How to Open a Brokerage Account in Singapore

How to Open a Brokerage Account in Singapore

Interested in investing? Before you start buying bonds, stocks, and other securities, you should first open a brokerage account.

A brokerage account is what investors use to transfer money, much like a regular bank account, but you can also use it to invest and buy and sell stocks, mutual funds, bonds, and other securities. A brokerage account in this case is essentially your investment wallet.

Opening a brokerage account is simple, you simply need to find a brokerage firm first. While brokerage firms in Singapore are almost usually similar in both facilities and fees (charging around S$25), you will still find some differences that, depending on your preferences, might help you make a more personal choice.

These include the level of support they provide, the markets these brokerage firms cover, how easy the platform is to use, and even the minor difference in fees.

When you’re starting, there are two kinds of brokerage accounts you need to open.

Two Brokerage Accounts an Aspiring Trader Must Open

1. Stock Brokerage Account

A stock brokerage account is something that you open with your chosen stock brokerage firm/s.  This account essentially functions as your trading account. It lets you access the securities exchange, allowing you to buy and sell stocks, among other listed securities.

There is no limit to how many brokerage accounts you can have, and you can open a trading account with different brokerage firms.

2. CDP Account

A Central Depository (CDP) account is an account where the stocks, funds, and other securities you buy on the securities exchange are automatically stored.

A Central Depository account is operated by the Singapore stock exchange, also known as Singapore Exchange or  SGX, and acts as a savings bank account. Unlike a stock brokerage account, an owner can only have one CDP account.

The Difference

The simple difference is that a stock brokerage account is for trading, and a CDP account is for safekeeping. Having a brokerage account and a CPD account ensures your assets are in order and kept safe, while you can go off with stock trading and buying and selling securities.

Note: Investors can choose to open a custodian account with their chosen firm, letting your chosen broker manage your assets as custodians and keep your assets secure. Having a custodian account means you are no longer required to have a CDP account.

Now that you know the difference between the two accounts that you typically need, let’s find out how you can get started.

 

Things to Look Out for Before Opening a Stock Brokerage Account

1. Brokerage Fees

There is actually not much difference when it comes to fees between major brokerage firms in Singapore, barring a few outliers. Refer to the table below:

Brokerage Minimum Commission Fees Trading Fee
(as percentage of contract amount)
Below S$50,000 S$50,000 – S$100,000 Above S$100,000
CGS-CIMB Securities S$25 *0.275% 0.22% 0.18%
Citibank Brokerage S$28 0.25% 0.20% 0.18%
DBS Vickers S$25 0.28% 0.22% 0.18%
FSMOne S$8.80 flat fee
Interactive Brokers (IBKR) 0.08% 0.08% 0.08%
KGI Securities S$25 *0.275% 0.22% 0.18%
Lim & Tan Securities S$25 0.28% 0.22% 0.18%
Maybank Kim Eng Securities S$25 *0.275% 0.22% 0.18%
Moomoo S$0.99 0.03% 0.03% 0.03%
OCBC Securities S$25 *0.275% 0.22% 0.18%
Phillip Securities (POEMS) S$25 0.28% 0.22% 0.18%
Saxo Markets S$5 0.08% 0.08% 0.08%
Standard Chartered S$10 0.20% 0.20% 0.20%
Tiger Brokers S$2.88 0.08% 0.08% 0.08%
UOB Kay Hian S$25 0.28% 0.22% 0.20%

 

FSMOne, Interactive Bankers, Moomoo, Saxo Markets, Standard Chartered Bank, and Tiger Brokers charge lower commission fees because they are usually custodian accounts that can hold your assets instead of on a CDP account.

Custodian accounts let your chosen broker hold your assets, open you to international markets, and provide you with more privacy, but because your broker functions as the nominee (hence why a custodian account is also known as a nominee account), you are not able to act as a shareholder. A CDP account is more expensive, but you retain full shareholder rights, which is why Singapore Citizens prefer using CDP accounts.

2. Types of Investment Products

You should also take a look at the types of investment products that your Singapore broker makes available to you. Some brokerages offer access to unit trusts, options, ETFs, futures, bonds, CFDs, and other securities.

As an investor you might want to take all of these into consideration; otherwise, it’s fine to stick good ol’ stocks and ETFs.

3. Market Access

You don’t have to limit yourself to Singapore stocks! Your brokerage account in Singapore, depending on your chosen brokerage, can access US stocks, and other stocks in foreign markets like Hong Kong, Malaysia, and more.

Keep in mind that your shares from a foreign stock market can only be held in a custodian account and not on your CDP account. The average local brokerage charges extra fees for holding foreign shares, and this can add up if you plan to invest a lot overseas.

To keep expenses on those fees down, it might be a better idea for investors to work with a foreign firm directly (i.e. Hong Kong firm for Hong Kong stocks).

4. Trading Platform

Technology has improved to the point where it’s fairly easy to conduct trading through your mobile device. So if you often do so with your cellphone, among other things, you might want to consider looking into a firm that provides a trading app that fits your tastes.

Consider checking different brokerages for their trading platforms to get a feel for your options, and to intuit the applications. Complicated interfaces may lead to mistakes, and when it comes to trading, mistakes may cost a lot of money.

5. Support

As an investor, you want your stock broker to be dedicated and a single phone call, email, or text away. You want timely service that gets the job done, and you also want someone who would not put their personal interest over yours but will be candid with their advice nonetheless.

Most of all what you really want is a stock broker that understands your investment goals.

An intuitive kind of understanding between you and your stock broker will make for smoother transactions, and they won’t bother you with short-term trade speculation if your objectives are for long-term trading.

6. Reputation

Last but certainly not the least is to keep track of brokerage reputation. Not only do you want a brokerage that has a clean track record, but one that also reveals exemplary performance.

There have been instances of brokerage firms going under, taking vast amounts of assets owned by their clientele down with them. So when looking for a brokerage in Singapore, be sure to choose one that you can trust with your hard-earned money.

Luckily, a Singapore citizen has great choices for brokerages. Some of them have been around for decades, like DBS Vickers which has been around since 1986, Maybank Kim Eng Securities established way back in 1972, and more.

 

How to Open a Brokerage Account in Singapore in 3  Steps

Setting up your brokerage can be done in a few simple steps, including application for your CDP, all of which are important before you can start investing.

  1. Find a suitable brokerage firm
  2. Apply to your chosen firm
  3. Apply for a CPD account

 

1.) Find a suitable brokerage firm

A resident of Singapore has a lot of options for brokerages. As established earlier in the article, there are a variety of factors that you should consider before making a choice, despite ultimately providing the function of letting you trade.

Investors may choose to deal with a firm that they already have a bank account with, and for that reason, Singapore banks are a good option.

2.) Apply to chosen brokerage firm

Application is made fairly simple in the online age. Most, if not all brokerages in Singapore give you the option of filling out an online application form.

If you prefer to meet face to face with people who will be handling your money, you can also visit their offices along with any important documents that are required. Brokerage firms also tend to set up booths during roadshows and other investment-related events, where you can also apply.

3.) Open a CDP account online

To open a CDP account, you are required to have a bank account with one of the following banks in Singapore:

  • Citibank
  • DBS/POSB
  • HSBC
  • Maybank
  • OCBC
  • Standard Chartered Bank
  • UOB

You also need to be at least 18 years old and not an undischarged bankrupt. A non-Singapore resident may need to prepare different requirements but is otherwise allowed to apply for CDP.

You can apply for your CDP account online via the SGX website by filling an online form or using your SingPass for a faster application to register your CDP account. Or you can ask assistance from your chosen brokerage firm who will help you set up both your brokerage account and CDP account.

You also have the option of mailing the form, by first downloading and completing the CDP application form found here, adding your supporting documents, and mailing it to the CDP building.

 

After Your Application

Once you’ve submitted your application, you will need to wait a few weeks until you receive your credentials, sent by mail to your home address. This includes:

Brokerage Account:

  • Brokerage account ID
  • Password
  • Pin code for Phone Transaction
  • OneKey 2FA Token Link

CDP Account:

  • Account number
  • Password
  • Another copy of OneKey 2FA Token link

Once you receive these, you’ll be able to start investing.

 

The Bottom Line

Setting up your accounts is the first step to becoming a bonafide investor, simply because you won’t be able to trade without having one. Be sure to consider all the important factors, especially when choosing a firm, to save you extra hassle down the road.

Now if you’ve got an investment opportunity lined up and are looking to get funding through a loan, we at Instant Loan can help you find the best loan you can use with our loan comparison services in Singapore.

Related: How to Start Your Investment in Singapore

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