Monthly investing

Currently, it is not possible to set up a regular monthly investing online via the Chelsea FundStore. You will need to download the ISA application form or Investment Funds application form and send it to us, with the direct debit mandate completed, to: Chelsea Financial Services, St James' Hall, Moore Park Road, London, SW6 2JS.

The benefits of investing monthly

Regular monthly contributions are generally the route taken by people who don’t have a large amount to invest at one time, or by those who are more cautious about investing a lump sum and prefer to drip feed their money into the markets. But it can also be a useful strategy for people investing in riskier asset classes.

  1. Investing monthly means that you don't see the value of your investment change so dramatically, which can help you stay focused on your long-term goals. When the market dips, your regular payment will buy more units and when the market rises, you will buy fewer units, but the units you bought in previous months will be worth more. This smoothing out of investment returns is known as 'pound-cost averaging'.
  2. It can be a particularly effective way of investing through volatile markets, as a monthly direct debit takes the emotion out of investing, which can be invaluable at times of extreme volatility. For instance, during the financial crisis, extreme market volatility left most investors panicked and some sold out, missing out on the inevitable bounce, but those investing monthly had a much smoother ride.
  3. Another positive is that the money is taken directly out of your bank account, so you don't have to remember, and it becomes one of your regular monthly outgoings. Only instead of paying a bill, it is saving for your future.
  4. As your circumstances change you can adjust the amount of your regular savings. Ideally, you should look to increase the amount as your salary increases, but you have the flexibility to reduce it, should your income fall.
  5. Monthly investing also promotes the discipline of saving, whereby a small amount invested every month over several years can build into a sizeable nest egg.
  6. Investing monthly via the Chelsea FundStore has the added bonus of offering the same discount on monthly savings as lump sum investments and a minimum monthly investment of only £50.

The downside to this way of investing is that, if you drip feed money into investments, only a small proportion of your money will be earning returns in the early months.

Monthly Investing Tips

  • Keep an eye on the funds in which you are investing. It is easy to lose track of how they are performing (our Research funds page will keep you up-to-date with performance).
  • Ensure you have a good spread of funds. The secret is to diversify your holdings - the greater the spread of funds, the more you reduce your risk and the better you can benefit from any upswings in sectors or regions.  
  • Be aware of the volatility of the funds you hold. There can be a huge divergence of volatility, even within a particular sector or region.
  • To start a monthly savings ISA, simply fill out the application form.
  • To alter monthly payments, either telephone us on 020 7384 7300 or pop a letter in the post to us.

How much your regular contributions could be worth, assuming 7% growth per annum, after charges:

Monthly contributions After 5 years After 10 years
£50.00 £3,600.53 £8,704.72
£100.00 £7,201.05 £17,409.45
£250.00 £18,002.63 £43,523.62