Regular Savings Plan
The financial market continues with its high volatility leaving the investors clueless on the direction it is heading towards for the future. Sovereign Debt Crisis at Europe, weak economic fundamentals at US, adverse weather conditions in certain parts of Asia, cooling down of Big Asian economies (China & India), inflationary pressures is Asian economies and volatile currency movements display uncertainties in the financial markets.
Options grow less when markets are heading south. Further with Asian economies experiencing higher inflation rates, interest income from fixed deposits aren’t sufficient to grow income on a long term period.
Regular Savings Plan
One of the popular strategies to maintain the course to long term investing is Regular Savings Plan (RSP) alias Monthly Investment Plan (MIP) or Systematic Investment Plan (SIP). RSP is a disciplined process of investment which involves a commitment of a fixed sum to be invested on a fixed date at a regular frequency irrespective of the market prices.
Regular Savings Plan with SBI
- No initial investment amount
- Investment Frequency – Monthly / Bimonthly / Quarterly / Half-yearly
- Minimum Monthly Amount: SGD 500 (Automatic deduction through GIRO from your SBI A/c)
- Minimum Commitment Tenor: 12 Months (recommended to maintain for 3 – 5 Years)
- Minimum Allocation to fund: SGD 200
- Deduction shall be made on 15th of every month, commencing with 1 month notice of Cash plans and 2 weeks’ notice for CPF Plans
- Flexibility to change the allocation amount, fund allocation during the course of the investment tenor
Benefits of Regular Savings Plan
- Primarily Dollar Cost Averaging
Dollar cost averaging is a well-proven and recognized tool in risk management, which advocates the exact opposite of dangerous market timing. The fixed amount of money allocated will buy more units when prices are low and less when prices are high. If invested over a long term investment horizon regularly, it will help in averaging out the market’s peaks and troughs.
With a GIRO process in place, customer can stop worrying about missing the schedule. The amount shall be automatically debited from the customer’s account and invested.
Customers can start with as low as SGD 500. Further you do not have to make a lump-sum initial investment too. Minimum allocation per fund would be SGD 200
- Fixed Front End Load
Generally the front end load is fixed at the initial stage for the entire period of the plan.
- Deduction date not amendable
Cannot time the market – the investment may not take place when the market has reached lower value. The investment shall be based on the NAV of the fund on the deduction date only.
- Non guarantee of the achievement of the investment objective
Your investment is still subject to market risk, hence neither the fund not the Bank can guarantee the achievement of your investment objective. However our Financial Advisers would keep you abreast on the performance of your portfolio and assist in the regular rebalancing, if required.
Investments products are not bank deposits or other obligations of, guaranteed or insured by State Bank of India, or any of their affiliates, or by any local government or insurance agency, and are subject to investment risk, including the possible loss of the principal amount invested. Investors investing in funds denominated in non-local currency should be aware of the risk of exchange rate fluctuations that may cause a loss of principal. Past performance is not indicative of future performance. Any forecast of prediction of markets or economic trends, which are targeted by a unit trust is not necessarily indicative of the future or likely performance of the unit trust. Prices can go up or down. Unit Trusts are not available to US Persons and may not be available in all jurisdictions.
This document is published for information and general circulation only and does not have regard to the specific investment objectives, financial situation and particular needs of any specific person. Investors should seek advice from a financial adviser regarding the suitability of the investment products, taking into account the specific investment objectives, financial situation or particular needs of each person before making a commitment to purchase the investment product. In the event an investor chooses not seek advice from the financial adviser, he should consider carefully whether the investment product is suitable for him. This document is prepared by State Bank of India (“SBI”), and the opinions expressed herein are subject to change without notice and may involve a number of assumptions, which may not be valid. Although the information contained herein has been taken from sources that are believed to be accurate, no warranty or representation is made as to its correctness, completeness or accuracy. SBI accepts no liability whatsoever for any direct, indirect or consequential loss arising from any use or reliance of this document which does not have any regard to the particular needs of any person.