100, you will only be charged between S$0.5 to $0.82.

For individuals seeking additional guidance, DBS offers the digiPortfolio, a blend of human expertise and robo-technology, providing four pre-built portfolios tailored to different investment objectives:

• SaveUp Portfolio: Ideal for conservative investors, comprising 3–6 unit trusts mainly in fixed income instruments, with a 0.25% p.a. management fee and a minimum investment of S$100.
• Income Portfolio: Designed for those aiming to generate income, this portfolio includes equity and bond unit trusts with a goal of a stable 4% p.a. payout (quarterly). It carries a 0.75% p.a. management fee and requires a S$1,000 minimum investment.
• Asia Portfolio: Suited for investors with a preference for Asian markets, particularly Singapore. It consists of SG-listed ETFs, has a 0.75% p.a. management fee, and a S$1,000 minimum investment.
• Global Portfolio: For those seeking diversification, it includes UK-listed ETFs investing globally, with a 0.75% p.a. management fee and a S$1,000 minimum investment.

To encourage new investors, DBS is offering a promotion until 31 March 2024, providing a full rebate of up to S$125 on sales charges for those who set up an Invest-Saver plan. This makes it an opportune time to begin investing with DBS.

3. OCBC Blue Chip Investment Plan (BCIP)

For those looking to integrate their investment activities within their banking operations, OCBC's Blue Chip Investment Plan presents a streamlined and efficient option. Available to individuals from the age of 18, and offering the possibility for minors to open a joint account with a parent or guardian, this plan demystifies the investment process, making it accessible to a broad audience.

With the OCBC Blue Chip Investment Plan, starting with a monthly investment of as little as S$100, investors can gradually build a diversified portfolio comprising Blue Chip stocks and ETFs. The investment options within this plan include a selection of companies listed on the Straits Times Index (STI) such as DBS, OCBC, Singtel, and Starhub, alongside a range of 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
• NikkoAM-ICBCSG China Bond ETF

For customers below the age of 30 investing up to S$500 per counter, the plan offers preferential fees starting at 0.88% per transaction for a S$100 monthly investment. This equates to S$0.88 for each S$100 installment or S$10.56 annually. Investors above 30, or those investing larger amounts, are subject to a fee of 0.3% or S$5 per counter, whichever is higher.

This plan by OCBC stands out for its ease of integration with existing bank accounts, a curated selection of investment options, and a fee structure that caters to both young and seasoned investors, making it a compelling choice for anyone looking to start or diversify their investment portfolio within the familiarity of their banking ecosystem.

4. POEMS Share Builders Plan

The POEMS Share Builders Plan stands out for those looking to dip their toes into investing with a manageable entry point of S$100 per month. This plan is accessible to individuals over 18 and offers the convenience of joint account options.

Investors have the opportunity to diversify their portfolios with a selection of more than 50 ETFs and stocks, including prominent names like DBS, OCBC, Genting Singapore, Keppel Corporation, and Sembcorp Industries. The Share Builders Plan boasts a broader range of ETFs compared to similar offerings from DBS and OCBC, totaling 13 ETFs, and includes real estate investment options through REITs such as Frasers Centrepoint Trust and MapleTree Pan Asia Commercial Trust.

A notable difference with the POEMS plan is the requirement to open a separate Philip Investment Account to manage and receive investment proceeds, diverging from the direct credit approach to a regular bank account seen with other plans.

An attractive feature of the Share Builders Plan is the option to reinvest dividends back into your portfolio, an excellent strategy for younger investors focusing on long-term growth rather than immediate income.

The fee structure is competitive, with handling fees set at 0.3% per annum of your Total Portfolio Value (TPV), ensuring affordability. The plan implements a minimum monthly charge of S$1, with a cap at S$8.88/month for portfolios under S$40,000 and S$5.88/month for those S$40,000 or above, making it a cost-effective option for investors at various stages of their investment journey.

5. FSMOne Regular Savings Plan

FSMOne Regular Savings Plan stands out for its extensive global ETF selection, featuring 155 ETFs from markets like SGX, HKEX, and the US. This range includes specialized options such as the Premia Dow Jones Em ASEAN Titans 100 ETF and the ARK Next Generation Internet ETF, catering to those keen on niche markets or tech-focused investments. With a minimum monthly investment of just S$50, it's an attractive choice for budget-conscious yet investment-savvy individuals. 

The plan's fee structure is competitive, with a buying fee of 0.08%, or a minimum charge based on the transaction currency—making it a cost-effective option for diversifying investment portfolios. Alongside ETFs, FSMOne offers access to 1,451 unit trusts from 52 fund managers and 10 managed portfolios, providing ample choice for investors looking to customize their investment strategies across various markets. 

With no lock-in period, the plan offers flexibility for investors to adjust their investment amounts or withdraw funds as needed, ensuring accessibility and convenience. The variety of investment options and the ability to actively manage investments make FSMOne's Regular Savings Plan a comprehensive choice for those looking to invest across a broad spectrum of assets.

6. Saxo Regular Savings Plan

Saxo Regular Savings Plan is designed to simplify the investment process for those new to investing or too busy to dive deep into market research. By offering a selection of professionally managed ETF portfolios curated by financial giants BlackRock and Lion Global, Saxo ensures your investments are in capable hands, tailored to your risk tolerance.

• Defensive Portfolio: Ideal for the cautious investor, this low-risk option concentrates on bonds, delivering a solid total return of 18.0% since its inception.
• Moderate Portfolio: Aiming for a balance between growth and preservation, this medium-risk portfolio has achieved a 31.8% return, blending stocks, bonds, and alternative investments.
• Aggressive Portfolio: Targeting those willing to embrace higher risk for potentially greater rewards, focusing predominantly on stocks, with an impressive 45.6% return since inception.
• Dynamic Growth: Asian Perspective: For investors looking to capitalize on the growth in Asia and emerging markets, this high-risk choice has shown a simulated performance of 84.6%, demonstrating its potential for substantial gains.

Saxo's RSP is competitively priced, with an annual service fee ranging from 0.25% to 0.75%, depending on the portfolio, and an additional expected ETF cost of 0.23% per annum. Importantly, Saxo maintains a transparent fee policy with no hidden charges such as platform fees, entry or exit fees, or custody fees, making it a straightforward and cost-effective option for investors.

To participate in Saxo's RSP, an initial deposit of S$2,000 is required, after which you can make regular monthly contributions of at least S$100. This plan is particularly appealing for individuals seeking a hands-off investment approach without compromising on the quality and potential of their investments.

7. dollarDEX

dollarDEX by Singlife is tailored for both experienced investors and beginners, offering an uncomplicated entry point into the world of online investing. With dollarDEX, what you invest is what gets invested. You won’t be bogged down by transaction fees, sales charges, or hidden costs. 

You can choose from over 900 funds spanning various fund managers, geographic regions, asset classes, and sectors. dollarDEX provides tools like the Fund Finder and Performance & Charts to help you select and monitor funds that align with your investment objectives.

Too complicated? dollarDEX also simplifies portfolio construction based on your risk appetite, offering investment profiles from conservative to aggressive:

• Conservative: Prefers avoiding losses with a long-term investment horizon.
• Moderate: Accepts short-term losses for potential long-term recoveries.
• Balanced: Open to some losses in pursuit of significant capital gains.
• Growth: Prioritizes returns, accepting more risk than a balanced investor.
• Aggressive: Focuses on high returns, willing to embrace high risk.

How much to invest each month

Determining the right amount to invest each month into a Regular Savings Plan (RSP) is a personalized decision, deeply rooted in your financial goals, risk tolerance, and overall financial health. Start by delineating your objectives — are they more immediate, like saving for a trip in the next year, or more distant, such as retirement? This distinction is crucial because long-term goals can benefit significantly from the compounding interest effect, potentially allowing for more aggressive monthly contributions.

Next, evaluate your monthly income and expenses to ascertain how much you can comfortably afford to invest without compromising your daily needs or emergency savings. A general guideline is the 50/30/20 rule, where 20% of your income goes towards savings and investments. However, this can be adjusted based on your specific circumstances and financial responsibilities. 

It's also wise to consider starting small, especially if you're new to investing, and gradually increase your investment amount as your financial situation improves or as you become more comfortable with the process. Remember, the key to successful investing through an RSP is consistency and a clear understanding of your financial capacity and goals.

Exploring Regular Savings Plans Beyond the Basics

While platforms like DBS, OCBC, and POEMS offer a mix of ETFs and stocks through their Regular Savings Plans (RSPs), traditional banks such as Citibank, HSBC, Standard Chartered, and UOB focus their RSP offerings primarily on unit trusts. 

Understanding the nuances between unit trusts and ETFs is crucial for investors looking to diversify their portfolios within these banks' RSP frameworks.

• Unit trusts = Akin to mutual funds, aggregate a variety of investment assets, affording investors the opportunity to diversify without the need for substantial capital. These funds are actively managed by professional fund managers, who adjust the portfolio's asset allocation to navigate market changes and aim for optimal returns. However, this active management incurs higher fees, which are passed on to the investor.
• ETFs = Operate on a passive management model, where asset allocation reflects the rules of the ETF's underlying index without frequent adjustment. This leads to significantly lower management fees, making ETFs an attractive option for beginners and those planning to invest over longer horizons. 

How to Select the Right Regular Savings Plan for Your Investment Goals

Choosing the right Regular Savings Plan for your investment journey requires a careful consideration of your preferences for management, investment types, and ease of use. 

• For a Tailored Experience: StashAway offers a range of General Investing portfolios, including partnerships with BlackRock for those seeking diversified investments managed by industry leaders, and a Responsible Investing option for ESG-focused investors. Its management fees are competitive, ranging from 0.2% to 0.8%, with no hidden costs, making it an attractive option for investors looking for a modern approach to portfolio management.
• For Direct Bank Integration: Both DBS Invest-Saver plan and OCBC's Blue Chip Investment Plan allow for the seamless crediting of dividends directly to your bank account, removing the need for separate investment accounts. These plans offer straightforward investing in blue-chip stocks and ETFs, with DBS providing an added variety through its digiPortfolio option for guided investing.
• For Broad Investment Selection: FSMOne Regular Savings Plan stands out with its extensive offering of over 1,500 ETFs and unit trusts, appealing to investors seeking a wide array of local and global indices. Its entry point of S$50 makes it accessible to a wide audience, coupled with a competitive buying fee of 0.08%.
• For Local Stock Investments: Investors focusing on Singapore stocks may find OCBC's BCIP and POEMS Share Builders Plan most aligned with their goals, offering a substantial selection of Singapore-based stocks and ETFs, including unique options for REIT investments.
• For Managed Portfolio Ease: Saxo Regular Savings Plan simplifies investing with professionally managed ETF portfolios by financial giants BlackRock and Lion Global, tailored to your risk profile. With an initial deposit requirement of S$2,000 and a clear fee structure, Saxo caters to investors seeking a hands-off approach with the expertise of seasoned managers.
• For Fee-Conscious Investors: dollarDEX by Singlife eliminates the worry of transaction fees, sales charges, or hidden costs, fully investing your money into a choice of over 900 funds. It also offers portfolio recommendations based on your risk appetite, providing a straightforward path to building a diversified investment portfolio.

Each platform offers unique features that cater to different investor needs, from those seeking direct bank integration and low-entry investment options to those looking for wide-ranging investment choices or managed portfolios. Assessing your personal investment goals, risk tolerance, and preference for active versus passive management will help you select the RSP that best suits your financial journey.