Invest In 4 SGX ETFs With DBS / POSB Invest Saver (Review)

DBS POSB Invest Saver Review

You may have heard over and over again to invest in the STI ETF.

But how exactly can you invest in it?

With the DBS / POSB Invest Saver, you are able to dollar cost average into different unit trusts and ETFs, like the STI ETF. What’s more, you only need $100 to start!

Here’s how this regular savings plan works.

What is Invest Saver?

The DBS / POSB Invest Saver is a regular savings plan that allows you to dollar cost average into Unit Trusts or Exchange Traded Funds (ETFs). You are able to start investing from $100 a month.

You may be wondering if the DBS Invest Saver is the same as POSB Invest Saver. In fact, both DBS and POSB are actually the same bank!

As such, both the DBS and POSB Invest Saver are exactly the same. They only differ in terms of the branding.

Invest Saver is different from DBS DigiPortfolio

Invest Saver is a regular savings plan while DBS DigiPortfolio is a robo-advisor.

They differ from each other based on:

  1. Investment strategy
  2. Minimum sum required
  3. Fees charged

Even though they are provided by the same bank, they are 2 very different services.

How does Invest Saver work?

To start investing with Invest Saver, you will need to consider 2 things:

  1. Which Unit Trust or ETF do you want to invest in?
  2. What is the monthly amount you wish to invest?

The minimum amount to invest is $100 each month, and you can invest in further multiples of $100.

The funds will be deducted from your account on the 15th day of every month.

If the 15th is a Sunday or a Public Holiday, it will be deducted on the next business day.

POSB DBS Invest Saver Deduct Amount

No fractional units for ETFs

When you invest using Invest Saver, you will only be able to buy whole units of the ETF.

As such, Invest Saver will buy the maximum amount of units possible with the amount that you’ve invested.

For example, you invested $100 each month, and the ETF that you want to buy costs $10.

Including the fees (0.5%), you can only buy a maximum of 9 units.

9*$10 + 0.5% * 90 = $90.45

You will be refunded $9.55.

Your refund will be credited to your account a few days later.

POSB DBS Invest Saver Refund

However, if you wish to purchase unit trusts, you are able to purchase fractional units. This means that your entire investment amount will be invested into the unit trust!

What are the counters that I can invest in with Invest Saver?

There are two types of products that you can purchase with Invest Saver:

  1. Exchange Traded Funds (ETFs)
  2. Unit Trusts

Exchange Traded Funds (ETFs)

Most of you will use Invest Saver to invest in ETFs. There are 4 ETFs that you can choose to invest in:

ETF NameTickerType of ETF
Nikko AM Singapore
STI ETF
G3BSingapore Equity ETF
ABF Singapore
Bond Index Fund
A35SGD Fixed Income ETF
Nikko AM SGD Investment
Grade Corporate Bond ETF
MBHSGD Fixed Income ETF
Nikko AM-StraitsTrading
Asia ex Japan REIT ETF
CFAREIT ETF

The 2 most popular ETFs are the Nikko AM STI ETF and the ABF Singapore Bond Index Fund.

A35 and MBH both invest in bonds, so which one is better for you? You can view my head-to-head comparison of A35 vs MBH.

Since you are purchasing into ETFs, you will also have to consider the expense ratio of the fund.

An expense ratio is the fee that you are required to pay the fund manager for managing the ETF.

This expense ratio will be deducted from the net asset value of each unit of the ETF.

This will be an additional cost on top of the transaction fees that you’ll have to pay.

Here are the expense ratios for the 4 ETFs:

ETF NameExpense Ratio
Nikko AM Singapore
STI ETF
0.3%
ABF Singapore
Bond Index Fund
0.25%
Nikko AM SGD Investment
Grade Corporate Bond ETF
0.27%
Nikko AM-StraitsTrading
Asia ex Japan REIT ETF
0.6%

The Nikko AM-StraitsTrading Asia ex Japan REIT ETF has the highest expense ratio of 0.6%. The other 3 ETFs have around a similar expense ratio.

You may want to reconsider investing in the REIT ETF as a 0.6% expense ratio is pretty high.

Unit Trusts

You are also able to invest in Unit Trusts using Invest Saver.

There is an extensive list of funds that you can choose from.

However, I would like to caution you against jumping into investing with Unit Trusts.

Invest Saver seems to be heavily promoting Unit Trusts instead of ETFs. I believe this could be due to the higher commission that DBS receives if you invest in a Unit Trust.

revenue

Moreover, Unit Trusts are very complicated products.

There are a lot of underlying fees, and they are usually actively managed funds.

If you are a beginner investor, I would recommend to start with ETFs first. They are passive instruments and have a lower cost too.

When you become more familiar with Unit Trusts, then you may consider purchasing these products instead.

If you would like to find out more about unit trusts, you can view one opinion about them below:

What kinds of funds can I use to invest into Invest Saver?

Here are the type of funds that you can invest in Invest Saver, depending on which product you choose:

ProductTypes of Funds
ETFsCash only
Unit TrustsCash
SRS

It is possible to invest your SRS funds using Invest Saver. However, you are only able to purchase unit trusts with your SRS funds, and not ETFs.

How do I set up my Invest Saver account?

To set up an Invest Saver account, you will need to have either a DBS or POSB account.

Here’s a step-by-step guide to set up your Regular Savings Plan via the iBanking platform.

#1 Go to Invest → More Investment Services

POSB DBS Invest Saver Set Up RSP 1

#2 Scroll down and select ‘Set Up Exchange Traded Fund Regular Savings Plan’

POSB DBS Invest Saver Set Up RSP 2.1
POSB DBS Invest Saver Set Up RSP 3

You may want to check that ‘ETF’ is selected for the ‘Asset Class’ field.

#4 Select the ETF you want to RSP into and click ‘Buy’

POSB DBS Invest Saver Set Up RSP 4

You can select ‘INFO’ to view more information about the ETF as well.

#5 Input the necessary details

You will need to select your debiting account.

POSB DBS Invest Saver Set Up RSP 5.1

The debiting account can be any DBS or POSB account under your name.

You can use a joint-alternate Current or Savings account as well. However, the Invest Saver plan will be under your name.

You will then need to select the monthly investment amount and your tax status.

POSB DBS Invest Saver Set Up RSP 6

The minimum monthly investment amount is $100. You can invest in further multiples of $100.

Before applying, you can view more information about the product.

POSB DBS Invest Saver Set Up RSP 7

#6 Confirm your details

POSB DBS Invest Saver Set Up RSP 8

After confirming this step, your application will be processed.

POSB DBS Invest Saver Set Up RSP 9

You should receive a confirmation email once your application has been approved.

DBS POSB Invest Saver Successful Application Email

Even though you applied for an ETF RSP, it will still be referred to as a Unit Trust RSP.

How do I change the amount or cancel my Invest Saver plan?

The first 2 steps are similar if you wish to change the amount or cancel your RSP.

#1 Go to Invest → More Investment Services

POSB DBS Invest Saver Set Up RSP 1

#2 Scroll down and select ‘View or Delete Regular Savings Plan (RSP)’

DBS POSB Invest Saver Delete RSP 1

#3 Select your Investment Account

DBS POSB Invest Saver Change RSP 2

#4 Amend or delete your RSP

When you scroll down to your RSP, you can choose these 2 options:

Amend your RSP

1. Click on the Pencil icon
DBS POSB Invest Saver Change RSP 1
2. Change your monthly investment amount
DBS POSB Invest Saver Change RSP 3

However, you can only change the amount in multiples of $100.

Cancel your RSP

1. Click the ‘Trash’ icon
DBS POSB Invest Saver Delete RSP 2
2. Confirm your deletion
DBS POSB Invest Saver Delete RSP 3.1

When you cancel your RSP, it does not mean that you have to sell your units!

You are still able to hold onto your units and receive the dividends.

How do I sell the units I have with Invest Saver?

You may decide to sell off some, or even all of your units that you have with Invest Saver.

Here’s how you can do it:

#1 Scroll down to your Investment tab and click on ‘Unit Trusts’

DBS POSB Invest Saver Sell Units 1

#2 Click on ‘Sell’

DBS POSB Invest Saver Sell Units 2

#3 Select the number of units to redeem

DBS POSB Invest Saver Sell Units 3

How much does Invest Saver charge?

Invest Saver will have a sales charge for each transaction you make. This includes both buy and sell orders.

Here are the fees that Invest Saver charges:

Fund NameFee
Nikko AM Singapore
STI ETF
0.82%
ABF Singapore
Bond Index Fund
0.50%
Nikko AM SGD Investment
Grade Corporate Bond ETF
0.50%
Nikko AM-StraitsTrading
Asia ex Japan REIT ETF
0.82%
All Unit Trusts0.82%

If you are below 30 years old, the transaction fees for Invest Saver are slightly lower than the OCBC Blue Chip Investment Plan (0.88%).

However, if you are above 30 years old, Invest Saver’s 0.82% is a much lower fee.

If you wish to purchase ETFs via a regular savings plan, I would recommend to use Invest Saver instead of OCBC’s BCIP.

Moreover, you may want to note that the fees you’re paying include both the transaction fee and the expense ratio!

Having these fees will eat into your returns. It is very important for you to consider if it’s worth investing in Invest Saver given these costs.

How will my dividends be credited?

The ETFs that you invest in may issue dividends.

For example, the NikkoAM STI ETF will give out dividends every 6 months.

If you would like to track your dividends in a single platform, you may want to consider StocksCafe.

Normally, the dividends will be issued per unit of the ETF that you own. You should receive your dividends one day after the distribution date.

POSB DBS Invest Saver Dividend Credit

Changing your dividend crediting account

You are able to choose the account that you would like the dividends to be credited to.

You can do this either on the web or mobile platform.

#1 Web Platform

Similar to last time, you will need to go to ‘Invest → More Investment Services‘.

Then you’ll need to scroll down to ‘Change Dividend or Maturity Instructions for Unit Trust or ETF’.

POSB DBS Invest Saver Change Dividend Web

After selecting your investment account, you’ll need to click on the pencil icon.

POSB DBS Invest Saver Change Dividend Web 2

You will then be able to select which POSB or DBS account you would like the dividends to be credited to.

#2 iBanking App

You are able to use the mobile banking app to change your dividends too.

You would need to scroll down to your investments and select ETF / Unit Trusts.

DBS Invest Saver Change Dividend Credit App 1

Afterwards, select ‘Dividend Crediting‘.

DBS Invest Saver Change Dividend Credit App 2

You are then able to choose the account to credit your dividends to.

DBS Invest Saver Change Dividend Credit App 3

What is the performance of Invest Saver?

When you are investing using Invest Saver, you are investing in an individual ETF or Unit Trust.

As such, the performance of your Invest Saver plan depends on the performance of that ETF or Unit Trust you’ve purchased.

If you are buying into an ETF, your risk is rather diversified.

This is because your are buying into a basket of stocks. As such, the performance of the investment depends on a few stocks, rather than just one stock.

pie chart

You can’t really go wrong with either the STI ETF and the ABF fund. Both of them are relatively risk-free products. Moreover, you wouldn’t be tempted to check your stocks everyday since they have a rather steady return.

However, I would still recommend you to research into each ETF before you invest in it!

Should I invest in the Nikko STI ETF or ABF Fund using Invest Saver?

The 2 most popular ETFs that most people would invest in are the STI ETF and the ABF Bond Fund.

The STI ETF invest in equities (stocks) while the ABF Bond Fund invests in bonds.

As such, the ETF that you choose depends on your:

  1. Time horizon
  2. Risk profile

Here’s what I would recommend you to choose, based on these 2 factors.

Invest in the STI ETF if you have a larger risk appetite

If you are able to take a higher risk and have a longer horizon, then the STI ETF will be the better choice.

The STI ETF will provide you with higher returns overall. However, it will have more volatility compared to the ABF fund.

Invest in the ABF Bond Fund if you have a lower risk appetite

If you are not willing to take a lot of risks, the ABF Bond Fund may be a better option for you.

This is because the ABF fund invests in bonds, which are fixed income products.

This makes it less of a risk compared to investing in the STI ETFs, which invests in stocks.

You shouldn’t invest in ETFs if you’re saving up for a short-term goal

If you are saving for a short-term goal, placing them in an ETF may be a bit too risky for you.

Instead, you may want to consider leaving it in an insurance saving plan. Some examples include GIGANTIQ or the SingLife Account.

Can Invest Saver be used for DBS Multiplier?

If you create a new DBS Invest Saver after opening your Multiplier Account, it will count towards the Investment category.

For example, let’s say you are meeting both the Income and Spend categories.

With the Investment category, you are now able to have an additional eligible category.

This allows you to earn additional interest in your Multiplier Account!

POSB DBS Invest Saver DBS Multiplier Investment Category

However, the Invest Saver will only be recognised for the first 12 consecutive months.

After 12 months, you are no longer able to count your Invest Saver contributions towards the Investment category.

As such, I would recommend against setting up an Invest Saver just to earn that extra interest rate.

Investing is always risky, and you should be aware of the risks before starting an Invest Saver plan!

Can I transfer the units I bought using Invest Saver to my CDP account?

When you are investing using Invest Saver, your assets are in custody of POSB Bank.

This means that you do not have full custody of your shares.

Unfortunately, Invest Saver does not give you an option to transfer your shares to your Central Depository (CDP) account.

If you wish to eventually transfer your units to your CDP account, you may want to consider using the OCBC Blue Chip Investment Plan instead.

Is Invest Saver good?

Here are the pros and cons of using the DBS / POSB Invest Saver:

ProsCons
Able to start investing from $100Very poor user interface which makes
it hard to create and amend your RSP
Cheaper fees compared
to OCBC BCIP
Limited to only 4 ETFs
to choose from
Unable to transfer
to CDP account
DBS Multiplier promotion
only lasts for 1 year
SRS can only be used to invest in
Unit Trusts and not ETFs
Unable to purchase individual stocks like
OCBC BCIP or POEMS Share Builders Plan

Although the Invest Saver has many cons, it still is one of the most fuss free ways of starting your investing journey.

Conclusion

The DBS POSB Invest Saver is a good way for beginner investors to begin your investment journey. It is very fuss-free once you set it up, and it will instil that discipline in you to invest every month.

The returns that you receive will definitely be higher than leaving your money in the bank.

However, the ETFs offered by Invest Saver may not be the best investment. There are many investments out there that have much better returns.

undraw invest 88iw 1

If you are looking for a more diversified portfolio, you may want to consider investing using robo-advisors instead.

Nevertheless, the DBS / POSB Invest Saver is a great stepping stone for you. You are able to make your money work harder for you first, as you start to build up your investing knowledge.

Once you’ve gained more knowledge, you may want to consider other investments instead!

Cashback promotion for Invest Saver

You are able to receive a cashback promotion when you use the Invest Saver plan.

You will be able to receive full rebates on your sales charges, provided you set up an Invest Saver plan between the specified period.

However, there are some things you’ll need to take note of:

  1. You are only eligible for this promotion if you set up your Invest Saver plan during the promotional period
  2. You will have to use Invest Saver for at least 3 months before you are eligible for the cashback

For more information, you can view this promotion on DBS’ website.


undraw pcsocial 16rw

Do you like the content on this blog?

To receive the latest updates from my blog and personal finance in general, you can follow me on Telegram and Facebook.

0 Shares:
You May Also Like