The Sunday Times highlights four Regular Share Savings (RSS) plans. PhillipCapital's RSS, launched in February 2002, was the first, followed by POSB and OCBC Bank in mid-2013, while Maybank Kim Eng's RSS was available from March 2015.
POSB INVEST-SAVER POSB
Invest-Saver is a regular share savings plan that allows customers to invest in 30 Singapore blue chip stocks (via Nikko AM STI ETF) and/or Singapore bonds (via ABF Singapore Bond Index Fund), starting from $100 a month, helping them gain diversified exposure to indexes.
Customers can invest a fixed sum via a monthly Giro deduction. When you invest in the ABF Singapore Bond Index Fund, you are investing in a basket of high- quality bonds mostly issued by the Singapore Government or government-linked bodies such as the Land Transport Authority and the Housing Board.
Charges include a low sales charge of 1 per cent for the Nikko AM Singapore STI ETF or 0.5 per cent for the ABF Singapore Bond Index Fund on the amount invested monthly. There are no other administration or platform charges. There are also no exit or redemption charges, though this may be subject to change.
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Note that customers will not be able to reinvest the share dividends as they will be paid out.
OCBC BLUE CHIP INVESTMENT PLAN
With this plan, investors can invest in as many companies as they wish from a list of 19 Singapore-listed firms, including the STI ETF. The minimum investment per company is $100.
Mr Gregory Choy, head of wealth advisory at OCBC Bank, said that this mode of investing is especially useful to young investors who are looking to dabble in the stock market in bite-sized pieces.
Single account-holders must be 18 years or older. And a parent can open a joint account with his or her child who is below 18.
If there is a voluntary corporate action or dividend reinvestment plan (Drip), the customers can choose if they want to receive cash or reinvest the amount in more shares. However, if the dividend amount is not sufficient to make up for one share, it will be defaulted to cash. Cash dividends are not reinvested.
PHILLIP SHARE BUILDERS PLAN
The first RSS to be launched here in 2002, the Share Builders Plan (SBP) is a regular fixed-dollar-amount investment plan which enables you to buy 29 shares on a consistent and incremental basis so as to build up a portfolio of securities for yourself.
Parents can also set up a Junior SBP, where the investment amount starts at $100 per counter and the list of counters available is the same too.
This means that parents do not have to wait until their children are 18 to start accumulating wealth as they are able to set up a Junior SBP as soon as their children are born.
The SBP and the Junior SBP allow for dividends to be automatically reinvested in the plan.
Ms Lisa Lee, executive director of Phillip Securities, said: "With the benefits of regular disciplined contributions, dividend reinvestment and the power of compounding, our clients are able to see their portfolio grow over the years."
A Phillip Securities customer of more than 10 years and a father of four, Dr K. W. Lin said that he had always been encouraged by his father to invest early. So when he started working, SBP was the perfect investment for him.
"Starting at $500 a month, I've gradually increased the amount and I'm glad to say that it is now a substantial portfolio. The strategy of dollar cost averaging has worked well for me, which is why I've set up Junior SBP for all my children," he said.
MAYBANK KIM ENG MONTHLY INVESTMENT PLAN
With this plan, you can select from 230 stocks across five markets - Singapore, the United States, Hong Kong, Malaysia and Thailand.
The stocks are typically components of popular indices. For the Singapore market, all 30 component firms of the STI are available through the monthly investment plan. You can also trade certain ETFs, like Nikko AM STI ETF 100 and SPDR STI ETF, and real estate investment trusts (Reits).
For the US market, all 30 companies that comprise the Dow Jones Industrial Average are available, among others.
Cash dividends are not automatically reinvested. Maybank Kim Eng says that investors can however choose to increase the investment amount in the following month using the cash dividends.