Time for a simple comparison between OCBC and Phillip regular fixed-dollar amount investment plan. Been wanting to embark on index investing because it seemed so easy via OCBC or Phillip Capital?

Hold on for a second.

Let’s assume a simple scenario of buying a single counter (STI ETF) monthly for $100, the minimum investment sum via OCBC Blue Chip Investment Plan (BCIP) and Phillip Share Builders Plan (SBP).

Fee & Charges

OCBC BCIP – 0.30% or S$5 per counter, whichever is higher
Phillip SBP – S$6.42 (inclusive of GST at 7%) for Total Investment amount <= $1000
Winner – OCBC (need to pay $5)

What if we’re investing $1000 monthly instead?

Fee & Charges
OCBC BCIP – 0.30% or S$5 per counter, whichever is higher
Phillip SBP – S$6.42 (inclusive of GST at 7%) for Total Investment amount <= $1000
Winner – OCBC (need to pay $5)

Dividend Charges

Seems like both of them charges a 1% on net dividend.
For Phillip Capital, it is stated on their PDF file they charge 1% on net dividend.
For OCBC, one of my readers brought it to my attention, although I’m not sure where the source is. that they don’t have dividend charges after he/she spoke to the bank officer.

Penalty Fee for Insufficient Funds

OCBC BCIP – No fee
Phillip SBP – $5.35 (Inclusive of GST) 
Based on my simple comparison, looks like OCBC is the better deal here in terms of net expense incurred. Of course, you can’t compare this to Standard Chartered Online Trading Platform which charges a measly 0.2% only – that’s only 20 cents per $100, or $2 per $1000. 
They don’t sell in odd lots though, so you’ll probably need to save up for a few months to make a purchase. As it stands now, if you save $100 each month, you can make a STI ETF purchase every 3 to 4 months.
For a small monthly investment sum of money, the fees are absolutely going to kill you. If you have the discipline, do it yourself via Standard Chartered.

I’ll make it even worst for you, and show you just how bad a deal we’re getting here in Singapore. Take a look a Betterment, a monthly investment plan based in the US.

Betterment
Monthly Deposit – $100/month minimum
Annual Fee – 0.35%
Looks ordinary. But wait, I have not revealed what the portfolio is.
Is it a single ETF? Nope.

When you deposit money with Betterment, it is seamlessly invested in a blend of two baskets – Treasury Bond Exchange Traded Funds (ETFs) and Stock Market ETFs. 

Stock Market Basket
25% VTI: Vanguard Total Stock Market
25% IVE: iShares S&P 500 Value Index
25% VEA: Vanguard Europe Pacific (EAFE)
10% VWO: Vanguard Emerging Markets
8% IWS: iShares Russell Midcap Value Index
7% IWN: iShares Russell 2000 Value Index

Treasury Bond Basket
50% TIP: iShares Barclays TIPS Bond Fund
50% SHY: iShares Barclays 1-3 Year Treasury Bond Fund

All these, for $100 a month, at 0.35% annual fee. 
Only.

More Than Index Investing

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