Boost Your Savings with a Regular Investment Plan

With compound growth, dollar-cost averaging and potential tax savings, a regular investment plan is a powerful strategy.

When it comes to reaching your goals, one of the most effective strategies you can use is also one of the easiest and most convenient: investing regularly. A regular investment plan is a savings commitment that invests a fixed-dollar amount at specified time periods. You can set up your plan according to the schedule that best meets your needs - weekly, bi-weekly, or monthly.

Key benefits

If you don't already have a regular investment plan, now is the time to start. If you do have one, make sure you're contributing as much as you can. You'll enjoy a number of important benefits that can enhance your short and long-term results.

Compound growth.
With a regular investment plan, your money starts to work for you right away, earning interest, dividends, or investment growth on a compound basis.

Dollar-cost averaging.
The set dollar amount of your regular contribution buys more units when prices are low and fewer units when prices are high; over the long term, this can reduce your average cost per unit.

Reduced temptation to time the market.
Many studies show that when investors try to time the market they often pay a steep price, missing the best time to buy or sell, and ending up out of the market during the biggest gains. A regular investment plan minimizes this temptation and allows you to build wealth steadily over time.

Potential tax savings.
When your regular contributions are directed to a Registered Retirement Savings Plan (RRSP), you can apply to have your payroll deductions reduced at source. In other words, you reap the tax benefits of your RRSP contributions up-front, rather than having to wait until you file your income tax return after the end of the year.

How dollar-cost averaging can enhance your investing results

This hypothetical example (simplified for illustration) shows how a regular investing plan can reduce average cost per unit. For the 6-month period shown, the average price per unit is $8.83. But the investor's average cost per unit is just $7.75. Plus, any interest or dividends issued throughout the 6-month period could be accumulated and reinvested for further gains.


Amount invested

Unit price

No. of units purchased

January $500 $10 50
February $500 $7 71
March $500 $5 100
April $500 $6 83
May $500 $10 50
June $500 $15 33

The earlier you start a savings plan, the better - but it's never too late to begin. Finding a small amount to regularly invest now can help you to establish a plan and work towards a long-term goal. Over time, as your cash flow allows, you can boost your regular investment plan incrementally.

Regular investment plans are also a great way to help your kids develop the savings habit. Monthly contributions that compound over the years can lead to significant gains that can help with tuition or other major purchases.

Are you overlooking these potential savings?

The more you can commit to your regular investment plan the better. Here are three strategies that may help you uncover extra funds that you can put to work for your future.

Reduce your cost of borrowing.
Restructuring your debt could potentially free up hundreds of dollars each year by reducing your interest payments. For example, you might consolidate credit card balances or car loans to a secured loan or personal line of credit. Consolidating may also provide you with leverage to negotiate a lower interest rate than you are currently paying. The difference could be allocated to a savings plan.

If you’re a homeowner, you may want to review your mortgage with an advisor. Depending on your situation, switching to a fixed-rate mortgage or variable-rate mortgage, for example, could lower your monthly payments to free up money that could go to savings. Learn more

Consolidate accounts.
Holding all your funds within one institution does more than give you a better perspective on your investments and the ability to achieve optimal diversification. It can also reduce the fees you pay to keep several accounts active. Consolidating non-financial accounts can also be beneficial. For example, you may be able to reduce your insurance costs by insuring your home and your car with the same provider. Similarly, you may save by “bundling” your telephone, television, and internet services with one company.

Draft or review your family budget.
There are many tools available, such as CIBC’s CreditSmartTM and Online and Mobile Banking, which can help you track and manage your expenditures. A clear picture of your budget can help you prioritize your wants and needs to identify savings opportunities. For example, you could use CreditSmart to give yourself a monthly limit of $200 for dining out. When you’re getting close to that level, you’ll receive a phone call, email, or online message notifying you so you’ll know that it’s time to stay home and barbecue instead.

When you do make purchases, be sure to take advantage of any loyalty cards and rewards programs to get more for the dollars you spend.

Start saving today

A CIBC advisor can help you with cash-flow and investment planning, and suggest ways to reduce expenses without affecting your lifestyle. He or she can also set up or increase contributions to a regular investment plan and allocate your money to appropriate investments.

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