Compare the Best Online Investment Brokerages in Singapore 2020

Choose from MoneySmart's curated list of best brokerages in Singapore and Learn how to maximise returns. Read More
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IG logo
Leading CFD Provider

IG

Min. Commission Fee US Shares
US$10
Min. Commission Fee SG Shares
$$15
Min. Funding
S$0
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Saxo logo
Best Overall Trading Platform

Saxo Markets

Min. Commission Fee US Stocks
US$4
Min. Commission Fee SG Stocks
S$10
Min. Funding
S$3,000
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Saxo logo
Invest from S$100 monthly

Saxo Regular Savings Plan

Service Fee
0.75% p.a.
Expected ETF Costs
0.23%
Min. Funding
S$2,000
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TD Ameritrade logo
Promotion
Best Broker for Options

TD Ameritrade

Commission Fee US Stocks
US$0
Options Commission Fee Per Trade
US$ 0.65
Min. Funding
US$3,000
Promotion: Get up to 100 commission-free trades when you open and fund an account! Valid till 31 Dec 2020.
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PhillipCapital (POEMS) logo
Most Popular Trading Platform

PhillipCapital (POEMS)

Min. Commission Fee US Stocks
US$6.88
Min. Commission Fee SG Stocks
S$8
Min. Funding
S$0
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City Index logo
For Experienced CFD Traders

City Index

Min. Commission Fee US Shares
US$15
Min. Commission Fee SG Shares
S$10
Min. Funding
S$0
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CMC logo
Advance Trading Platform

CMC

Min. Commission Fee US Shares
US$10
Min. Commission Fee SG Shares
S$10
Min. Funding
S$0
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CSG-CIMB Securities logo
Best Analysing Tool

CGS-CIMB Securities

Min. Commission Fee for US Stocks
US$20 or 0.3%
Min. Commission Fee for SG Stocks
S$25 or 0.275%
Min. Funding
S$0
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DBS logo

DBS Vickers

Min. Commission Fee US Stocks
US$25
Min. Commission Fee SG Stocks
S$25
Min. Funding
S$0
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OCBC logo

OCBC Securities

Min. Commission Fee US Stocks
US$20
Min. Commission Fee SG Stocks
S$25
Min. Funding
S$0
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UOB logo

UOB Kay Hian

Min. Commission Fee US Stocks
US$20
Min. Commission Fee SG Stocks
S$18
Min. Funding
S$0
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Disclaimer: At MoneySmart.sg, we strive to keep our information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product’s site. All financial products and services are presented without warranty. Additionally, this site may be compensated through third party advertisers. However, the results of our comparison tools which are not marked as sponsored are always based on objective analysis first.

Why Investing is Smarter Than Savings

In short, saving money is essentially hoarding. You might make a little extra on interest from a savings account, but it won’t amount to much. Investing, on the other hand, is about growing your money through the purchase of assets that appreciate in value or generate income. These assets can include stocks, bonds, art, and property. You’ll need to save and invest to reach your financial goals.

Why a Savings Only Approach Doesn’t Work

The price of everyday items rises over time due to inflation. If you check out the Consumer Price Index (CPI), you can see just how much prices have risen. In recent years, the CPI has averaged about 4%. Meanwhile, the money you’ve left under your bed has not risen with inflation. It has actually decreased in value. So assuming that the CPI stays at 4% over the next 10 years, your money will actually be worth about 30% less at the end of that period. Even if you put your savings into a savings account, the amount of interest you’ll earn won’t even come close to the 4% CPI.

Investing In Equities Is a Good Hedge Against Inflation

You don’t need a huge amount of capital. $1,000 is enough to get started. Thankfully, there are plenty of investment products on the market that can beat inflation, such as Singapore REITS, which yield as much as 9%. If you have the capital, you can even invest in perpetual income bonds, which give you regular payouts. Another good thing about equities is that they’re highly liquid. You can buy and sell them in a matter of minutes

You Can Also Boost Your CPF Account With Equities

If you intend to rely on your CPF account to retire on, you should know that the CPF only grows at 2.5% with your Ordinary Account (OA) and 4% with your Special Account (SA). If you have more than $20,000 in your OA and more than $40,000 in your SA, you can invest a portion of it in stocks. That will allow you to beat CPF’s 2.5% return with something like a Singapore REIT.

How to Choose the Best Brokerage Firm For You

Finding the right brokerage that aligns with your investment goals, educational needs and learning appetite is fundamental to your success as an online investor. Though all digital brokerage firms provide you with the convenience of investing online, their fees structure, platform features and customer support vary quite considerably. Find the right balance between different aspects of online investing using the following criteria:

#1Brokerage Fees

When choosing a broker, one of the first few things people will be concerned about is the fees charged by the broker. However, do note that this is not solely about the lowest commission fee. Firstly, you should consider how often you are planning to buy and sell shares. If you intend to buy and sell frequently, such as in the case where you are a trader, you will be inclined to choose a brokerage account with lower commission fees. Next, you should consider how much you are planning to invest. In the case of small-time investors, you should take extra caution on the minimum commission fee that will be charged for each trade, regardless of how small the amount you will be trading.

#2Usability of the App / Platform

While some may overlook this factor when choosing their brokerage account, this affects the convenience of investing for you. Different brokerages offer different trading platforms such as online trading platforms, iOS applications and android applications. In the case of mobile applications, do look into the interface of the applications and see if it is easy for you to navigate the application. Based on your preference, pick a platform suitable for you.

#3Ease of Opening Account

Another factor relating to convenience for the investor is the ease of opening a brokerage account. Generally, brokerage accounts which allow for Singpass sign-up are preferred as it takes away the hassle of filling up the details on the forms. Singpass allows for certain information to be automatically filled in the forms, hence you have lesser details to manually fill in or even none in some cases.

#4Scope of Products you can Trade

While selecting your preferred brokerage account, consider what you are planning to invest in. If you have plans to invest in not only Singapore stocks but also US stocks, you may prefer to find a broker that has access to both SGX stocks and those in the US market. Another case would be if you want to invest in other asset classes such as in CFDs, gold, REITs, you would then consider finding a broker that allows you to invest in these investments.

#5Minimum Funding

Before you invest, you should plan the amount you will be investing as this may affect your eligibility for certain brokers. This is due to the minimum funding requirement, in which an investor has insufficient investment capital to meet the requirement. This factor should not be overlooked, especially for new investors. There are also brokerage accounts that do not require minimum funding available, which investors with small capitals can consider.

#6Research Material and Insights

Different Brokerage firms provide different level of curated research material prepared by professional analysts which help investors interpret market behavior and understand stock performance of companies. Some brokers also hold webinars and events where professional investors/traders share their views on market direction and answer questions by clients.

Types of Investment Brokerage Fees or Costs

Commissions Fees

There’s no way around commission fees. Every time you execute a transaction, you’ll be required to pay such fees, unless the exception is stipulated by the brokerage firm. If you’re an aggressive trader, you’ll pay multiple commission fees in the long run. Hence, it’s important to weigh your options and consider a brokerage firm that fits your trading behaviour.

Spreads

Spreads refer to the difference in the selling price and buying price of a certain asset. When dealing with products with spreads, traders aim to move the value past the spread in order to profit from the transaction.

Clearing & Trading Fee

With a CDP account, you’ll be subject to clearing fees each time you complete a transaction with the Central Depository. At the moment, it’s at 0.0325% of the contract value. Aside from this, you also need to pay a trading fee which amounts to 0.0075% of the contract value as mandated by the SGX.

Online Brokerage Fee Comparison Singapore 2020

Brokerage FirmMin. Fees SG StocksMin. Fees US Stocks
Saxo MarketsS$10US$ 4
City IndexS$10 (CFD Stocks)US$15 (CFD Stocks)
CMC MarketsS$10 (CFD Stocks)US$10 (CFD Stocks)
IGS$15 (CFD Stocks)US$ 10 (CFD Stocks)
CGS CIMBS$15US$15
UOB KayHianS$18US$ 20
OCBC SecuritiesS$25US$ 20
DBS VickersS$25US$ 25
TD AmeritradeNot ApplicableUS$10.65
Philips SecuritiesS$ 8US$ 6.88

Difference Between Stocks CFDs and Stocks

With Stock CFDs (Contract for Difference), you do not own the underlying stock or asset but are simply purchasing a contract which allows you to speculate on the price movements of the underlying stock. With share trading, when you purchase a stock, you have legal ownership of the stock. In Singapore, you may be required to open a CDP (Central Depository) account where the stocks are held in this account under your name. The same applies for other asset classes as well, so while you may trade outright stocks, FX, commodities, ETFs, some brokers offer CFDs products on these assets. Another thing to note is that CFDs are a leveraged product, so which means you are only required to deposit a percentage of the actual notional amount of the asset you are purchasing and you profits or losses can be magnified. For example, if the margin requirement of a product is 2% and you what to buy an asset that costs SGD$100,000. You will only need S$2,000 of your own funds. If the asset appreciates by 1% and is now worth S$101,000, it means you have made $1,000 from your $2,000 - a return of 50%. Another way of looking at it is this way. A 2% margin means you are leveraged 50 times (1 / 2%), so your profits and losses are multiplied 50 times for a 1% move in the asset, 100 times for 2% move and so forth.

Types of Products offered by Online Brokerages

To be more specific, products can be differentiated between Asset Classes & Financial Instruments. Asset classes are what you can trade or invest in, and financial instruments are the different ways you can trade securities across asset classes.

Forex (FX)Asset Class

When people talk about forex trading, it involves the price movements of major, minor and exotic currency pairs across the globe. Some examples of these pairs are EUR/USD and USD/SGD. In essence, participating in forex trading is almost the same as going to the money changer. When you buy USD/SGD, you’ll receive (buy) USD in exchange (sell) for your SGD.

CommoditiesAsset Class

Commodity trading involves gaining exposure in natural or grown commodities such as gold, silver, energy (oil, natural gas, etc) and agriculture (corn, soybeans, etc). Commodities are an interesting asset class to trade in as you have to be fully aware of the economic, political and weather developments.

EquitiesAsset Class

Shares, otherwise known as stocks, are securities that signify part ownership of a company. This means, if you have Singtel or CapitaLand shares, you’re a part-owner of that company. Hence, It is important to understand what business the company is involved in. Stocks often offer dividends which could be a significant portion of your total returns.

BondsAsset Class

Bonds are called a Fixed Income instrument because when you own a bond, you entitle to fixed and periodic payments. So you can think of yourself as a lender of money to a borrower. And the payments are the interest you earned on the principal amount or the amount you lent.

IndexAsset Class

In the financial markets, an index is a financial measure of a certain portfolio of securities (be it stocks or bonds). In Singapore, the Straits Times Index (STI) tracks the performance of the top 30 companies listed on the Singapore Exchange. The 30 STI stocks were selected to best indicate Singapore’s economic health. You typically gain exposure in Indices via financial instruments called CFDs or by buying ETFs.

ETFsAsset Class

An ETF (Exchange-Traded Fund) is a collection of securities (normally stocks) which tracks or replicates the performance of an underlying index. One such example is the STI ETF, which tracks the Straits Times Index. ETFs can consists of various asset classes such as stocks, commodities, bonds, or a mixture of the above. Since an ETF is marketed as a security, it has a buy and sell price and can be traded on an exchange.

CFDsFinancial Instrument

A CFD is a contract between you and the brokerage to exchange the difference in the value of an asset between the time you first open a position and when you close it. Most brokerages offering CFDs have CFDs on the main asset classes such as FX, Equities and Commodities.

FuturesFinancial Instrument

Futures are financial contracts that obligate traders to transact an asset at a predetermined future date and price. Futures are traded on an exchange and you can buy futures on a variety of asset classes such as FX, Commodities & Equities and indices.

Mutual FundsFinancial Instrument

Mutual funds or Unit trusts are a pool of money collected from investors to be subsequently invested in a diversified basket of securities (such as stocks, commodities). Since funds will be used to buy a variety of securities and sometimes across asset classes, it is generally considered a safer investment.

How to Choose Which Financial Product to Invest In

Understand the products you want to trade

FX, Stocks, Commodities, ETFs, Indices are all different in their own way. It would be good to fully understand the specific product before deciding to take a position in them. In addition, you also have to keep abreast of the news in the financial markets, as this greatly influences price movements.

Understand your goals, time horizon and risk appetite

To select what to invest in along with how much to invest can be guided by these 3 things. First would risk as different investments have varying risks so you have to consider your own risk profile before investing in a certain investment product. Next, it would be goals that you hope to achieve out of your investment. Lastly, you need to consider the time you are willing to set aside for investment research as different investment products require varying amounts of effort to manage. Another form of time to consider is ‘time horizon’ which is how long would you be willing to leave your investments to grow. If you have a long time horizon, you may not necessarily need high return rates to reach your financial goals due to the power of compounding.

Understanding The Different Types of Investment Strategies

Passive Investing

Passive Investors prefer to take the safe route to financial security and are not very risk-averse. You’re definitely a conservative if you rely on time and the power of compounding interest to make money. They aren’t too worried about getting the highest possible returns as long as their investments are able to beat inflation. They are also big on principal protection, that is, they want to make sure that the original amount invested never decreases. A passive investor would buy blue-chip stocks with consistent performance

Growth Investing

Growth Investors are looking to gain (and lose) money within the shortest time possible. They have high-risk appetites and are willing to take losses for the chance at a bigger future payoff. Some growth investors are calculated gamblers, while others are “all or nothing” types. Many try to “time” the market, that is, they buy when prices bottom out and then sell when they peak. It’s not something for the amateur investor, as you need knowledge of chart reading, indicators, and fundamental investment analysis. If you have a high tolerance for losses and get a high from the volatility of quick trades, you’re definitely a growth Investor. For a growth investor, the type of stock to buy would be low priced stocks that are rather volatile.

Value Investing

The key difference between a value investor and a growth investor is that value investors buy “hidden gems” in the stock market at lower than expected prices. They would proceed to sell when the price adjusts back to expected but this can take much longer time. Value investors critically analyse the market and use some form of fundamental analysis to identify companies that are underpriced. One example of the kind of stocks a value investor would buy would be of a publically traded high-tech company which promise to solve real-world problems at scale within the next 2-10 years.

Hands-Off Investing

Hands-off investors prefer to let someone else manager their portfolios, usually fund managers or through an investment-linked insurance policy. Hands-off investing is convenient because you don’t need in-depth knowledge of the investment process or even what products are available. So if you prefer not to deal with the stress of managing your portfolio and want to pay someone else to do it, you’re a hands-off investor. The problem is that they’re at the mercy of whoever they hire, so your major concern is picking a fund manager who will get results. Just remember that your fund manager’s fee will eat into your investment returns.

Stock Trading in Singapore for Beginners

When investing, the key is diversification. If you were to invest in one or two stocks and these companies go bankrupt, you will likely lose all the money you have invested in these stocks. Hence to lower your risk, the idea is to buy different stocks where the ideal number to have in your portfolio is approximately 20 to 30 stocks. Alternatively, you can diversify by investing in different asset classes such as bonds, currency and REITs and not stick to solely stock investing. Another option would be to invest in ETFs or mutual funds which are diversified in nature. Here are the steps to start trading stocks in Singapore:

Step 1Check your eligibility

If you want to start trading investment products in Singapore, you must be above 18 years old and not an undischarged bankrupt at the time of application. Also, decide the minimum fund with which you are comfortable to start your investment journey.

Step 2Open a CDP Account

The Central Depository (CDP) account, managed by the Singapore Exchange, allows you to safely keep the shares you have bought. The CDP account can be created via this website

Step 3Open a trading account with you chosen Brokerage

This account allows you to buy and sell shares in the Singapore securities market. There are many different brokerage options for investors to choose from. There also may be the case of an investor having multiple trading with different brokerages.

Step 4Choose the stocks you want to buy

Find the trading symbol for your desired stock that you want to purchase. Some factors to consider when choosing what shares to buy is the industry, business model, management, growth indicators (share price or dividend yields), stability (debt/EBITDA ratio). And last but not least, what type of stock are you investing in and does it compliment you as an investor.

Step 5Place an Order

Place an order with your broker to buy or sell your shares. Before placing an order, decide what kind of order you will be placed, i.e. market order or limit order, and also how long the order is valid for, e.g. expires at the end of the trading day or valid till a specific date.

Step 6Regular investment portfolio review

How often you will review your investments likely depends on if you are a short-term or long-term investor. Regardless of what kind of investor you are, it is advisable that you review your investments from time to time so that you are able to make investment decisions or change investment strategies based on market movements if the need arises. If you are unsure, always ask for advice from a professional such as your broker or advisor.

What Does a Diversified Portfolio Look Like?

An investment portfolio that’s property diversified will exhibit the following characteristics:

Mix of Different Asset Classes

Asset classes include stocks, bonds, commodities such as gold, and even property. Each asset class is prone to having its own ups and downs, but it’s highly unlikely that all of them will fall at the same time.

Investments In Lowly-Correlated Industries

If you invest in gold Exchange Traded Funds (ETF) and invest in a gold mining company, they’re considered high correlation assets. That means that if gold falls, you can expect both investments to fall even though they’re different asset classes. So invest in assets that are aren’t closely correlated with each other.

Assets with Varying Rates of Risk and Return

It’s impossible to invest solely in low risk or high risk assets. Because low risk generally means low return and high risk means putting your entire investment portfolio in danger. The solution is to mix the two so that under-performing assets can be offset by the gains of your other assets.

How Do You Diversify Your Portfolio?

Diversification depends on your individual goals. Your portfolio must be diversified based on how long you want to stay invested (investment horizon) and what your financial end goal is. Ideally, you should speak to a stock broker or a financial adviser (FA) regarding your goals. The last thing you want to do is spread your capital around on random investment choices without knowing how well your investments will perform.

CFD Trading for Beginners

In a nutshell, CFD stands for Contracts of Difference whereby 2 parties agree to exchange the difference in the value of a specific asset from the time the position is opened until it’s closed. When you buy or sell a position, you can incur profit or losses depending on the direction the market moves. Given that a CFD is a derivative product, its value is based on an underlying asset. However, CFD trading may not be suitable for everyone and can result in losses that exceed your deposits, so please ensure that you fully understand the risks involved. Also, do take note of the overnight financing charges, an important difference between CFD trading and share trading, which can significantly reduce your profits. Some popular CFD Products Include:

Forex

It comes as no surprise as to why foreign exchange trading is a popular choice among CFD traders. When it comes to Forex trading with CFD, you don’t need billions of dollars to get started. Instead, you just adjust your position by analyzing the market movements and speculate whether a particular currency will move up or down in relation to another currency (currency pair).

Shares

One Key difference between CFD trading and Shares trading is that you will not have to pay Stamp Duty i.e. they are tax efficient as no taxable assets change ownership. While trading CFD's you have the option to go long or go short depending the micro movements in the market. Timing is everything when it comes to CFD trading, thus, it is usually not suitable for people who are unable to keep a close eye on the market movements in which case they may incur significant losses.

Cryptocurrencies

With Crypto CFDs you will have the opportunity to speculate on a number of popular cryptocurrencies such as Bitcoin, Ether, Litecoin, Ripple, Stellar, NEO and EOS. This means you can take advantage of the volatility closely associated with these cryptocurrencies by predicting the rise and fall of their value.

Frequently Asked Questions

What is an Investment Brokerage Firm?

An Investment Brokerage Firm enables you to buy and sell shares on the stock market. Every investor needs to choose an investment brokerage firm before they can start investing and trading. You'll want to choose a brokerage that understands your needs, especially if you're just starting out. Typically, you get charged commission fees each time you conduct an online trade. That’s why traders choose a brokerage firm with the lowest brokerage commission.

Who can open an online trading account?

If you’re above 18 years old and not an undischarged bankrupt, you can open an online trading account in Singapore. Even if you’re a foreigner working outside of Singapore, you can open a trading account any time you want as long as you meet the above requirements.

How much do I need to pay to open a trading account?

The initial deposit required by brokerage firms in Singapore varies. To accommodate the different risk appetites and budget of individual, brokerage firms offer different funding tiers. For example, Saxo Markets requires a minimum S$3,000 funding for a Classic Account whereas IG does not have any minimum funding requirements

How long does it take to process a new trading account?

The time it takes to successfully open an online trading account depends on the internal process of your chosen brokerage firm. It usually takes 10 working days to complete the process upon application submission.

What are the different types of trading markets in Singapore?

Singapore Exchange or SGX is the stock trading market in Singapore. It offers an extensive suite of investment products that include securities, derivatives, and commodities.

How do I open a CDP account?

There are 2 ways to open a CDP account. You can either go directly to the Central Depository to process your own account or seek assistance from an investment brokerage firm.

What is the difference between Cash Upfront Trading and Cash Account

Used as collateral, cash upfront trading requires you to pre-fund your account before you can start trading. Usually, this type of account has lower commission fees since your purchased stocks are held by the brokerage firm. Cash account trading, on the other hand, doesn’t require prepayment. It makes use of the available cash in the fund. This means you can only trade when there’s enough capital in your account. Without sufficient funds, you won’t be able to enter a trade transaction.

Whats the difference between a CDP and a Custodian Account?

These terms of more relevant when you are intending to purchase stocks and shares in Singapore. CDP is a depository account that applies to the securities market in Singapore. With CDP, you become the legal owner of the stock you purchase. Since the stock is under your name, you’ll have all the benefits of a stockholder. It also stores your SGX stocks in a centralized location, so you can buy and sell from different brokerage firms. The downside is that it costs more due to the other fees involved. With a custodian account, your stocks are in the custody of the brokerage firm. This means you’re not the rightful owner of your purchased stocks because they’re held under a trust. Despite its lower trading fees, you’ll still incur additional maintenance fees if you don’t fulfill the quarterly trade requirement. In Singapore, most brokerage firms hold your stocks with the CDP. So, even when you execute the trade through them, no one else owns the stocks but you.

What is margin trading?

Margin trading is done by borrowing money from your broker to execute a trade in the hopes of gaining profits. The profits (if any) are used to repay your broker. As such, you can start with a small investment, but the risk is significantly higher. Here’s an example, you can buy 250,000 USD/SGD with a margin of only 2%, which translates to 5,000 USD. This also means that you are leveraged 50 times. Because you are only using 5,000 USD to gain an exposure of 250,000 USD.

What is initial margin, maintenance margin and margin call?

Margin comes in two types. Initial margin is the deposit needed for each trade that you enter in. If your initial margin falls short along the trade process, you’ll be given a margin call which alerts you each time your funds fall below the minimum requirement. As such, in order to keep your position open, you must ensure that the available funds in your account meets the maintenance margin.