It is critical in the setup of a Recurring Investment on a minor account to define what a Recurring Investment is, and explain what it is you are trying to do.
WHAT IS A RECURRING INVESTMENT?
A Recurring Investment is a process in which a client who operates a minor account, decides he / she wants to invest an amount of money into a particular Satrix instrument (eg. ETF) on a regular basis.
I decide that I can save R1,000 per month to go towards an investment for my daughter in her minor account on SatrixNOW, and with that R1,000, I wish to purchase R650 worth of Satrix 40 ETF and R350 worth of Satrix DIVI ETF. It's a mission to have to go onto the platform every month, EFT the funds to my account, wait for them to arrive in my available funds and then when they do, go and make 2 separate purchases of those chosen ETF's. Instead, I can set up a Recurring Investment on the SatrixNOW platform to do that for me automatically every month (or quarter or year) and then forget about it, comfortable in the knowledge that my money will go to SatrixNOW AND will be invested in those ETF's at the times I've set up.
So it's very important to understand that a recurring investment is a two-step process involving:
- Moving money / funds from your bank account, into the SatrixNOW minor account. Without the funds, you cannot make the investment. Simple.
- Then telling the SatrixNOW platform what to purchase with the funds that have been transferred.
The key difference in approach is that on a Minor account, the Recurring Investment must always be setup to operate out of the Available funds of the account, rather than via debit order.
So if Recurring Investments are always to be setup using Available funds, then the Authorised User of the account needs to ensure that those funds are transferred into their Available funds for use on the date the Recurring Investment is setup to run, or it will fail and the desired purchase will not be made.
They can do this by following the instructions in this FAQ article.
Once they've set up the movement of funds correctly, all they now need to do is tell the platform what to buy. They can do this by following one of the 3 methods below.
A. From the Recurring investments page
The setup of a Recurring Investment can be initiated from the Recurring Investments page as per the steps below.
1. Click on the stack menu icon (Next to the Satrix logo) in the top left corner.
2. Click on the 'Recurring' tab under the 'My investments' heading.
3. Clicking on the setup recurring button will take Investors to the Browse the market page of the site where they can select the particular Satrix ETF/ Unit trust they want to buy in the usual manner.
4. After selecting an instrument they should arrive at the Buy page of that ETF/Unit trust from which they can continue from method B below.
B. From the Buy page of an ETF
When you navigate to the buy page of an ETF, you will be greeted with the familiar buy options of selecting one of the standard amounts (Ie. R100, R250, R500) to Invest, together with the custom amount field.
To setup a Recurring Investment from here, please follow the steps below:
1. Select / enter the amount you'd like to Invest
2. Below that you will see an option to choose a Recurring or Once Off Investment
3. Click on the Recurring button - this will change the colour of the button from light-blue to dark-blue.
4. This will take you to the add recurring investment screen with the recurring investment amount populated with the amount you selected / input on the previous page as well as a 0% default value for the annual increase percentage.
Both of these figures can be changed on this page.
5. Ensure the 'User Account Available Funds' option is selected under the 'choose a payment method to fund your recurring investment' section.
For a recurring investment on a Minor account, the "User Account Available Funds" option must ALWAYS be chosen.
Choosing this option will mean it is your responsibility to have funds available in your account on the selected date of the Recurring Investment. If the funds are not there at the time we try to Invest them for you, the Recurring Investment will not be made.
6. Choose when you want the payments to occur. You have the choice of making the recurring investment every:
7. Choose the day on which you'd like the recurring investment to be made. You can choose the:
1st of the month or the 25th of the month
8. If you choose the quarterly or annually options, you will be required to select the month on which you want the quarter or year to start.
9. Having chosen Available Funds as the method to fund your recurring investment (see step 5 above), you need only accept the Terms and Conditions and the banking details by clicking on the little box presented to you on the bottom left of the page.
10. Once you have completed all your selections, click on the blue continue button - this will take you to the confirm your recurring investment page, which will summarise the full details of your recurring investment in 2 parts:
Recurring Investment details - this part of the confirmation outlines the following details for you to check.
- The ETF you are buying
- The chosen payment method
- The frequency of the payment
- The annual % increase chosen (default value of 10% if not changed)
- The date on which the first Investment will be made
Investment cost - this part of the confirmation outlines the costs of the Investment for you to check
- Broker commission - usual brokerage cost of 0.25%
- Settlement and administration - the usual cost of 0.075%
- Investor protection levy (IPL) - the usual cost of 0.0002%
- VAT - levied against the 3 fees above
- Recurring Investment fee - a new fee that covers the cost of administering the recurring investment facility
11. Once you have checked all of the details of your recurring investments and are happy they are correct, Click in the small box that you have read and understood the Effective annual cost then click on the ADD TO RECURRING button at the bottom right of the confirmation screen.
Doing so will take you to the recurring investments page on which you will see a confirmation that the recurring investment was successfully created. You will also see details of the recently added Recurring investments which you can edit / remove at any time. Please see our FAQ article here, on how to do that.
C. From the Cog icon on the corner of an ETF you own
All the ETFs an Investor owns can be found on the Account Overview screen of their Investment and TFSA accounts.
Each ETF on the page has a small blue gear icon in the top right-hand corner of the rectangular block.
Clicking on this cog icon will give the Investor a number of options in relation to that particular ETF
Should an Investor like a particular ETF and want to create a Recurring Investment for it, they can do so as follows:
1. Click on the blue gear icon
2. Click on the Add Recurring option
3. The Investor can now choose the particular details of the Recurring Investment they would like to setup starting with entering the amount they would like to invest in the chosen instrument and if desired, changing the annual increase percentage (from the default value of 0%).
The Investor can now continue with the steps as explained in detail from Step 4 onward of Method B in this FAQ article (see above).