How to Invest With Plum 🌱
We talk a lot about the benefits of investing. That’s because, among the reasons why Plum was founded, there is a social aspect. We believe that there is an unfair division in society 💔 It separates those with the knowledge of how to invest their nest-egg, and those who are at risk of having their savings eroded by inflation (you can check out our earlier blog post if you’d like to read more about that).
There are lots of reasons why people don’t invest their savings, but around one-third of our users told us the reason they haven’t invested is because they don’t understand it* 🤷♂️ That’s why we designed Plum investments to be super-easy! You don’t need a vast sum to begin, and can start investing today with as little as £1. Here’s everything you need to know to get started:
*taken from study of 1,032 Plum users, conducted October 2019
Open Your Investment Account
You can open your investment profile from the main Plum menu. We’ve made it as simple as possible, and it will take less than 2 minutes to complete ⚡️
You can choose from either a Stocks & Shares ISA (Individual Savings Account), or GIA (General Investment Account), if you already have a Stocks & Shares ISA. You are permitted to deposit a total allowance of £20,000 per year, tax free, into a single Stocks & Shares ISA (though bear in mind that any money you may potentially pay into a Cash ISA elsewhere will be deducted from this same allowance).
We Need to Know Our Customers
During the sign-up process, when you create your investments account, you may be asked to verify your identity by providing e.g. a passport or driving license.
This is known as a KYC (Know Your Customer) check, and is necessary in order for us to comply with anti-money-laundering legislation. If required, in most cases this check is completed almost instantly, but may take up to 5 working days for us to process.
Select Your Investments
Because the value can go down as well as up, there’s always an inherent element of risk when investing money. But here at Plum, we’re all about promoting ways to invest sensibly so that this risk can be minimised wherever possible. Rather than expecting you to pick specific stocks, we’ve done the hard work for you, and instead offer a range of investment ‘funds’.
These funds are professionally managed portfolios containing many different securities (normally a mixture of stocks and bonds). This means the risk is spread, though we pay a fee for the management of the funds. However, if one company in the portfolio performs badly, it only affects a small portion of your overall investment.
Funds are usually put together around themes, or risk-levels. For example, the Tech Giants fund features the likes of Apple, Facebook, and Google.
Please keep in mind, as with all investing, your capital is at risk and the value of your investment may go down as well as up. Note also that past performance is not a reliable indicator of future trends.
Automate Your Investments
When it comes to savings, automation could be your friend. This is one of our key principles, and it can be used to make investing a whole lot more convenient too!
Our splitter tool allows you to automatically apportion deposits between your Plum savings and the investment funds you’ve previously chosen. Not only does this make the process easier for you, but it also promotes good investing practice… as it’s never a good idea to have all your eggs in one basket 🐣
To set-up your splitter you can tap ‘Brain’, then ‘Splitter’ from within the Plum menu (or type 'Splitter' in your Messenger chat). From there you can decide how you would like your savings to be allocated to the funds you’ve selected.
Or Deposit Manually
Although automation can be a very powerful tool, there may also be times when you prefer to make savings deposits manually instead.
To do this:
- Tap ‘Investments’ on your Plum menu (or type 'Invest' in Messenger)
- Then hit ‘Deposit’
- Pick the fund you want to invest in
- Enter the amount you wish to invest (i.e. £5)
- Press ‘Done’ and you’re all finished!
Because Plum is linked to your bank (though you can also invest straight from your Plum savings if you’d like to), it means there are no additional passwords or login credentials to remember. It can take up to 6 working days for your buy order to be processed and reflected in your Plum investments account.
How Much Does it Cost?
Although investments is a paid feature within Plum, we’ve worked hard to ensure the process is intuitive as possible and that all fees are totally transparent… whether you invest £50 or £5,000! Further to this, you will only be charged if you hold money in your Plum investments. If your investment balance is £0, then we’ll automatically pause your subscription and you will not be charged for the service.
- £1.00 a month (your first month is free)
- 0.53% annual average fund management and provider fee*
- No hidden transaction or trading cost
- No hidden withdrawal costs (or limits), or exit costs
For example, if you were to invest £1,500 with Plum then it would cost you an average of £18 per year, regardless of how many buy or sell orders you place.
*This includes a fund management fee of 0.15% which goes to our technology partner, as well as a 0.08%-0.90% fund provider fee (the precise fee will be dependent on the funds you choose to invest in). You can find a full list of funds with respective fees on our website. Both fund management and provider fees are charged annually, billed monthly, and are automatically reflected in your portfolio balance.
How to Sell or Withdraw Your Plum Investment
Even a relative novice should be mindful of the fact that investing is for the long-term... but even so, at some point, you gots to get your money back! We made sure this process is as easy as pie too:
- Tap ‘Investments’ in your Plum menu
- Hit ‘Withdraw’ (or type 'Withdraw' in Messenger)
- Select the fund you want to withdraw from
- Enter the amount to withdraw
- Press ‘Done’ and you’re all finished!
Because your investment first has to be sold, it can take up to 5 working days for your money to be deposited back into your Plum savings.
Watch Your Money Work
Although most people like to try and actively ‘forget’ about their investments, it’s only natural that you should be curious. So we designed a slick interface that you can use to track the value of your portfolio… just don’t blame us if you find it too addictive to use!
Tap ‘Investments’ from your Plum menu (or type 'Investments' in Messenger) for an overview of your overall returns and a breakdown by fund.
If you'd like to learn more about Plum then you can check out our website.
If you're enjoying Plum then please share on social media using the hashtag #LifeWithPlum