Which Broker Should I Choose?
Very often, I was being asked this question:
Please recommend SG stock trading platforms that are low commission and reliable.
My short answer, if you want a non-custody account where your shares goes into a CDP account,
a) Buy using the DBS Cash Upfront trading account.
b) Sell using the FSMOne trading account.
This is one of the favorite questions asked by many newbies who wish to trade the Singapore stock market.
Only 0.18%
$18 minimum is the lowest brokerage fee you can get in Singapore for trading Singapore-listed stocks, and DBS Cash Upfront is the way to go.
Compared with the rest, it is way cheaper than those charged by the rest of the brokerage firm. DBS cash-upfront is 35% cheaper than all the other brokers (0.275% or minimum SGD 25).
Please note that SGD 18 does not include the CDP Clearing Fee, SGX Trading Fee and GST.
Why So Cheaper And Any Catch?
The key lies in being cash-upfront. You have to deposit cash upfront into an account with DBS Vickers to buy stocks. DBS Vickers is able to charge lower commission rates because the risk of customer not paying up for his share purchases is zero.
How to Sign Up?
Signing up for DBS Vickers Cash Upfront is rather simple as you only need your internet banking access.
1. Scan or use your Smartphone to take a picture of your NRIC Front and Back. (2 JPG images)
2. Login to your DBS iBanking.
2. Click on Apply.
3. DBS Vickers Online Trading Account
4. Follow each instruction (you will also be asked to upload your NRIC Front and Back.
5. Wait for 3 working days and you will received your DBS Vickers Cash Upfront Trading Account confirmation.
I-Banking Shares Trading
Have been using POSB or DBS I-Banking a couple of times to buy and sell stocks and it is quite user friendly. Everything is done online.
You will need DBS Internet Banking to access Cash Upfront Trading.
Steps to Transfer Fund:
1. Login to your DBS iBanking.
2. Click on Invest.
3. More Investment Services
4. Top Up Cash to DBS Vickers Account
5. Transfer the required funds from your Savings Account into your Cash Upfront Account.
Steps to Trade:
1. Login to your DBS iBanking.
2. Click on Invest.
3. DBS Vickers Online Trading
4. Place the Buy Order (the funds must be in your Cash Upfront Account before you can buy). Buy commission 0.18%, $18 is the minimum commission.
5. Once the Buy Order is executed, your funds will be deducted immediately.
6. If you decide not to trade, you can withdraw available funds from your Cash Upfront back into your Savings Account.
Notes:
1) Be sure to fill up and submit the GIRO form for EPS if you want the money to be credited directly into your Savings Account. Otherwise, a cheque will be mailed to you.
2) You cannot sell your stock using Cash Upfront Account once they are credited into your CDP account after T+3 (T means Trading day, for example you buy or sell on 19 May, T+3 will be 22 May). You will then need to use a normal trading account to sell and incur the standard brokerage fee, $25 minimum.
3) For selling of shares, you are free to use other brokers because DBS Vickers will charge the standard commission of 0.28%.
Trading Account Backup
I do have accounts with several brokers. This is because of the bad experience with the inadequate reliability of the online trading platform of Singapore brokers, especially on days when trading volume is high. By having several brokers, if you cannot log in on one particular online account, you can still try the others.
Having said that, it is best to keep your trades to one broker, at most two. The buy/sell limits granted by the Singapore broker depends on the volume business he gets from you. If you need more firepower, you have to fire more shots using the same broker.
By using one broker exclusively, you can use that broker to track your portfolio accurately and keep good trading records. A good online platform should update the portfolio automatically. Trading records are vital to traders who want to become good traders. I doubt if any experienced traders reading this post will disagree with that.
Contra Players
If you are a contra player, you cannot buy on contra as your cash is deducted immediately with cash-upfront (buy now, pay 3 days later Uniquely Singapore). That is the catch. However, I don't think this is a disadvantage. So far, I have never seen a consistent winner in the Singapore stock market using contra. Conversely, I have encountered and read about several market participants getting burnt using contra. It is hard enough to be a market timer. To get your timing right to an accuracy of 3 days is even harder. It is possible to make good profits in one or two occasions using contra. Who doesn't have luck on his side sometimes? But to be profitable consistently by playing contra? I think you will have better chance of getting rich by working hard at your day job.
Custody Account Vs DBS Cash Up-Front
Unlike DBS Cash Up-Front, for Other Bank that charges you 0.18 for brokerages fees, the bank is the custodian for your shares and you can only sell yourself using their platform.
This means that you are not the registered holder of the shares. Which means that you cannot attend AGM and receive annual reports.
Also, note that some bank may not charge you now for holding shares in thier custodian account but they may impose a charge if they wish to in the future.
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