Heartland Boy has received a few enquiries from readers on the stock brokerage company that he uses to purchase and sell his shares in Singapore. For the uninitiated, a stock brokerage firm allows you to buy and sell shares on the stock market. For providing this service, brokerage companies charge a commission fee for each transaction that the customer makes. To improve your returns from the stock market, aside from the obvious actual performance of your stocks, it is just as important to pay attention to your transaction expenses.
When Heartland Boy first started investing, he was using established stock brokerage accounts such as DBS Vickers and POEMS. However, this all changed when the topic of investment came up during one of those dates that Heartland Boy and Heartland Girl had. Heartland Girl shared that she was using the Standard Chartered Online Equities Trading Account and how its commission fees was the lowest. Since that fateful day, Heartland Boy opened a stock brokerage account with Standard Chartered and became a convert. He is a satisfied customer who would like to provide a positive review of Standard Chartered’s online brokerage platform and why he thinks Standard Chartered Brokerage is the cheapest brokerage with the lowest trading fees in Singapore.
Advantage of Using Standard Chartered Brokerage
Standard Chartered Is The Cheapest Brokerage In Singapore
As Heartland Boy adopts a stock selection strategy known as Value Momentum (made famous by Adam Khoo), he may commit more transactions than the typical “buy and hold” value investor. Further, given that his investment size is relatively small, he could ill afford to allow minimum commission fees to form a significant percentage of his transaction costs. Therefore, given its low commission fees, Heartland Boy made the switch to Standard Chartered Online Equities Account in a heartbeat.
Despite recently increasing its minimum fee from zero to $10, Standard Chartered online brokerage is still the cheapest brokerage in Singapore! Standard Chartered brokerage levies a minimum commission of $10 or a flat commission fee of 0.2% of the transaction value, whichever is higher. This is significantly lower than the commissions levied by POEMS and DBS Vickers. (both charge a minimum commission of $25 or a flat brokerage fee of 0.28% of transaction value) Note that it can be even lower as the minimum commission fee of $10 does not apply if you happen to be a Priority Banking customer with Standard Chartered. Unfortunately, Heartland Boy does not have an Asset Under Management (‘AUM’) of S$250,000.
To illustrate the value proposition of Standard Chartered brokerage, it is best to compare the brokerage fees involved in a hypothetical scenario whereby Heartland Boy attempts to purchase 10,000 shares of Dutech.
Fees on Standard Chartered Brokerage
*The $1.96 shown reflects standard market fees which consists of SGX Clearing Fee (0.0325%) and SGX Trading Access Fee (0.0075%). These are applicable as long as the stocks are listed in SGX.
Fees on DBS Vickers
As shown in the 2 diagrams above, for the same purchase, the cost incurred using the Standard Chartered Online Equities Trading Account is $11.96 while the cost incurred on DBS Vickers is $28.85. The transaction expenses are 0.24% and 0.59% respectively. Multiply it by 2 would give you the total transaction cost of buying and selling the stock. Therefore, for this purchase of Dutech, Heartland Boy would be in the money as long as Dutech returns more than 0.48% during his holding period. This will not be the case if he had not purchase his stocks via the Standard Chartered online account.
Disadvantages of Using Standard Chartered Brokerage
1. Standard Chartered Brokerage Does Not Deposit Your Shares In Central Depository Account
So here is the catch, the reason why Standard Chartered is able to offer such a low commission fee compared to its competitors is because the shares that you purchase are not deposited into the Central Depository Account*. (‘CDP’)
*Note that CDP charges a fee to these brokerages for keeping the stocks with CDP.
Central Depository Account (CDP)
For Standard Chartered brokerage, the shares that you purchase are held in a custodian account under Standard Chartered Bank. Therefore, the CDP is bypassed in this process, and along with it, the fees associated with using a CDP.
Of course, it will be good to have your shares deposited into the CDP since the share certificates are under your name. Nothing feels better to have a share certificate or a land title bearing your own name. Moreover, the CDP is backed by SGX. As a custodian of your shares, it may also mean that you could miss out on important events such as Annual General Meetings or voting at Extraordinary General Meetings. Heartland Boy managed to get around this by applying with Standard Chartered at the earliest notice of such corporate events. This was how he managed to attend QAF’s AGM and ask the directors some burning questions.
However, readers should note that the custodian arrangement is not something peculiar as all other brokerages would also deposit the shares that you have purchased from overseas bourses into their respective custodian accounts. The CDP is simply a uniquely Singapore (SGX) phenomenon. Since the custodian arrangement is common, the only risk that remains is the counterparty risk. In the unlikely event that Standard Chartered closes shop, it states that the shares will be returned to the client or will be transferred to another brokerage of the client’s choice. In addition, Standard Chartered is a online trading platform and it does not provide brokers.
2. No Charting Tools On Standard Chartered Online Trading Account
Another disadvantage is the lack of charting tools on Standard Chartered Online Equities Trading Account. Obviously, there is a cost to providing such services, and as a low-cost service provider, Standard Chartered brokerage has removed these fanciful charts. It is no different from paying a lower fee on a budget airline only to find that your fee does not cover food and entertainment.
Since Heartland Boy practices value momentum, having charting tools such as moving averages are very important to him. To get around the lack of charting tools on Standard Chartered brokerage, he simply uses the free charting tools provided by the other brokerages that he still maintains. Other free resources are social investing platforms such as InvestingNote. In this manner, he gets to enjoy the best of both worlds!
Charting tool: Moving average of Dutech
3. Standard Chartered Account Is Not linked To SRS Or CPFIS
Since the shares that you purchase are not deposited into CDP, Standard Chartered Equities Account is obviously not compatible with CPFIS or SRS. Therefore, if you have excess money sitting in the CPF or SRS, you would have to open a brokerage account with one of the 3 local banks. Yes, Heartland Boy would encourage you to go through this hassle, since he is an advocate of using your SRS for long-term investment and retirement planning.
Conclusion Of Standard Chartered Brokerage
Readers can tell that Standard Chartered Brokerage only stands out for one advantage- charging the lowest commission fees in Singapore. But this is a reason so strong that it has compelled Heartland Boy to overlook the rest of the disadvantages. But do take note that a more pertinent question is how much counterparty risk are you willing to bear for low fees?
Hey, do you know that Standard Chartered Bank also provides one of the best cash back credit cards in Singapore? Read more about it in Heartland Boy’s review.
[Note: This article was published in 2016 before the advent of ultra low-cost online brokerages such as webull, uSMART, Tiger Brokers and moomoo. If you want to know how these ultra low-cost online brokerages fare, check out my article comparing their pros and cons here.]
Good for short-term trading with smaller capital base. 🙂
Can combine with normal brokers for long-term investing when position size grows bigger and lower commission rate become immaterial.
Hi Createwealth8888,
I agree wholeheartedly! that is indeed my strategy going into the long-term once my portfolio accumulates.
No diff with the Kim Eng (Maybank) Prefunded acct leh. For Singapore market, its also $10 with Kim Eng being the custodian.
Hi Philip,
Maybank is cheaper because its rate is either 0.18% or $10, whichever is higher. SCB’s is 0.2% or $10, whichever is higher.
Hi there,
i would like to know your opinion on what brokerage account you think is best for a long term buy and keep investor. Transaction fees are not massively important i guess. DBS and OCBC are very reputable banks but they charge custodian fees, which will slowly but steady eat up a portion of the portfolio. What are your thoughts?
Cheers and happy 2017!
Hi Pablo,
Happy 2017 too. Thanks for dropping by my website.
Do you mean that DBS and OCBC charge custodian fees for foreign stocks? As far as I am aware, Singapore stocks are held in CDP and there’s a fee to it. Well, its “safer” to have your stocks held in CDP rather than anywhere.
Thanks for super fast response! Yes, they charge 2 SGD per month per position for non SGX stocks. They waive it if you trade six times a quarter but for a buy and keep investor these fees will apply and, if we think of a 10 years investment period, that’s SGD 240 per position!
Hi Pablo,
Thanks for enlightening me. I have not traded foreign stocks yet so all these are new to me!
Yea, I’m curious if SC charges custody fees for US stocks/ETFS etc. held.
According to https://av.sc.com/sg/content/docs/sg-fees-schedule.pdf, there aren’t any?
You are right !
SC has NO custodian fees for any share held, be it an SGX share or an int’l share. This is one well-known trait of the SCB online trading platform – lots of savings from this feature, hopefully they don’t chg this in future.
Today,,, the cheapest brokerage is DBS Cash Upfront Account – Minimum $10 or 0.18% whichever is higher,… there will be a $5.00 rebate for every trade done ! This offer is till June 30th., 2017 !
Hi, if we are only buying STI ETF on a monthly basis for an amount of $1200, will the cheapest be ocbc blue chip investment plan instead? Since it will just cost 0.3% or $5, which in this case is $5.
For standard chartered, it will cost $10.70 instead.
Hi Hilary,
I think you are absolutely right. The fees are cheaper for OCBC Blue Chip on this basis. However, note that OCBC Blue Chip only offers 19 counters.
Dear heartlandboy,
Don’t mind, am hoping to pick your thoughts. Now that the SCB trading platform has withdrawn the stop loss function, does it affect the way you trade?
As such, do you have an alternative value for money platform with the stop loss function to recommend? I am currently not able to locate such a provider.
Hi Wee,
Thanks for visiting my blog. I must admit that I do not use the stop loss function. I also do not trade. I am a 90% value investor, 10% technical analysis.
If you wished to have a particular function on a platform, you may need to ask around and when you come across a brokerage, ask the customer service if they have that function on the platform before you open an account with them. For many brokerages, you can pay a fee to have more than the basic functions. Or you may need to be their priority customer to see that function when you log-in,…
An example would be the function called : the GTC function in DBS Vickers, You don’t need to queue every morning in order to hunt for a particular price for a counter.
Is it still advisable to use SC to buy stock for small amount like $1000 to 2000?
Hi Shunxiang,
I would recommend you to do just that if you are picking a specific stock. That is where SCB’s minimum fee of $10 is more cost effective than the other brokerages.
Today,,, the cheapest brokerage remains as the DBS Cash Upfront Account – Minimum $10 or 0.18% whichever is higher,… AND of top of the above, there will be a $5.00 rebate for every trade done ! This rebate arrangement has been extended, and will now be from July 1st.,. till December 31st., 2017 !
Thanks for this great tip! Will keep a lookout for it!
The cheapest brokerage remains as the DBS Cash Upfront Account – Minimum $10 or 0.18%,… AND of top of the above, there will be a $5.00 rebate for every trade done ! This rebate arrangement has been extended, and will now be from July 1st.,. till December 31st., 2017 !
Hi! Can I just check if anyone can open an account with SCB? I’m very new to this and I have a friend who recommended me to open an account with UOB Kay Hian instead of SCB as the person would need to have financial background to do so, is that true?
Good read!
Hi,
How would SCB verify if one has financial background? The most I could remember ticking my level of education during the application form
I DBS or SCB good for Us markets / forex trading ?
Thanks in advance
Depends. If you are actively trading international stocks and not holding ‘forever’ I think any account with the platform of your preference and the lowest pricing works.
If you are investing for the long term like me and do not perform many transactions per month, SCB’s advantage is that it does not charge any custodian fees.
Hi there,
So both SCB and Maybank KE has min.$10 for SGX.
But what if wanna trade overseas market, which has better Fx rates? And would be cheaper?
Hi Calpha,
Thanks for visiting my blog. Unfortunately, I have zero experience trading in overseas markets. Therefore, I am not familiar with the expenses involved.
Hi, I would like to know if I were to invest a lump sum of about 10 to 20k with a “buy and hold” position, would opening a cdp account be better or a custodian account? I consider myself to be a passive investor who will not be doing that many trades.
Hi Jsje,
if you are a passive investor, the “fees” are really negligible in the long run. so i will go for a cdp account if i am in your shoes
Hi, have you noticed if SCB charges any dividend processing fee? The last I encountered it, iOCBC charged me $10 for each foreign counter dividend…
hi, are u referring to dividends from foreign counters via SCB platform?
Hi, its 2019. Does all your article on SC’s charges still subscribe today? Wondering to try trading in both SGX and US market..
hi Sham,
Yes, the same rate still apply as at 26 Jul 2019.
Hi. I’m a newbie with low capital (about $2k) to spare. I’m also looking to buy overseas stocks and hold. Not so frequent trading. So far I understand that Stand Chart has no custody fees which is good for overseas stock trading. But then again I read that it’s better to transfer the stock to CDP if we are holding on the stock for long term. So if we are looking to transfer the stock to CDP (overseas stock) what kind of charges should we look out for? In this case, custodian fee does not apply? Since we are not intending to hold it in the custody account? Correct me if I’m wrong as I’m very new to investing and still very confused. Looking forward to learn from everyone here….
Hi,
So far have you come across any brokerages that allow you to trsf overseas stock to CDP?
Hi
I cant seem to find my comment in which you have kindly replied to. That’s what I’m confused about too.
One moment I was reading that CDP is only for local stocks and you need a custodian account for overseas stock. The next I was reading about people saying transfering of stocks to CDP from custodian. So i thought that was possible for overseas stocks as well. I was reading this particular article :
https://blog.seedly.sg/cdp-vs-custodian-account/
whereby the last part was saying “For ppl who invest, SC lowers the expenses but it will cost you more when you decided to transfer your holdings to a CDP account be it your own or heritance to others. In short, use SC for short-term investment, CDP for long-term investment. ”
So in order to trade overseas stock, die die also must use custodian account right? Which makes Stan Chart the best choice since it doesn’t charge any custody fee. Then if I wanna attend AGM for a overseas stock but the company is located in Singapore, how can I go about doing it?
Hi Mss,
If i am not mistaken, overseas stocks are held in custody for Singaporeans.
Dear Heartland Boy,
Need your advice on this:
I use CPF OA $$$ to buy/sell stocks listed in SGX
Which brokerage is lowest fee? Is it still SC?
How do I transfer my stock holdings with my current brokerage to e.g. SC (assuming i switch to SC)? What fees do I incur?
Thank you
hi KTYeo,
If you use CPF funds to invest, you need to go thru the 3 local banks- dbs, ocbc and uob.
Very useful info. and thanks!
That means I cant sell my existing stocks bought previously via other retail broker(s) if I open a new account with St. Chart. going forward, correct?
Hi Mark,
I believe you would need to pay a one time fee to transfer from CDP to SCB custody
Hi HLB,
Does your article still apply in 2020? I myself started with DBS vickers due to its brand and stability but I mainly use cash upfront which has lower fees.
My question is regarding overseas trading in USD currency. I am thinking of buying a global etf at $1000/month , do you think that SC is the best option for this case? I understand that for oversea stocks it’s all held by the custodian account.
Hi curious,
DBS Vickers will be good if you have multiplier as it increases the eligible spend per month.
you are right that for all overseas stocks, it will be held under custody.
thanks for your response. If i am not wrong the multiplier – investment category only last for the 12 months isnt it? meaning after 12 months of investment there wont be additional interest from it?
Also is the extra interest more beneficial overall compared to the savings from the fee the banks takes?
Hi,
if you referring to your BUY securities (such as stocks), it will be valid for the month that there is a BUY transaction. the 12 months only apply for its products such as unit trusts
Have looked into DBS vickers, seems like they charge $2 custodian fees for int stocks. Not really ideal for long term buy and hold method. Also I did some research and alot of feedback is that SCB forex rates is really bad? asking for a ETF in USD.
Hi Curious,
You are right. Interactive brokers and tiger are better options based on readers’ feedback!
Hi, will anyone be able to share if i can sell my existing stocks in CDP via SCB or vice versa? That is sell my stocks in SCB via UOB-Kay Hian?
Thank you
Hi Juan,
You can perform a transfer of the shares from your CDP to SCB’s custodian account at a fee. I am not sure how much this fee is though but i recall it not being cost-effective
Hi Heartlandboy,
Is there an account maintenance/custody fee for SC?
Thank you for your reply in advance and thank you for such a succinct, yet insightful article!
Hi Brendon,
Thanks for your compliments! There isn’t any account maintenance/custody fee for SCB Brokerage.