Not everyone has the capital to invest thousands of euros in shares or other securities. That is why more and more financial players are putting their investment plans in the spotlight.
The low interest rate affects not only savers, but also the banks. The unfavorable interest rate situation puts the current earnings model of the banks under considerable pressure (the interest rate difference between the savings books and the loans). That is why more and more banks are offering alternatives to the savings account. The investment plan is one of them. The brokers also see bread in such investment formulas.
What is an investment plan?
The big advantage of an investment plan is that an investor does not have to take a deep look to invest. With many players it is possible to start an investment plan from 25, 30 or 50 euros per month. That money is spread over several investment funds.
Investors are free to choose whether or not to invest a higher amount. Furthermore, it is perfectly possible to pause or stop the plan for a specific period. In addition, an investor can usually determine the periodicity of the deposits themselves.
According to the banks, an investment plan is the ideal investment product for people who want to keep their emotions under control. A periodic investment offers an investor the opportunity to remain disciplined and not to be guided by emotions. In other words, he does not allow himself to be carried away by what is happening on the financial markets at a certain moment.
Determine investor profile
As with all other investments, financial institutions are required to prepare an investor profile of the client. Based on that profile, they will put forward certain investment products. Someone with a defensive profile will be advised to invest primarily in bond funds. Equity funds are the ideal investment products for dynamic profiles. But how do you choose the perfect investment plan? We give some tips.
1. Look at the minimum amount
Depending on the investor’s profile, one investment plan is already better than the other. People who do not want to spend more than 20 euros a month are at the right place at bpost bank. That is 5 euros less than at Keytrade Bank, AXA, ING and KBC. Beobank requires a minimum monthly contribution of 50 euros.
At MeDirect and Deutsche Bank it is only possible to start an investment plan from 100 euros per month. In addition, MeDirect asks to deposit at least 2,500 euros when opening a fund savings plan.
2. Search for personal advice
Anyone who attaches great importance to personal advice is better off with one of the traditional players. Among other things, it is possible to subscribe to an investment plan with BNP Paribas Fortis, KBC, ING and Beobank. Traditional banks have a wide local network where investors can obtain information from an adviser.
3. Choose a predetermined plan?
Some players allow investors to choose from certain funds, while others put forward fixed plans. For example, those who opt for a KeyPlan from Keytrade Bank can choose from three plans. One plan is already more dynamic than the other. In addition, investors who wish can compile a plan themselves. They are given the choice of 40 funds. At BNP Paribas Fortis, investors can also choose from three plans (depending on their profile).
Beobank then makes a selection of 60 funds from a collection of 300 funds, the so-called Premium Funds Selection. At ING, customers can choose from 11 funds.
In some cases, brokers or banks determine the maximum number of funds that an investment plan may consist of. At KBC and Belfius, for example, an investment plan can consist of a maximum of 5 funds.
Investors at MeDirect can then choose from four model portfolios. The composition of those model portfolios is based on the risk profile of the investor.
4. Take the costs into account
Traditionally, the internet banks are the cheapest players on the market. For example, Keytrade Bank does not charge entry or exit charges. Only when someone leaves a fund within five years does he owe Keytrade Bank an exit fee of 9.95 euros. At MeDirect, investors do not pay entry-transaction or exit-costs.
At most of the traditional banks, such as BNP Paribas Fortis, Belfius and bpost bank, investors pay a maximum of 2.50 percent entry costs. Customers at KBC, the most expensive player in our comparison, pay a maximum of 3.5 percent entry costs. In addition, the majority of the financial players charge current costs. Those costs can vary annually.