Why you should maximise your money with a regular savings plan

 Why you should maximise your money with a regular savings plan

When it comes to investing, many of us have it down pat that trading stocks, crypto, and forex are the way to go. While it may be true that you can grow your capital quickly and substantially by trading in ever-fluctuating markets, these days, there is more attention being paid to regular savings plan than ever.

What is a regular savings plan?

A regular savings plan is an investment method that hinges on regular contributions of small amounts of money to funnel into an asset such as a fund, trust, or an equity. Regular savings plans use the investment strategy of Dollar-Cost Averaging, which focuses on long-term profits and upward trends over fixations on short-term fluctuations and volatility.

Investors will contribute a set amount of money monthly, starting from a small amount as little as $50 (though it does depend on your bank and their regulations), regardless of how the market is performing. Over time, the money in their plan will accumulate and snowball, and they can be withdrawn when the investor is ready to do so, which could range anywhere from a year to forty years.

Why maximise your money with a regular savings plan?

Below are some reasons why you should maximise your money with a regular savings plan:

  1. You do not need to have a deep knowledge of financial markets

When it comes to trading as a way to generate profits, you typically have to have a good understanding of markets and technical analysis indicators, such as moving averages, Bollinger bands, Fibonacci retracements, and the like. Savings plans are much more straightforward, in which you only have to learn about the specific assets you want to invest in and there is no need to constantly monitor market charts and trends because you are aiming for long-term growth.

  1. You do not have to pay taxes on money within your savings account

When you deposit money into your regular savings plan, this money is tax-exempt until it is withdrawn again. This is perfect for high-earners who want to pay themselves out first. Many are saving for retirement, which is perfect, as when the money is withdrawn, the retired investor will be in a lower tax bracket and therefore can pay less in taxes.

  1. You do not need to have a huge amount of capital to begin with

Finally, one of the greatest benefits of a regular savings plan is that you do not need to have a huge amount of capital in order to effectively make your monthly contributions. Many banks allow regular contributions of as low as $50 or $100, which is perfect for many people. If you would like to contribute more money, you are also welcome to do so as long as you can keep it up on a monthly basis.

  1. You can invest according to your risk appetite

Finally, one of the most important benefits of savings account that appeal to investors is that portfolios can be tailored to your risk appetite. Many banks offer multiple plans and portfolios for investors to choose from to perfectly accommodate their needs. If you are risk-averse, you can select a low risk portfolio. If you are a risk-taker, you can select a more aggressive one. If you are somewhere in between, you can invest in a medium-risk one.

Conclusion

Regular saving plans are a good way to both grow and preserve your hard-earned money. With the right plan, you can slowly but surely build your wealth and ensure that you set enough money aside for later in life. For information on how to open an account, you can read more here.

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