I just opened an investment account with Fundsupermart on last Tuesday. On the next day, I received a phone call from Fundsupermart to verify my information. On Saturday, I received the password slip from courier service. Now, I can get started to invest in unit trust online.
In this post, I will show you how to make use of their Regular Saving Plan.
What is Regular Saving Plan (RSP)?
RSP is not something new. If you have invested with other unit trust companies before such as Public Mutual and CIMB, it is known as the monthly regular purchase of unit trust funds, through bank auto deduction, GIRO or standing instruction.
Why invest using RSP?
There are several benefits to invest using RSP:
1. The Regular Savings Plan (RSP) utilizes the dollar cost averaging (DCA) concept of investing which is the practice of investing a fixed amount of money regularly regardless of market conditions. In the case of RSP, the investments take place monthly. Using a fixed amount of say RM500/month, you will buy fewer units when the market is soaring high. But when the market is down, you will be able to buy more units because the fund price is lower. You will end up with a lower average purchase price overall.
2. When you participate in RSP, you’ve triggered a system to automatically invest your money. As human being, we need an automated system to do something good for us in the long term. In this case, our saving is long term, disciplined and automatic.
What is so special about Fundsupermart RSP?
Since you can practically do standing instruction to invest regularly with any unit trust company, why choose Fundsupermart?
Here are some benefits Fundsupermart provides:
1. The sales charge is much lower, only 2% maximum for loaded funds, vs. 5.5% maximum front load at most fund houses.
2. You don’t need to invest at least RM1000 in a single fund as initial investment. At Fundsupermart, you can start with as low as RM100/month.
3. You can do all this entirely online.
4. Some banks impose a fee (normally RM1-2) for every transaction of direct debit, but Fundsupermart absorb the fees and we as investor don’t need to pay the extra fees for the transaction.
How to apply RSP?
Step 1: Open an account with Fundsupermart.
Obviously, you need to have an investment account with Fundsupermart before you can proceed with RSP. Please refer this page for account opening.
Step 2: Apply for RSP
Click “Apply” under “Regular Saving Plan” menu.
Step 3: Select the fund
If you don’t know which fund to start with (there are more than 100 funds to choose from), just take a look at the list of recommended funds in your account.
Step 4: Read the prospectus
It is a requirement that investor read the prospectus before making any investment decision.
Step 5: Choose a payment method and set the monthly amount
You can choose to deduct automatically from your bank account (only Maybank or CIMB) or the money you’ve transfer to Fundsupermart that’s parked in Cash Management Fund.
Remarks:
– it is easier to use Maybank direct debit because they accept the printed form. As for CIMB, you will need to get the original form from the banks.
– Maximum DDA Limit – I’ve called Fundsupermart regarding this. It is an amount that determine how much can Fundsupermart debit from your account for investment. For example, if you set the limit to RM100, and now you are investing RM100/month in RSP, when you want to setup another RSP for a second fund, you will have to fill up the DDA form again. If you set a higher limit say RM500/month, when you want to setup another RSP, you will not be required to email them the DDA form again. This is just for your own convenience.
Step 6: Print the Direct Debit Authorisation (DDA) form
You shall print out the form, scan and email to clienthelp.my@fundsupermart.com.
Update on 24th March 2010:
Fundsupermart just called me the softcopy form won’t be accepted by banks.
So you will have to mail the physical form to their address at
iFAST Capital Sdn. Bhd.
Level 29, Menara Standard Chartered,
No. 30, Jalan Sultan Ismail,
50250 Kuala Lumpur.
Important note:
- When you fill up the DDA form of Maybank, make sure the amount you are filling in is the limit you set for the Fundsupermart. Let’s say you fill in RM500 per month, you are allowing Fundsupermart to deduct RM500 per month to invest in the various funds you choose. Although you might have only applied to invest RM100/month in Fund A, they will still deduct RM100 only, not RM500 (which is the maximum limit you set)
- Don’t tick “unlimited” because it is not yet supported.
That’s all you have to do now. Fundsupermart said that they will take at least 1-2 months to get your RSP application due to the time needed for your signature verification at the banks.
Happy investing!
Disclaimer:
This article is not to be construed as an offer or solicitation for the subscription, purchase or sale of any fund. No investment decision should be taken without first viewing a fund’s prospectus. Any advice herein is made on a general basis and does not take into account the specific investment objectives of the specific person or group of persons. Past performance and any forecast is not necessarily indicative of the future or likely performance of the fund. The value of units and the income from them may fall as well as rise.
31 replies to "Fundsupermart Regular Saving Plan"
HI, KC,
In the market got any fundhouse better than this fundsupermart?
Hi, Mr Lau,
FSM supermart funds and public mutual funds, which are the top ten funds? I prefer public small cap and public bank growth fund. But CIMB asia pacific dynamic income fund also good. Can you let me know which one is better? I dont mind if you can enlighten me with your choice of funds.
Thank you
Hi KC,
Thanks for the tips. Would like to check is it still good by using Fundsupermart as our platform for UT investment as your message was 6 years ago?
To save transaction cost, Fundsupermart is still the best offer you can get.
TQ KC
I think i will play safe. Less risk and long term.
For equity fund, in the short term is high risk but long term is low risk.
For bond fund, in the short term is low risk but long term is high risk.
Generally, younger people can withstand higher risk.
Hope this few words is useful for you.
Hi KC,
Thanks for sharing. I recently stumble upon your blog while looking for housing loan. Bought ur book on Money Tips and gave it to my friend when finished reading it and bought 2nd Edition for myself.
For a beginner investor, should i look for less risky investment like fixed income or bond fund??Then gradually invest higher risk?Meaning that investing into several fund?
Thanks!
@winston,
I don’t have an “absolute” answer for your question, because investing style and strategy depends on the person’s ability, risk profile, investment objective, investment horizon .. etc everyone is different.
Hi Winston, if you would like to assess your investment risk profile, feel free to contact me. Thanks.
[…] 2. Regular saving plan application […]
Hi KC and all,
I’m new to investing, and it seems to me that Fundsupermart’s RSP is a good way to get started. I just have a few questions:
1. What’s the risk like? If the funds perform poorly, is my capital guaranteed?
2. I know that KC says that the annual returns are somewhere between 5 and 15%, but what are the usual returns like for readers here who have invested in an RSP before?
3. Are there any penalties for pulling out of the RSP? Fundsupermart says something about a freeze period, but I’ve no idea how long this is in effect for.
Thanks all!
Kenneth
Regarding your questions:
1. the risk? It depends on which fund you invest in. Equity fund will be higher risk compared to fixed income or bond fund. The capital is never guaranteed in an investment.
2. anyone want to share about your returns?
3. there is no exit penalty.
Thank you John for the info of the fees.
Just wondering whether epf can allow the withdrawal to go directly to Fundsupermart.com to pay for the unit trust purchased. I thought epf’s current option is to directly pay to the fund manager of the respective unit trust company. Correct me if i’m wrong.
Ya, the procedure is to fill in an EPF investment form to withdraw money to invest in unit trust. EPF will directly transfer the money to fund manager. Even when you sell the unit trust using EPF scheme, the proceeds will go to EPF account also. Since you cant withdraw the money until 55 y/o, investing your EPF in unit trust can give you higher return in the longer term.
Also, EPF allow you to withdraw every 3 months to invest in unit trust, so you can see it as dollar cost averaging by investing regularly every 3 months.
Hi Suzanne,
Withdrawing EPF to invest in unit trust, the service charge is lower, which is 3% as regulated by EPF compared to using cash to invest which is 5.5% service charge. Management fee and trustee fee is about 1.5% and 0.06% per year respectively and calculated daily and reflected on the daily unit price.
Thanks for your update. So useful to me as i am thinking to start investing in Unit Trust and found out that how come the Services Fee/Management fee/Trustee Fee are so high as imposed by the Bank. i plan to withdraw EPF money from Account 1 and use Fundsupermart.com to invest in the unit trust market. What is your advise ?
Thank You.
Go ahead.
Hi KC, just wandering if I want to invest in more than one UT, say RM100 each monthly, do i need to open 2 RSP?
If you have set the maximum limit higher (let’s say RM500/month), then it is just a matter of applying for another RSP to invest in another fund. So the total deducted is RM100+RM100 = RM200/month.
The DDA form just need to be submitted once. If you only apply the maximum RM100 the first time, you will have to submit the DDA form again to apply for a higher deduction allowable.
I am new to this, but thank you for sharing. The way I look at is, is like forcing me to save some money to my account, which is good. I do think it hassle free as I do not have to go to bank to make a transaction. For a person who lives far away from town, it good. Thank you so much for sharing
Just wonder does Fundsupermart offer personalised service to its fundholders? For example, provide regular update, personalised advice and financial planning services?
Hi John,
As we know, you won’t have a personal unit trust agent to serve you. But if you need anything, you can email them directly and I think they will reply your request.
They do have a regular weekly news update and fund recommendation via email. They also send their in house magazine quarterly to their investors.
Dear Mr. Lau,
Thanks al lot for sharing the financial tips towards better informed decison for higher yielding in the investment.
Your kindness in updating the financial knowledge of public is very much appreciated and please keep up the good practise.
Have a wonderful day!
TQ.
K.Sukumaran.
Another great tips!
Anyway, few weeks ago, an insurance agent approached me and proposed a 5 / 10 years saving plan. The monthly premium is quite high, which is either 500 or 1000..
I wish to know ur view in this type of plan. I tried to search ur blog but didnt find much info.. or is it similar to GreatJunior Advantage Series ?
thx
Without looking at the quotation, I just guess that it shall be similar to GJA.
It is very effective in forcing you to save money, although the return is conservative.
Hi KC,
First of all, i would like to say thank you for sharing all the knowledge you have with us.
I just started reading your web and already bought one of your book.
Really useful for me.. 🙂
One question about fundsupermart.com, how do i make withdrawal in the future?
For the time being, i don’t have any unit trust account i was thinking of opening one.
Hope you can advice me..
Thanks KC..you’re the great..
When you decided to withdraw the money from Fundsupermart, you can initiate it within your account.
The money will be deposited to your bank account.
Thanks, good info. But what sort of returns do you expect from such investment, let say over a period of 2 years?
When I invest in unit trust, I treat it as one of the basket where I park my money. It wont make me rich in short term.
I expect the return in between 5-15% per annum.
Regular savings plan for Unit trust is the best method to make money from that sort of investments. It is a medium to long term kind of investment. Thanks for the share KC! ^^