OCBC Frank allows $100 investment a month for bluechip through them but there is a monthly fee of $5 . If i invest $100/month, I will make a lost by the end of the year. Is this common? Should I put in more going forward if not what should I do? - Seedly
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Anonymous

Asked on 17 May 2019

OCBC Frank allows $100 investment a month for bluechip through them but there is a monthly fee of $5 . If i invest $100/month, I will make a lost by the end of the year. Is this common? Should I put in more going forward if not what should I do?

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Daryl Liao, Fti
Daryl Liao, Fti
Level 7. Grand Master
Answered on 22 Dec 2019

It doesnt make numbers sense to do it. 5% loss every month.

Why not save up and do a Dollar cost average every quarter or half yearly?

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Bjorn Ng
Bjorn Ng
Level 9. God of Wisdom
Answered on 16 Dec 2019

Before you even invest, you are already losing 5%/month. By the end of 1 year, you would have lost 60/1000 = 6% nett, which is not feasible considering that STI ETF gives about 3% pa and REITs (the safer ones per say) gives about 4-5% pa. You are literally losing $ every single year.

2 options, is of course to invest more every month, or you can take a look at POSB InvestSaver. If I am not wrong, the sales fee is only 0.82% for POSB. That is way more feasible even at $100/month investment. You can read more about it here: https://www.posb.com.sg/personal/investments/other-investments/invest-saver

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Wilson Nid A Break
Wilson Nid A Break
Level 9. God of Wisdom
Answered on 22 Dec 2019

If you can only afford $100/month, then might as well avoid this scheme. Just because a scheme is out there, doesnt mean you had to utilize it

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Tan Wei Ming
Tan Wei Ming
Level 7. Grand Master
Updated on 07 Jun 2019

OCBC Monthly Investment plan is too expensive for someone who wants to invest $100 a month.

$5 out of $100 is alr 5% cost. That's too expensive!

Besides POSB InvestSaver, the other monthly investment plan that I will recommend is Maybank Kim Eng monthly investment plan. Do take a look!

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YewFong Chua
YewFong Chua

18 May 2019

I remember the amount that I started was $500 per month and I recall OCBC only charge me the first $5 transaction only. Subsequently, I was not charge for the $5. I guess only when you stop and sell away your share. The new charges will apply again. Do check with individual bank to understand better.
Pat Moan

07 Apr 2020

I totally agree
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Frankie Rappaport
Frankie Rappaport
Top Contributor

Top Contributor (Aug)

Level 9. God of Wisdom
Answered on 05 Mar 2020

-investing into single stocks is not a good choice for a retail investor (like me),

when even 'expert' active stock mutal fund managers over longterm mostly are evidenced to underperform by severals studies

-5/100 = 5% will be a super investment for OCBC, but if kept at that level a detrimental for the customer (at least that works like a mutual fund's inception fee, and 5% is ultra-high comparably)

-given the above: reconsider Your OCBC choice. Just as an example, You could, still with a certain stock market risk andwith much much lower fees self-invest into passive indexing stock ETFs using a cheap SG online broker (POEMS or FSMone qualify),

a reasonable start could be SP500 Index ETFs like VOO or IVV, or a global ETF like VT.

You need however generally a time horizon of at least 5 and better 10 years to see your success, because some crahes will come (then go), and the only credible thing is long-term performance

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Yen Peng
Yen Peng
Level 4. Prodigy
Answered on 26 Feb 2020

Was just reading up on this topic and found a useful comparison article by one from our Seedly Community: https://blog.seedly.sg/which-regular-savings-plan-is-the-cheapest/

Hope this helps! :)

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Geraldo L.
Geraldo L.
Level 7. Grand Master
Answered on 26 Feb 2020

It's good that you recognize that the high costs are eating into your returns and personally I feel that 5% is way too high. In your case, i would consider switching over to FSMOne or POSB investsaver to save on the costs. Every bit counts!

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MT2020
MT2020
Level 7. Grand Master
Answered on 26 Feb 2020

Its either you invest more to lower your monthly fee, or you can change to a different bank such as posb.

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Rais M
Rais M
Level 7. Grand Master
Answered on 26 Feb 2020

There are several such monthly investment plans in Singapore. Let's talk about the 2 major ones with DBS/POSB and OCBC.

POSB Invest Saver charges a fee of 1% (0.82% promo now) for investing with them. At $100 per month, we are looking at $1 or $0.82.

OCBC BCIP charges the minimum of 0.3% of the investment amount or $5. By investing $100 per month, it would trigger the minimum of $5 fees. However, if you were to invest $500 per month, it would be the same as POSB Invest Saver. And if you were to invest anything more than $500, OCBC will be the better option.

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You will need to calculate the actual opportunity cost associated with the charges as compared to the capital invested.

Thereafter, study your instrument to find out the projected and expected rate of return. Then deduct it off the fee to find out the net return.

Now, evaluate if the fee makes sense. If not, time to move on to a better investing vehicle.

Here is everything about me and what I do best.

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Choon Yuan Chan
Choon Yuan Chan
Level 9. God of Wisdom
Answered on 16 Dec 2019

You are already losing 5% due to commission. I would strongly recommend that you put in more loving forward to reduce the effect of the commission

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Brian
Brian
Level 4. Prodigy
Answered on 15 Nov 2019

Hi Anon,

Just a quick update! Maybank's Kim Eng Monthly Investment has already discontinued their services leaving DBS, Philips and OCBC as the only traditional choices!

I am on the same side as the others who have contributed, as your current investment amount seems low and expenses will hurt your monthly investments. You can consider snowballing your monthly savings (although it might defeat the purpose and I'm not sure if it is a practical method to do so), by contributing a larger amount each month or decreasing your frequency of savings. However, with the rise of alternative investment platforms, you might want to consider these alternatives for now if you decide to proceed with a $100 RSP!

Robo-advisor platforms can give you access to (globally) diversified portfolios depending on the choice of robo-advisor platforms. They usually charge a management fee (except for https://solutions.kristal.ai/seedlypost) and some might have restrictions on the minimum investment amount, so definitely do take note of that!

I think Seedly came up with a new updated article as well, hence you should check it out! (https://blog.seedly.sg/singapore-platforms-to-invest-fixed-monthly-savings)

All the best in your investment journey!

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If you want to invest in the STI ETF of $100 a month, it might be better to use POSB Invest Saver or Maybank Kim Eng monthly investment plan.

https://blog.seedly.sg/which-regular-savings-plan-is-the-cheapest/

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