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Drip of Dividends – Investing through Monthly Investment Plans in Singapore

It’s probably about the time of the year where some companies will be dishing out the Year End bonus or maybe all along had some spare cash and would like to find a more worthwhile way to invest it in a discipline and hassle free manner.

While there are many ways to make money work harder for you and me. I personally feel that one of the ways to automate it is to look at Monthly Investment Plans (MIP). As per my previous Drip of Dividends posts some months ago about coins to shares, I mentioned about the power of compounded investing. In this post, I would like to share about another semi-automated investment program which is dummy proof and can be self-administred monthly. It is termed the Monthly Investment Plan or some other fanciful name as what some of the program providers will term it.

Brokers and Banks with Monthly Investment Program

It is as simple as heading to the bank/broker to set up the account and fill up the Electronic Payment of Shares or monthly deduction from GIRO. All you need is to have a bank account and the trading account set up.

The benefit of such a program is the low trading fee which starts from SGD1.00 – different brokerage will charge the fees slightly differently. Also, do note that the monthly minimum investment sum is SGD100. Another two things to note is that the equities counter bought into will be in odd lots and credited into the custodian account with the brokerage/bank. As such, some might also levy charges or waive the charges for corporate actions – dividend payout, share split, scrip dividends or rights issue as the case maybe.

The idea is to allow you to start somewhere small and gradually grow the investment over time – this is what most financial advisers term as value investing. Where you set aside a fixed amount over a course of 5-10 years and watch it grow.

I have listed down the 4 different banks and brokerages that offer the mentioned MIP. Each brokerage has its own selection of shares which you can purchase as part of the monthly investment plan. However, do note that the pricing will vary for the custodian fees levied for foreign shares while local shares on custody are usually free – best to check them out individually.

Also, if at any time in the future, if you wish to transfer out the Singapore Listed shares to the CDP, you may do so via the brokerage/banks, subjected to CDP or bank charges as per the case maybe.

Maybank Kim Eng Monthy Investment Plan

 

Maybank Kim Eng MIP

Source: Maybank Kim Eng

 

Website: http://www.maybank-ke.com.sg/latest-offerings/listing/sgd0-commission-with-monthly-investment-plan/

Over 230 counters, 5 countries (Singapore, Malaysia, Thailand, Hong Kong and the United States of America)

OCBC Blue Chip Investment Plan

 

OCBC BCIP

Source: OCBC

 

Website: https://www.ocbc.com/personal-banking/investments/bluechip.html

A selection of 19 counters from the SGX

Philips Share Builder

 

Philips Share Builders Plan

Source: Philips Securities

 

Website: https://www.poems.com.sg/rsp/share-builders-plan.html

A selection of 29 counters from the SGX

POSB Invest-Saver

 

POSB Invest-Saver

Source: POSB

 

Website: https://www.posb.com.sg/personal/landing/invest-saver/index.html?pid=sg-posb-vanity-investments-investsaver

A selection of 2 counters from the SGX – Nikko AM Singapore STI ETF & ABF Singapore Bond Index Fund

The verdict

I would choose Maybank Kim Eng Monthly Investment Plan for the ultra low fee of SGD$1.00 per counter per month. Also because they offer a bigger variety of share counters and the list will update itself perioidcally with new counters. At the same time, they have brokers who maybe able to assist you to liquidate the shares if you wish to sell them – just my own personal experience when I tried their MIP program.

Some of the counters I would personally consider will the REITs or ETFs since it requires very minimal management as well as it allows me to maximise the leverage on dollar cost averaging on a monthly basis. Also, if I were to buy a minimum of 2 counters monthly, I also get my foreign listed equities under Maybank Kim Eng Custodian account under the KE Trade Pre-Funded account; which is SGD2 per counter per month.

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