This series of articles deal with all the mandatory technical procedures like setting up the necessary accounts needed to be able to invest in Singapore.
The information has been broken down into steps and outlined the simplest, most-hassle-free way of going about to get started.
It is technically possible to hire a financial planner to assist you with everything and get everything you need for you to sign and approve. However, one of the goals of passive investing is to keep costs down to prevent them from eating away into your hard earned and invested money.
But, for now, we will assume that you will be making all your investments yourself. Besides saving a lot of money in fees in the long run, it is good for you to know the following fundamental information, although it might be confusing at the start.
Open a Bank Account in Singapore
Yay! This is something you are almost-definitely very familiar with and likely already have – a bank account. It is the thing you wish would have more money in at the end of every month. You can open either a savings or current account.
Most Singaporeans will likely have a bank account so this should not be a big issue. If you don’t have a bank account, you must be hiding your money under your mattress or in that Milo tin.
While not mandatory, it is much more convenient for you have a bank account and be able to use the bank’s Internet platform to transfer money into your trading account or for money to be transferred when buying and selling securities.
Several banks offer a monthly investment plan such as such as POSB’s “Invest Saver” and OCBC’s “Blue Chip Investment Plan”. These plans allow you to invest as little as $100 monthly in selected stocks and ETFs, including blue chip stocks (large, well-established and financially sound company that has operated for many years). One feature of these plans is that you do not need to open a trading account with a stock broker (Step 2) or a CDP Account (Step 3).
The above investment plan is also different from a CPF Investment Account that is specifically opened with one of the 3 agent banks that allows you to invest money from your CPF Ordinary Account into certain financial assets.
If you are confused after reading this last two paragraphs, don’t worry about it. Just open a bank account and move on to Step 2. The CPF Investment Account will also be discussed later (Step 4).