facebookDBS Invest Saver vs FSMOne RSP for a beginner - which is better? Is it better to invest in ETFs or unit trusts? - Seedly

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Anonymous

08 Jun 2020

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General Investing

DBS Invest Saver vs FSMOne RSP for a beginner - which is better? Is it better to invest in ETFs or unit trusts?

Discussion (3)

What are your thoughts?

Tl;dr = If you already have DBS Multiplier Account, you should consider whether investing $100/month in DBS RSP increases your bonus interest earnings by more than the $0.82 transaction fee.

FSMOne RSP is generally cheaper for investment amounts greater than $100/month, but another consideration may be that investing with DBS Invest Saver counts towards bonus interest on DBS Multiplier Account.

So if you have a DBS Multiplier Account, and (a) credit your salary/dividends to DBS, (b) spend on a DBS credit card, and (c) invest $100 with DBS Regular Savings Plan every month, you get a respectable interest rate of 1.8-2.3% p.a. depending on your total transaction amount (though DBS may follow other banks in nerfing this rate).

If you have more than 3K in the DBS Multiplier Account - which you should to avoid $5/month "fall below" fees - and your $100/month investment through DBS RSP is the transaction category that qualifies you for the bonus interest rate of 0.4% p.a. (you could use home loans or insurance to qualify for bonus interest), the amount you earn in bonus interest ($1) should exceed the 0.82% fee DBS charges for $100 RSP ($0.82/month).

(Of course, the precise amount you earn in bonus interest will vary depending on (a) the exact amount in the Multiplier Account, (b) how many categories of transactions you have with DBS (does investing get you 0.2% or 0.4% bonus interest?), and (c) how much you invest with DBS (greater investment amounts = higher fees).)

If you're investing more than $100, you should consider whether the FSMOne RSP fee rate of min. $1 per transaction (or 0.08% for transactions greater than $1200/month) is cheaper than the DBS fee of 0.82% (it probably is). See the following link for more details: https://blog.seedly.sg/which-regular-savings-pl...

As for the decision between ETFs and unit trusts, that really comes down to your risk tolerance, investment strategy, and decision on how much you want to pay in management fees.

P.S.: DBS is presently offering up to $125 rebate on transaction fees for Invest Saver for new sign ups from May 1 to July 31: https://www.dbs.com.sg/personal/promotion/inves...​​​

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Invest Saver has one of the lowest fees when it comes to RSP w no minimum fees. However it only has 4 ETFs which you can invest in. FSMOne has a miminum fee of SGD1 but offers a lot more ETFs, including overseas ones. If you intend to only invest in SG ETFs, go DBS - IS.

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