Personal Banking

Automatic Investment Plan (AIP)

Automatic Investment Plan (AIP)

Automatic Investment Plan (AIP) refers to the investment method in which investors reach an agreement with a bank to purchase designated open-ended fund of fixed amount on regular basis by entrusting such bank to deduct money automatically.

1. Characteristics and advantages of AIP:

• Low threshold, accumulating small amount of money, similar to "installment savings and lump-sum withdrawal”

• Long-term investment with compound interest

• No more "missed opportunities" or "lock-in”

• Save time and free of worry

2. AIP is designed for: investors who wish to lower investment risk; investors with long term goals such as children education and pension; office workers who have no time for wealth management; people living paycheck-to-paycheck who wish to save money and wage-earning class.

3. How to choose appropriate fund for AIP?

First, determine your investment goal and term. For long-term goals such as pension, you may choose high-risk and high-return funds such as stock fund and index fund. For short- and medium-term goals such as property purchase and children education, you may increase the proportion of mixed fund or bond-focused fund in your portfolio.

Second, once the type is determined, choose appropriate fund. The fund should be chosen based on accumulated growth rate of net value and dividend record. Accumulated growth rate of net value = (accumulated net value of shares- face value per unit )/ face value per unit For example, the accumulated net value per share of a fund is 1.18 Yuan, and the face value per unit is 1.00 Yuan, then the accumulated growth rate of net value is 18%. Among funds of same duration, the higher the accumulated growth rate of net value, the better the investment performance. Besides, dividend distribution or even continues distribution also indicates a sound operation of fund to some extent.

Third, compare fund returns with overall market movements. If a fund outperforms the market index for the most of time, then the management of the fund can be deemed as effective. And investing such fund for AIP will reach an ideal balance between risks and returns.

Fourth, compare fund return with other funds of same type Generally, funds of different risks and types should be compared according to their types respectively. It does not make much sense to directly compare funds of different types.

Finally, investors can also evaluate fund managers' abilities by using analysis from professional companies (Morningstar, Lipper, Galaxy Securities, CITIC Securities etc).

4. Investment Guide for AIP

1. What are the differences between AIP and regular subscription?

AIP requires less capital than regular subscription. Some fund companies set the threshold of AIP at 100 Yuan, and the subscription amount for each investment period is fixed. Regular subscription is subject to market liquidity risk, while AIP disperses risks by investing capital regularly.

2. How to conduct redemption of AIP?

It is the same as regular redemption.

3. Is there be any dividend for AIP?

AIP investors can enjoy same dividend distribution as regular subscription.

4. For fund with front-end charge or back-end charge, which model is better for AIP?

Under back-end charge model, fee will be charged when clients redeem the fund according to their holding duration. Therefore, the longer you hold the fund, the lower fee (or even free of charge) will be charged on you. As AIP is essentially a long-term investment, we recommend investors to choose back-end charge (except for some back-end charged funds not applicable to AIP)

5. Service Guide

1. How to apply for AIP with IB?

The service is available at various IB's outlets, Internet banking and mobile banking. Procedures:

At outlets: Clients may apply for AIP business at IB's outlets with his/her ID papers, Natural Life Family Wealth Management Card (or current passbook) and complete the Fund Application Form (AIP).

Via Internet banking: The customer logs on the Internet banking system of IB ( – select “Investment and Wealth Management” – “Fund and Securities Broker Product Distribution” – “Automatic Investment Plan” to select and decide on the fund for AIP, enter the amount and cycle and submit the request.

Via mobile banking: log on the mobile APP, select “Fund Distribution” - “AIP”, select the fund for AIP, enter the amount and cycle and submit the request.

2. What's the minimum amount AIP subscription?

The minimum subscription amount of AIP is subject to the rules of fund companies. Different companies may have different amount requirements, usually 100, 200 or 300 Yuan.

3. What is the subscription charge for AIP? Is there any other fee?

For AIP registered and opened at our bank's counter or Internet banking, the subscription charge is subject to general rate. No other fee besides subscription charge.

4. How to select the period and date of AIP?

A customer may select different investment cycles for AIP, such as days, weeks, two weeks, months, seasons and years.

If the investment cycle is in months, seasons and years, the date of AIP must fall between the 1st and the 28th day of a month (natural day); if the investment cycle is in days, there is no need to select the specific date; if the investment cycle is in weeks or two weeks, the date of AIP must fall between Monday to Friday.

If the execution date of AIP is a national statutory holiday, the deduction will be postponed to the next working day. But if the investment cycle is in days, the deduction will not be postponed. If the postponed deduction date and the agreed deduction date fall in the same day for the same AIP transaction, only one count of deduction will be performed each day.

5. Will AIP be suspended if balance of account is insufficient on the designated AIP deduction date?

On the designated AIP deduction date, AIP will not be conducted in current period if balance of account is insufficient. However, AIP will become active in the designated deduction date of next investment period if there is sufficient balance of account.

If a deduction fails for 3 times, this AIP transaction will be deemed invalid.

6. While a fund is suspended for subscription, can AIP still proceed ?

It depends on rules of different fund companies. If fund companies stated AIP can be conducted as normal during suspension, AIP can still proceed.

7. Can I apply for AIP with multiple fund companies using just one wealth management card?

Yes. You can apply for AIP with multiple fund companies using one IB card. You should specify the fund product and amount for AIP at application.