What are Retail Service Providers (RSPs)
Market makers are commonly known as Retail Service Providers (RSPs) and are generally Investment Banks or Brokerage Houses that offer electronic quotations to retail investors through an online broker.
These businesses take on significant risk by guaranteeing to buy and sell a stock up to predetermined levels at all times (thus creating the market). They may profit from the spread between the asking price and the bid price to offset that danger.
What is the minimum RSP amount in Singapore
If you’re serious about investing in the Singapore stock market, then it’s likely that you’re aware of what an RSP is. An RSP or Retail Segregated Portfolio accounts for retail investors like yourself to purchase securities such as stocks and bonds through your bank or broker. However, there is a minimum investment amount set by most financial institutions, with SGD 30,000 being the standard figure.
How do you go about doing so for those who are considering making investments on their own for the first time or who want to make more significant investments than average? Read on to find out more!
There are several ways that one can have access to an RSP account.
Firstly, if you have an existing account with a bank or broker(Saxo regular savings plan), they will most likely allow you to open an RSP in that system. Secondly, if you do not have an existing relationship with any of the banks in Singapore, some brokers can assist you in opening up an account. Some of these brokerage firms include Phillip Securities and Maybank Kim Eng Securities.
Structuring your investment amount over multiple accounts
Suppose you want to make more significant investments than average or plan on making several smaller investments at one go. In that case, you can consider structuring your investment amount over multiple accounts, whereby each account has a minimum value of at least SGD 30,000 per account. This way, one person can structure their savings into more than one RSP’s until they accumulate the required sum. This method may be more suitable for existing accounts, as opening a new account might incur additional fees.
Two types of retirement schemes in Singapore
The two types of retirement schemes in Singapore are the Central Provident Fund (CPF) and the Supplementary Retirement Scheme (SRS).
Individuals contribute a set amount from their monthly wages for both plans, and this money is deposited into an account until they retire. At retirement age, they can withdraw all or some of the money put in for their daily living expenses.
The minimum sum under SRS is $80,000, and it increases significantly after that point. The others ask for a $500 contribution at least when signing up for SRS [Note: $500 is not necessarily accurate, but it’s just to give you an idea about how much one would have to contribute at least.]
When you have a good amount of money in your retirement plans, you can use it to base your investments. There are many types of investment that give good returns and help you hedge against inflation. It would be best if you spoke with financial experts/brokers who will provide advice on how much capital you need and what would be a wise investment choice.
The Central Provident Fund (CPF) states an annual amount one must pay into their account or risk incurring a penalty. For those between 50-55 years old, the minimum payment amounts to $168 per year, while those 56-60 should pay $300. Those over 60 must pay at least $450 every year, and those who subscribe to the optional Medisave program must pay even more.
If you want to start investing, you must follow all regulations by Singaporean government agencies such as the Monetary Authority of Singapore (MAS). You risk losing all money invested and possibly face heavy fines or jail time if caught and convicted of any crimes if you do not.