Which Investment Brokerage in Singapore is Best? Here’s How to Decide

Which Investment Brokerage in Singapore is Best? Here’s How to Decide

If you’re looking for a brokerage, congrats! It means you (hopefully) know how to start investing and are ready to enter the stock market and buy some shares.

Before you scroll further, you need to brace yourself—there are a lot of options to consider. You have bank brokerages like DBS Vickers and UOB KayHian, and independent brokerages like Saxo Markets and Interactive Brokers. But fret not because we’ll explain everything you need to know with simple, easy-to-understand infographics.

So how do you decide which investment brokerage is best for you?

Here are 3 main factors you need to look out for:

  1. Commission fees: How much it costs to buy or sell shares
  2. Account type: Whether it’s a CDP or custodian account
  3. Trading platform: How user-friendly the brokerage is

 

1. Investment brokerage commission fees

Most investment brokerage firms charge a commission fee for every transaction on the stock market. When you buy shares, you get charged. When you sell shares, you also get charged. Some brokers may offer free commissions for a set amount of trades or a specific period, but eventually, they will start charging you, as this is how they make money.

There are two parts to the commission: The fee itself (a percentage of your transaction) and the minimum fee (a dollar amount). Here’s an example:

  • You’re buying S$3,000 worth of Singtel shares
  • The brokerage charges a 0.1% commission, with a minimum fee of S$10
  • You end up paying S$10 (the minimum fee) instead of S$3 (0.1% of S$3,000) on your shares
  • If/when you sell your shares, you pay another S$10

If you’re the kind of investor who parks a big lump sum for decades, commission fees won’t make much of a difference. But if you invest frequently, expect to be charged commission fees multiple times. So, it’s important to pick a brokerage with affordable rates.

You can compare online investment brokerages on our brokerage comparison page.

It’s also important to take note that a brokerage usually charges different rates for shares in different markets, such as US stocks and Singapore stocks.

Right now, the cheapest investment brokerage on the market for Singapore stocks is Webull. That’s because of their latest promotion, where you can trade SG stocks for S$0 commission for up to 3 years. The brokerage scene in Singapore is getting really competitive, and that’s why newer brokerages like Webull are offering such amazing deals.

After 3 years, the fee increases to 0.025% of your total trade value, with a minimum of S$0.80. Even this revised rate beats most other brokers in the market at the time of writing—so if cost is most important to you, go with Webull.

Webull logo
MoneySmart Exclusive
Online Promo
No commission
Min. Commission Fee for US Stocks
0.025%/0.03%*
Min. Commission Fee for SG Stocks
0*
Min. Funding
S$0
MoneySmart Exclusive:

Get up to S$250 Cash via PayNow* exclusively on MoneySmart when you fulfill the requirements*! T&Cs apply.
 
Plus, score an Apple Watch SE (worth S$382.50) in our Giveaway when you are the 38th, 58th, 88th & 148th customer to submit your incentive claim form! T&Cs apply.
 
Enjoy 0 commission fee* up to 3 years and FREE market data with SG Stock Trading when you open a Webull account.
 
Plus, get USD50 to USD2500 worth of shares and USD450 worth of trading vouchers* from Webull's Welcome Promotion. T&Cs apply.
 
Subscribe at least USD2000 to Moneybull by 01 April 2024 and fulfil the requirements to get up to USD5000 worth of free shares. T&Cs apply.
 
Get up to USD3,000 worth of shares* from Webull's Transfer-In Rewards Promotion. T&Cs apply.

Valid until 15 Mar 2024

When it comes to US stocks, 2 stand-out options are Saxo (US$0.25 min. commission fee) and moomoo, which advertises “lifetime commission-free trading for US stocks”, but they charge US$0.99 per order.

Broker Commissions Platform fee
Saxo US$0.25 S$0
moomoo S$0 US$0.99 per order

If you’re buying a small amount of shares go with Saxo, as you’ll pay the minimum commission of just US$0.25. If you’re purchasing a large quantity of shares, go with moomoo since it will be a flat US$0.99 per order.

Saxo logo
MoneySmart Exclusive
Min. Commission Fee US Stocks
US$0.25
Min. Commission Fee SG Stocks
S$1
Min. Funding
S$0
MoneySmart Exclusive:

Get S$200 Cash via PayNow* when you open a new Saxo Account, fund a min. of S$3,000* (in one single deposit) and execute 1 trade* within 14 days of account opening! T&Cs apply.
 
International Women's Day Flash Deal | Exclusive Offer for Female Investors:
As a female investor, you'll receive a special bonus of S$38 Cash via PayNow on top of S$200 (Total S$238) Cash via PayNow reward!
 
What's more?
Get an additional S$750 when you refer a friend. T&Cs apply.

Valid until 31 Mar 2024
moomoo (by FUTU) logo
Online Promo
Low commission fees
Min. Commission Fee US Stocks
US$0
Min. Commission Fee SG Stocks
S$0.99
Min. Funding
$0

The commission fees at independent brokerages like the ones above are super cheap compared to bank brokerages. For example, DBS Vickers charges 0.18-0.28% per trade, subject to a minimum of S$25.

Besides commissions, you do need to look out for additional fees, such as platform fees, custody fees, holding fees, and so on. These days, many brokers are phasing out such hidden fees, but do check carefully. These fees are especially harmful to long-term investors who want to buy and hold on to shares for years and years.
Brokerage fees

2. CDP account vs custodian account

Wondering why some people choose to trade with bank brokerages despite the higher fees? Well, one of the key differences is the “Stock Holding Type” or the type of account they use for Singapore stocks. Note that if you’re eyeing US stocks, you’ll need a custodian account for sure. The whole CDP vs custodian account discussion doesn’t apply to US stocks, as The Central Depository is only for trades on SGX.

Most bank brokers offer you a Central Depository Account (CDP account), while independent brokers offer a custodian account. What’s the difference?

  • CDP account: Stocks are held under your name in your own personal CDP account. You have full shareholder rights, such as attending AGMs (annual general meetings). If the brokerage or bank goes bankrupt, your ownership of the shares will not be affected. On the downside, CDP accounts generally charge higher fees.
  • Custodian account: The brokerage owns the stocks on your behalf, so the stocks are technically not in your name. Sounds risky, but MAS regulates the financial industry very tightly in Singapore, and most brokerages keep custodian accounts separate so that they will not be affected financially. One of the biggest plus sides to custodian accounts is that they generally charge lower fees.

If a CDP account appeals to you more, the big-name brokerages typically offer them:

UOB logo
Min. Commission Fee SG Stocks
S$18
Stock Holding Type
CDP
Min. Funding
S$0
DBS logo
Min. Commission Fee SG Stocks
S$25
Stock Holding Type
CDP
Min. Funding
S$0
OCBC logo
Min. Commission Fee SG Stocks
S$25
Stock Holding Type
CDP
Min. Funding
S$0
CSG-CIMB Securities logo
Min. Commission Fee SG Stocks
S$25
Stock Holding Type
CDP
Min. Funding
S$0

 

3. Investment trading platform

Finally, you’d want to check out the investment brokerage’s online trading platform—either a website and/or mobile apps. These let you check stock prices and invest on the go.

Naturally, you would want to pick an investment broker with an accessible, user-friendly, and non-buggy online trading platform. If you can’t invest online with ease, then what is even the point?

So, before you commit to a specific investment broker, make sure you test out their platform to see if you’d be happy using it again and again.

If it’s buggy, doesn’t display the right information, is filled with distracting pop-ups, or doesn’t have the tools that you need—forget it; there are other fish in the sea.

My personal preferences for good trading interfaces are SaxoInvestor, IBKR Mobile/Desktop, and the CMC Markets Next Generation trading platform.

Choosing a Brokerage Account

In case you need it: Here’s how to open a CDP Account

If you have decided on an investment brokerage that lets you own stocks via CDP, then you’ll need to set up a CDP securities account.

To be eligible to open an account, you need to be at least 18 years old and not an un-discharged bankrupt. You then have 2 options to open your account:

  1. Open your CDP account directly with The Central Depository—it’s a very straightforward process.
  2. Create a sub-account with a “Depository Agent”—that’s a stockbroking firm, trust company or bank nominee.

Basically, while you can deal with as many different brokerage firms as you want, you only need to open one CDP securities account to deposit all the stocks you’ve bought.

Opening a CDP account

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Good luck on your investing journey! Share this article with anyone who’s looking for an investment broker.