5 best regular savings plans in Singapore 2024: Invest with $100 a month

If you promised yourself that you would finally start investing in 2024, good on you. Before you begin this journey, remember that investing is easier than you think. It's more about time in the market rather than time studying the market. 

Regular Savings Plans are the best way to get time in the market. They are an automated, fuss-free, relatively low-risk way to grow your wealth at a steady pace. You can start with a plan the minute you turn 18, and all you need is S$100.

What is a regular savings plan?

Regular savings plans require you to deposit a fixed sum of money regularly, 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 volatility in the stock market. This approach involves investing the same amount of funds in 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 overall upward trajectory.

A regular savings plan can be a good option for beginner investors or those who do not have the time or patience to monitor the stock market or make predictions on where it's going to go next. 

This is a medium- to long-term investment, so don't expect to make a quick buck. Over time, you will accumulate a nice nest egg that you can rely on for a comfortable (and hopefully early) retirement.

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.

We picked these five regular savings plans because they are offered and managed by reputable banks and brokers we can trust. After all, a regular savings plan is a long-term investment, and we want your money to be in safe hands.

Another common factor you'll find with these five regular savings plans is that they all offer ETFs (exchange traded funds), as opposed to other regular savings plans that only offer unit trusts.

When investing in an ETF, you invest in a basket of stocks that track the market. ETFs are passively managed, so they are significantly cheaper than unit trusts.

With unit trusts, fund managers pick stocks for you, so the fees are much higher-but there's no guarantee of better performance.

Let's take a closer look at each 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 S$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 turn 18.

The plan offers five ETFs for you to choose from:

• • 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)
  • CSOP iEdge S-REIT Leaders ETF

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 its bond ETFs and 0.82 per cent per transaction for its equity and REIT ETFs. If you're investing S$100 per month, that means you will pay up to S$0.82 a month or S$9.84 a year in transaction fees.

DBS has also introduced another option for those who want even more hand-holding: digiPortfolio. Powered by human expertise and robo-technology, digiPortfolio offers you four ready-made portfolios that cater to your investment goals:

1. SaveUp Portfolio: For conservative investors

• Portfolio of 3 – 6 unit trusts, primarily in fixed income instruments
• 0.25 per cent p.a. flat management fee
• Min investment: S$100

2. Income Portfolio: For investors looking to generate income

• Portfolio of Equity and bond unit trusts
• Aims to generate a stable payout of four per cent p.a. (payable quarterly)
• 0.75 per cent p.a. flat management fee
• Min investment: S$1,000

3. Asia Portfolio: For investors who have a home bias

• Portfolio of SG-listed ETFs investing across Asia with a Singapore focus
• 0.75 per cent p.a. flat management fee
• Min investment: S$1,000

4. Global Portfolio: For investors who prioritise diversification

• Portfolio of UK-listed ETFs investing globally
• 0.75 per cent p.a. flat management fee
• Min investment: S$1,000

With digiPortfolio, you simply need to select one out of the four plans, and you're all set. If you're keen to start investing, DBS has a limited-time promotion you can take advantage of.

Set up your DBS Invest-Saver plan from now to March 31, 2024 to get a full rebate of up to S$125 on your sales charge.

2. OCBC Regular Savings Plan

Another convenient option if you prefer to stay within your bank's ecosystem is the OCBC Blue Chip Investment Plan. You can sign up for an account once you turn 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 S$100 a month and build a portfolio of Blue Chip stocks and 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
• NikkoAM-ICBCSG China Bond ETF

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

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

Otherwise, you pay a fee of 0.3 per cent 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 on the Share Builders Plan, which lets you invest for as little as S$100 per month, making your payments automatically through GIRO. It's open to those above 18 years old and also allows for joint account applications.

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, with a total of 13 to choose from. If you want real estate exposure, you can opt for REITs like Frasers Centrepoint Trust and MapleTree Pan Asia 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.

In terms of handling fees, the POEMS Share Builders Plan will charge you 0.3 per cent per annum of your Total Portfolio Value (TPV).

The minimum monthly charge is S$1, while the maximum is S$8.88/month if your TPV is under S$40,000 and S$5.88/month if your TPV is S$40,000 or more.

4. FSMOne Regular Savings Plan

Fundsupermarket or FSMOne offers a Regular Savings Plan that features 155 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). However, the selection can be overwhelming for beginners.

If you are investment-savvy but on a tight budget, FSMOne's ETF regular savings plan will suit you, as their minimum monthly investment amount is as little as S$50.

Their buying fee is 0.08 per cent, or a minimum of 1 SGD, 5 HKD or 1 USD, whichever is higher.

5. Saxo Regular Savings Plan

This regular savings plan from Saxo Markets lets you pick from one of four professionally managed ETF portfolios from BlackRock and Lion Global.

• Defensive — a low-risk portfolio focusing mainly on bonds, managed by BlackRock.
• Moderate — medium-risk, a blend of stocks, bonds, and alternatives, which balances growth potential vs not losing money. Also managed by BlackRock.
• Aggressive — high-risk, focusing mainly on stocks. Managed by BlackRock.
• Dynamic Growth: Asian Perspective — high-risk, focusing on Asia & emerging markets. Managed by Lion Global.

Similar to digiPortfolio by DBS and other robo advisors, Saxo's RSP lets you invest in ready-made portfolios rather than make you 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 0.75 per cent service fee (charged quarterly on a pro-rata basis), which works out to $0.75 per month if you're investing $$100 monthly or $$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.

FSMOne's Regular Savings Plan offers the best range of global indices. So, if your priority is having a good selection of ETFs, this would be the best fit for you.

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 digiPortfolio by DBS and other robo advisors in Singapore.

Which is the cheapest Regular Savings Plan? That depends on a few factors, such as what you're investing in and the size of your investments. Let's examine a case study to find out more.

Case study: Investing S$100/month with a regular savings plan

Let's look at the case study of a regular bloke named Bob, who's 30 years old and ready to start investing. He earns S$3,000 a month and can set aside S$100 for investments. Here’s how much he would pay to use a regular savings plan:

Regular savings plan	Transaction fees	Fee for S$100 investment
Saxo Regular Savings Plan	0.75per cent p.a. service fee (charged quarterly on a pro-rata basis)	S$0.75
FSMOne Regular Savings Plan	0.08per cent (min. 1 SGD, 5 HKD or 1 USD, whichever is higher)	1 USD ≈ S$1.35
DBS Invest-Saver (Bond ETFs)	0.5per cent	S$0.50
DBS Invest-Saver (Equity and REIT ETFs)	0.82per cent	S$0.82
OCBC Blue Chip Investment Plan	0.88per cent if you’re below age 30. Otherwise, 0.3per cent or S$5 per counter, whichever is higher	S$5
POEMS Share Builders Plan	0.3per cent (min. S$1 per month)	S$1

The cheapest options for Bob would be the DBS Invest-Saver or Saxo Regular Savings Plan. With the DBS Invest-Saver, he'll be paying a modest S$0.50 to S$0.82 per month.

It limits him to just four local ETFs, which is fine for now but may feel restrictive in the future as his investment knowledge grows.

If Bob decides that he would prefer to invest in a global ETF portfolio instead of limiting his investments to the Singapore market, he might opt for the Saxo Regular Savings Plan and pay a reasonable S$0.75 per month or S$9 per year.

However, choosing the right regular savings plan for you isn't just about comparing transaction fees. Another consideration is the range of ETF choices.

More isn't always better — with 155 worldwide ETFs to choose from for the FSMOne Regular Savings Plan, it could be a tad overwhelming for a beginner like Bob.

We also want to highlight other fees you might end up paying that could eat into your investment gains. For example, the POEMS Share Builders Plan has dividend charges that nullify any small dividends you receive:

• If the dividend amount is less than S$1, you pay the full dividend amount in dividend charges. So you get nothing!
• If the dividend amount is S$1 or more, you pay one per cent in dividend charges with a minimum of S$1 and capped at S$50. So you have to get more than S$1 in dividends to receive any cash at all.

What about other banks' regular savings plans?

Citibank, HSBC, Standard Chartered, and UOB also have Regular Savings Plans. However, their offerings only let you invest in unit trusts.

Unit trusts, also known as mutual funds, are somewhat like ETFs. Both consist of a collection of investment assets, allowing you to invest in a diversified basket of assets without having to spend a fortune.

The difference is that a unit trust is a portfolio that is being actively managed by a professional fund manager who has to make decisions about the fund allocation constantly. This means some of your money will go into paying hefty fund managers' fees.

Meanwhile, ETFs are passively managed baskets of assets. Asset allocation is automatic and based on the composition rules of the ETF. They also have fund managers' fees, but these are much, much lower.

ETFs are generally more economical for beginners who can hold their investments for a long time. However, some people might prefer unit trusts as fund managers can strategically manage their portfolios in hopes of producing gains in tough economic times.

ALSO READ: Interest rates and returns for Singapore Savings Bonds (SSB) in January 2024

This article was first published in MoneySmart.