The research link above from seedly provide a very comprehensive guide on choosing the cheapest stock brokerage in Singapore.
The 1st question to decide on a brokerage in Singapore would be: CDP or custodian?
1. What is CDP? (Central depository pte limited)
As quoted from this SGX link,”CDP is a wholly owned subsidiary of the Singapore Exchange Ltd (“SGX”). We provide integrated clearing, settlement and depository facilities for our customers in the Singapore Securities Market, including both equities and fixed income instruments.
- CDP is a place where all your shares are stores
- You can only have one CDP account under your name but you can use different broker ranging from DBS, OCBC, POEMS etc
- There will be a clearing fee(0.0325%) and SGX trading fee(0.0075%) on each of your transaction, more on about this in the near future
- The stock is held by the brokerage you use,e.g standard chartered
- Cheaper than a CDP account
What is a cash upfront account?
- As quoted from the above link, it is a pre-funded account where you need to top up sufficient cash into an account before executing a trade.
- Currently, the cash upfront account only allows you to trade in Singapore Stocks
So, why did I choose DBS as my broker?
- Simply because everyone in Singapore would have a POSB/DBS account when they’re born(In short, for convenience sakes).
What is the brokerage fees for DBS cash upfront account?
- Currently, the brokerage fee for DBS cash upfront account is 0.18%, min SGD10
What should be the minimum amount one should invest? (I mention this a few weeks before in this post)
- The minimum amount that one should invest in each trade should be more than $5,555.55
***When you make a trade with DBS Vickers cash upfront account, it will only hold your stock for 3 days before transferring to your CDP account, this means that if you have to sell your stock after 3 days, you will have to sell it via your normal cash account when you place the sell order, which means you incurred a brokerage fee of 0.28%, min $25(Will give an example more about this in my future post)
But bear in mind that DBS Vickers cash upfront account only allows you to trade in the Singapore market and not the foreign market, so what if you want to trade in the US market?
Which bring me opening a second brokerage account with standard chartered bank which is a custodian account hence the lower brokerage charges compare to DBS Vickers, you can view the brokerage charges for standard chartered in this link.
- Brokerage charges for standard chartered online and mobile trades:0.20%, min $10
- The minimum amount that one should invest in each trade should be more than $5,000
What are you guy using for your brokerage? Do share below:)
stay tuned to the next post!
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