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.
– 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 firstname.lastname@example.org.
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.
- 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.
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.