With one simple decision to start a Citibank Regular Savings Plan, your regular savings can go towards achieving those important long-term goals - your family's next home, your children's future education, or maybe retirement.
By setting aside a small amount on a recurring basis, you would have made a regular investment that is accumulative in effect. Further it allows you to make use of the popular dollar cost averaging principle.
- Cash savings does not necessarily beat inflation. Inflation can erode the purchasing power of your cash savings. Therefore you may wish to consider diversifying into investments such as bonds and equities, which may beat inflation by a substantial margin over the long term.
- The Citibank Regular Savings Plan will enable you to access an extensive array of investment opportunities that are often out of reach from investors of smaller amounts.
- Enjoy the flexibility of being able to choose from tenures of a 1, 3 or 5 year savings plan or even an alternative tenure that may best suit the timing of the financial goals you are striving to achieve. For example, you may choose to time your Citibank Regular Savings Plan to mature when your child turns 18 years old, and is able to use the savings for university fees.
- Free up valuable time that you may otherwise spend monitoring the markets for investment opportunities.
How does It Work?
A Citibank Regular Savings Plan is able to benefit from the popular investment principal known as Dollar Cost Averaging. This is an investment strategy whereby you decide to invest a fixed amount of money at regular intervals over a longer period of time. It is recognized as one of the best techniques to overcome the effects of market fluctuations.
With dollar cost averaging, you would have purchased more units of an investment when the price is lower and fewer units when the price is higher. This would average out the overall cost of your investment.
This is an investment strategy that may offer some insulation against changes in market price.
A regular monthly investment of $1,000 is made and units of an investment fund are purchased at market prices (shown below in table).
|Illustrating how prices may decrease before increasing|
|Total monthly investment: $1,000 x 12 = $12,000
Total number of units purchased: 296.29
Average cost to you per unit over 12 months: $12,000/296.29 = $40.50
The figures in this table are not based on the performance of specific investment funds and are for illustrative purposes only. They do not represent any actual or anticipated performance of any funds and are not based on actual or anticipated fund prices.
Benefits of this Strategy
- In this example, the average cost per unit of $40.50 is lower than the market price in 7 of the 12 months
- This strategy involves one simple decision at the beginning - to invest $1,000 per month, without having to consider or monitor the general fluctuation of market prices for the rest of the year
- Without any further effort on your part, your investment is able to take advantage of the market when unit prices are low, resulting in an overall cost that may be more favorable than trying to time the market in the long run
What are my risks?
The Dollar Cost Averaging principle of investment in a Regular Savings Plan does not promise a profitable outcome nor does it protect the investor against losses in a continuously falling market.
This technique however, does remove much of the decision making elements of how to invest and when to invest.
Click on to expand and on to minimise the details.
What you will need
- Minimum US$5,000 (or equivalent)
- Minimum monthly subsequent investments of US$1,000 or more.
Investment products are not bank deposits, nor obligations of, nor guaranteed by Citibank Singapore Ltd, Citibank, N.A., Citigroup Inc. or any of its affiliates or subsidiaries, and are subject to investment risks, including the possible loss of the principal amount invested. Investment products are not insured products under the provisions of the Deposit Insurance and Policy Owners' Protection Schemes Act 2011 of Singapore and are not eligible for deposit insurance coverage under the Deposit Insurance Scheme and are not insured by the Federal Deposit Insurance Corporation.
Past performance is not indicative of future results and prices and values can go up or down. 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 when foreign currency is converted back to the investors' home currency. Investors should therefore determine whether any foreign currency investment is suitable for them in the light of their personal investment objectives, financial means and risk profile. All subscriptions for Investment Products must be made on application forms accompanying the prospectus. Prospectuses are available from Citibank Singapore Ltd and the Fund Managers' offices.
Investors should read the prospectus before deciding whether to subscribe for or purchase units in the Investment Products. This document does not constitute the distribution of any information or the making of any offer or solicitation by anyone in any jurisdiction in which such distribution or offer is not authorized or to any person to whom it is unlawful to distribute such a document or make such an offer or solicitation. Investment products are not available to U.S. persons and may not be available in all jurisdictions. Citibank full disclaimers, terms and conditions apply to individual products and banking services.