Updated: Aug 2, 2020
In this article, we will share the 5 brokerage platforms WE PERSONALLY USE to trade Stocks, Options, Forex, and Futures.
After using all the popular brokerages in the market, we conclude that there is no single best brokerage platform in the market, as it depends ultimately on what the retail investor or trader needs. These are some common differences:
Some prefer a reputable brokerage with local presence
Some wants premium customer service
Some wants a sophisticated platform to trade swiftly
Some wants a low commission brokerage
Some wants convenience and simplicity
Henceforth, we are here to show you our personal experiences with these 5 brokerages so that you can decide which is the best brokerage you want to work with. Please note that none of these recommendations are sponsored.
The 5 brokerages we use (most to least favourite):
DBS Vickers Securities
Saxo Markets (Singapore)
Standard Chartered Online Trading
Why Interactive Brokers?
Interactive Brokers offers the widest range of product listings among the 5 brokerages. *Seriously, whatever you want to buy, 99% of the time they will have it (except Singaporeans are not allowed to trade SG stocks on this platform).
Some products you can trade include:
Stocks listed in United States Stock Exchanges such as Facebook; Amazon; Netflix; Microsoft; Apple; Alphabet a.k.a. Google etc.
Stocks listed in Hong Kong Stock Exchange such as Alibaba (also listed in US NYSE); Tencent; Ping An Insurance; Bank of China; Meituan Dianping etc.
Foreign Exchange a.k.a. FX (Almost all FX pairs including USD.SGD for exchanging your Singapore Dollars to US Dollars to buy US Stocks and SGD.HKD for exchanging Hong Kong Dollars to buy HK Stocks)
Many other global Stocks, Options, and Futures (e.g. Crude Oil, Natural Gas, FX, Gold, Silver, Platinum, Palladium, Index, Bitcoin etc.)
Interactive Brokers offers one of the lowest commissions. Currently, we are on the Interactive Brokers Pro Plan - Fixed Rate Pricing. As we mainly trade US and HK stocks, we will only show the commissions below:
Commissions for US stocks: 0.005 USD per share (minimum 1 USD)
Commissions for HK stocks: 0.08% of trade value (minimum 18 HKD)
Throughout this article, we will assume that your starting investment amount is 10,000 SGD for simplicity in explanation.
“How much would it cost in commissions to buy shares of US largest company – Apple Inc?”
To buy Apple Inc, which is a US stock, you first have to exchange SGD to USD (in a cash account).
Interactive Brokers allows u to trade USD.SGD at market rate to convert SGD to USD. This saves you the currency conversion costs (i.e. spread) that banks charge when you exchange money. (Come on, most of us will agree that banks’ exchange rates s**ks)
For example, at the time of this writing, USD.SGD can be traded at 1.3751 on Interactive Brokers while the foreign exchange according to DBS website is at 1.3847.
That means you can convert 10,000 SGD to USD on Interactive Brokers and get 10,000 SGD ÷ 1.3751 = 7,272 USD (1 USD commission will be charged for this trade) as shown below.
On the other hand, in DBS Vickers Securities: I will only get approximately 10,000 SGD ÷ 1.3847 = 7,221 USD.
That’s a difference of about 51 USD (70 SGD) and it's only one way. Say you want to convert USD back to SGD, that's another 70 SGD!
Even if you are rich, these costs will add up as your investment amount grows larger in the future.
Comparing against other brokerages listed in this article:
TD Ameritrade requires funding in USD. Thus, you might have to exchange SGD and USD through local banks at a poor exchange rate
Saxo Markets currency conversion fee is about 1% (i.e. $100 SGD) according to their weblink
Similar to any other banks, Standard Chartered foreign exchange rate is bad
We conclude that currency exchange is best done on Interactive Brokers compared to others.
After getting your USD, let’s look at the trading commissions to buy Apple shares on Interactive Brokers.
Apple Stock Price at the time of writing: 375 USD per share
No of Shares: 7,221 USD ÷ 375 USD = 19 shares (round down)
Commissions: 0.005 USD x 19 = 0.095 USD
As the min commission is 1 USD, this trade will costs 1 USD
The picture below shows how to execute the trade on Interactive brokers and the commissions charged.
“How much would it cost in commissions to buy shares of China's largest company – Alibaba Group?”
Next, let’s look at the trading commissions to buy Alibaba shares listed in Hong Kong Stock Exchange on Interactive Brokers.
Alibaba Stock Price at the time of writing: 243 HKD per share
Currency conversion: 10,000 SGD x 5.63582 = 56,358 HKD
No of Shares of Alibaba Stock: 56,358 HKD ÷ 243 HKD = 232 shares (round down)
However, like Singapore Stocks, Hong Kong Stocks needs to be bought in quantity of 100s shares.
Therefore, you can only buy 2 x 100 shares of Alibaba stock
Total investment: 200 x 243 HKD per share = 48,600 HKD
Commissions: 48,600 HKD x 0.08% = 38.88 HKD or 6.90 SGD
The picture below shows how to execute the trade on Interactive brokers and the commission charged.
We conclude that Interactive Brokers offers the lowest commissions if we compare to other brokerages:
TD Ameritrade: Flat fee of 10.65 USD (*Shifting to zero commissions)
DBS Vicker Securities (Cash Upfront): 0.12% (Min 10.00 SGD)
Saxo Markets: Minimum 0.02 USD per share (Min 10.00 USD)
Standard Chartered Online Trading: 0.25% (Min 10.70SGD)
Other perks of Interactive Brokers include:
FAST internet banking transfer to deposit SGD or USD within 1 working day
US$250,000 Securities Investor Protection Corporation (SIPC) insurance coverage
Sophisticated platform with all types of orders available in real time
Interactive Brokers is publicly listed on US stock exchanges
Offers really low margin interests (0.86% to 1.59% p.a.)
Some downsides of Interactive Brokers include:
Monthly fee of 10 USD. However, you can see the savings on currency conversion and commissions easily outweigh the monthly fee.
No physical branch in Singapore for those looking to knock doors. (Really? This is the digital era) Nonetheless, they are planning to open a branch in Singapore soon. Read here for more.
Their trading platform is not the easiest to use for beginners (You can find tutorials on YouTube on trade executions or simply PM us to ask).
Pretty lousy charting platform for technical analysis (You may use platforms like TradingView, Thinkorswim or TC2000 to supplement your charting needs)
You can’t trade Singapore Stocks on this platform
"Then, why do we use TD Ameritrade if Interactive Brokers is good enough?"
TD Ameritrade offers a very sophisticated software known as Thinkorswim which provides real time data (including after-market data), good charting for technical analysis and comprehensive Options risk profile analysis. We also love the Stock Hacker scanner that allows you to scan for all the companies listed in US and filter according to technical or fundamental indicators. We believe that Thinkorswim is a powerful free software that is good enough for the average retail investors and traders. By funding an amount more than 3,500 USD, you also get to have real time price charts, instead of a 15 mins delay (this matters for short-term traders).
Thinkorswim Stock Scanner
Thinkorswim Stock Chart (Featuring S&P 500 ETF - SPY)
Thinkorswim Options Risk Profile Analysis
Take note that TD Ameritrade Singapore announced today that they will reduce the commission to 0 USD (FREE!) with effect from 3 Aug 2020. This is really promising and fortunate for retail investors. The only downside is TD Ameritrade requires funding in USD, if you fund in SGD, your SGD will be automatically converted to USD by your banks’ exchange rate (which is lousy). Therefore, one way to do it is that you exchange your SGD to USD on Interactive Brokers (by trading USD.SGD under FXCOV) and transfer it to TD Ameritrade through a multi-currency bank account to save on currency conversion costs. Yes, we are misers. You can read more about the upcoming free commissions on TD Ameritrade here.
Other perks of TD Ameritrade include:
The platform is more intuitive to use than Interactive Brokers
Able to write scripts for scanning companies and trading setups
Comprehensive indicators and customisable studies to add on price charts
Very good customer support (via instant messaging)
TD Ameritrade is publicly listed on US stock exchanges
Upcoming free commissions
Earnings date indicated on the price charts to prepare traders
Nice market opening bell to excite you
Some downsides of TD Ameritrade include:
You can’t trade Singapore Stocks on this platform
It is not a beginner-friendly platform to buy & sell stocks
Moving forward, the new zero trading commissions incentive may entice us to move majority of our portfolio over to TD Ameritrade. We will see how it goes and update you accordingly.
"Why get DBS Vickers Securities if Interactive Brokers and TD Ameritrade are good enough?"
Simply because we can buy Singapore stocks with DBS Vickers Securities and it is cheaper than most local brokerage in terms of commissions charged at 0.12% (min $10) for a cash upfront account! Also, it offers a seamless transfer of your money from your DBS bank account to the brokerage account. The brokerage platform is simple to use (i.e. just simple buy and sell function) but not good enough for advanced traders.
We also chose DBS Vickers Securities because it offers the Share Financing Scheme where you can borrow additional funds at 2.99% interests p.a. to invest. (Not for the risk averse) Read more about Share Financing here. This is a way to leverage your investment returns but do note that leverage is a double edged sword. We will cover more about DBS Share Financing Scheme in another post and how we use it to increase the yield of our SG REITs portfolio. If you are keen click here to stay updated of the post.
“How much would it cost in commissions to buy shares of Singapore's largest company – DBS Bank?”
Let’s look at the trading commissions to buy Singapore largest company - DBS shares with 10,000 SGD on DBS Vickers.
DBS stock price at the time of writing: 20.4 SGD per share
No of shares of DBS Stock: 10,000 SGD ÷ 20.4 SGD = 490 shares (round down)
However, Singapore stock needs to be bought in quantity of 100s shares.
Therefore, you can only get 4 x 100 shares of DBS Stock
Total investment: 400 x 20.4 SGD per share = 8,160 SGD
Commissions: 8,160 SGD x 0.12% = 9.79 SGD
The problem with buying stocks on SGX is that there are other transaction costs such as
Clearing Fee (CDP imposed): 0.0325% X 8160 SGD = 2.65 SGD
SGX Trading Fee: 0.0075% X 8160 SGD = 0.61 SGD
Total costs to invest in 400 shares of DBS stock = 13.05 SGD ++ (not inclusive of GST)
That’s why we think there is still room for improvement to make investing on SGX listed stocks cheaper.
"What about the remaining two brokerages – Saxo Markets and Standard Chartered?"
Saxo Markets brokerage acts as a spare account for us and you will be able to trade both international and Singapore stocks on this platform.
The platform is sophisticated yet easy to use thus making it suitable for beginner to advanced traders. The downside is its expensive currency conversion costs.
We also use Saxo Markets as a referral cash cow where you can get 350 SGD for referring someone to open a new account and new account owner get 100 SGD as well. You can read more about it here. You could open an account grab the referral fee, refer your friends for more referral fees and consider your options whether to stay and trade on this platform. Take note that you are restricted to only 5 referrals per quarter. Be careful on this because the 6th person you refer will not get any referral fees and you will experience an awkward time with your referral.
Why did we use Standard Chartered Online Trading? We don’t know. Rumours has it that it is good and cheap, but we beg to differ. Probably if you are a premium banking customer of Standard Chartered Bank, you can get better foreign exchange conversion fees, lower trading commissions and some upgraded customer service like priority queue at the bank with coffee service or something.
Like DBS Vickers Securities, the trading platform is too simplistic (simple buy & sell), and it does not have the functions that we need to execute advanced trades.
"One last tip to end this article"
If you are buying through a local brokerage that charges high trading commissions, your investment amount must be large enough to make mathematical sense.
Example: If the minimum commission was 10 SGD x 2 = 20 SGD (Buy & Sell) and you only invested 300 SGD to buy a SG stock. The commission would cost you 20 SGD ÷ 300 SGD = 6.7% of your total investment.
That means that your investment would need to gain 6.7% returns to just make back the commission costs. The battle was already half-lost before it even began!
On the other hand, if you invested 3,000 SGD instead, the commission would cost you 20 SGD ÷ 3000 SGD = 0.67%. This is a much lower percentage for your investment returns to break even.
All these brokerages do offer referral incentives in cash but we are not writing this article because we “gian” (desperate for) the referral fees. If you want us to refer you so that you can get a few hundred bucks to start investing with, just drop a message on Facebook and we will send you the referral link. No hard sell!
This article is just a summary of our experiences and we hope this will help you save some extra pocket money. We may not know all the brokerages available in the market and likely there would be a better one somewhere. Nonetheless, we are keen to hear some better Lobang if you have any, and feel free to share in the comments section below.
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