Three causes there gained't be considered a 2021 housing industry crash
Step-By-Step Guide To Opening A Stock Brokerage Account In Singapore
This post was first published on 20 April 2021 and it has been updated to include the latest information.
If understanding how to invest on your own is on your list of to-dos, then opening a stock brokerage account is among the first things you need to check off.
In this article, we explain essential things you should know and look out for when opening a stock brokerage account in Singapore.
The first (and many important thing) to know is that you need to open two separate accounts.
#1 A brokerage account with a stock brokerage firm
Via the stock broker of your choice, a brokerage account provides you with access to the securities exchange where one can buy and sell stocks, as well as other listed securities. You might open a stock brokerage account with more than one brokerage firm.
#2 A Central Depository (CDP) account
Operated through the Singapore Exchange (SGX), a CDP account is where stocks and other listed securities you buy on the SGX are automatically deposited and stored for you. Unlike brokerage accounts, individuals can only hold one individual account with CDP.
For investors who wish to hold their stocks with their brokerage firms as custodians, you might not require a CDP account.
Now that you know the main difference between the two accounts that you typically need, let's find out how you can get started.
Watch Also: Step-By-Step Guide To Opening A CDP Account In Singapore
Step 1: Find A Suitable Stock Brokerage Firm
The first thing to do is to identify a suitable brokerage firm.
There are many stock brokerage firms in Singapore. Primarily, they all perform the same main function – enabling investors to purchase and sell stocks on SGX as well as other exchanges around the world.
However, there are a few differentiating criteria that you should consider when deciding between brokerage firms.
Commission: When you buy and sell stocks, you pay a commission fee for every transaction. Commission fees are usually the first thing most investors take a look at when considering brokerages, as the fees could eat into their returns.
Here's a look at the commission charged by major brokerage firms in Singapore for trading on SGX. Do observe that commissions quoted are only for online trading.
| Minimum Commission Fees | Online Trading Fees
(As A Percentage Of Contract Value) |
|||
| Below $50,000 | $50,000 To $100,000 | Above $100,000 | ||
| Stocks Held In CDP Account | ||||
| CGS-CIMB Securities | $25 | 0.275% | 0.22% | 0.18% |
| Citibank | $28 | 0.25% | 0.20% | 0.18% |
| DBS Vickers | $25 | 0.28% | 0.22% | 0.18% |
| KGI Securities | $25 | 0.275% | 0.22% | 0.18% |
| Lim & Tan Securities | $25 | 0.28% | 0.22% | 0.18% |
| Maybank Kim Eng | $25 | 0.275% | 0.22% | 0.18% |
| OCBC Securities | $25 | 0.275% | 0.22% | 0.18% |
| Phillip Securities (POEMS) | $25 | 0.28% | 0.22% | 0.18% |
| RHB Securities | $25 | 0.275% | 0.22% | 0.18% |
| UOB Kay Hian | $25 | 0.275% | 0.22% | 0.20% |
| Brokerage that only offer custodian accounts | ||||
| FSMOne | $10 | 0.08% | 0.08% | 0.08% |
| Saxo Capital Markets | $10 | 0.08% | 0.08% | 0.08% |
| Standard Chartered | $10 | 0.20% | 0.20% | 0.20% |
You can easily see that by and large, most brokerage firms offer much the same and competitive rates. You may also observe that brokerages that only offer custodian accounts also offer a lower commission charge. In addition to these charges, you also have to foot the next fees when buying and selling in your brokerage.
| Type Of Fee | Fee Amount |
| SGX Clearing Fee | 0.0325% Of Contract Value |
| SGX Trading Fee | 0.0075% Of Contract Value |
| SGX Settlement Instruction Fee | $0.35 Per Settlement Instruction |
*7% GST applies on fees
CDP-Linked Account Or Custodian Account?
The most of brokerage firms that offer CDP accounts offer custodian accounts, and usually charge more appealing commission rates as well.
Unlike a CDP-linked stock brokerage account, where stocks that you simply buy are credited to your personal CDP account, using a custodian account means that the custodian (i.e. the brokerage firm) will hold the stock that you buy under their name. This means that if you wish to sell these stocks in the future, you can only do so through the same brokerage firm. On the flipside, commission fees for custodian accounts are usually significantly lower. Whereas buying via CDP-linked accounts will help you to buy and sell your stocks with different brokerage firms.
However, you should also observe that additional fees may be charged. If you're buying overseas stocks, you will also need a custodian account and will incur some custodian fees.
Paying For Your Investments
You can choose to pay for your investments via these common methods:
- Electronic Payment for Shares (EPS) (via ATMs)
- Giro (automatic deductions)
- Cheque
- Cash at the stock brokerage
- Internet banking or telegraphic transfers
Some investors may choose to open a brokerage account with a bank that they already have a checking account or another financial relationship with. This is where local banks may have a slight advantage.
Overseas Markets
Investors who plan to invest in overseas stocks should consider brokerage firms that are able to provide accessibility markets they're interested in. Some common markets provided by many of the brokerage firms listed above include the US, Malaysia, Australia and Hong Kong.
This may save you the trouble of having to open another brokerage account later on.
Step 2: Apply To Your Preferred Brokerage Firm
Once you've decided which brokerage firm you wish to use. You are able to apply directly to them. There are two ways you can do so.
Apply Online
You can apply online with the website of the brokerage firms. Simply do as instructed on the respective websites.
- CIMB Securities
- Citibank
- DBS Vickers Securities
- KGI Securities
- Lim & Tan Securities
- Maybank Kim Eng
- OCBC Securities
- Phillip Securities
- RHB Securities Singapore
- UOB Kay Hian
- FSMOne
- SAXO Capital Market
- Standard Chartered
Head Down To A Branch Office
Alternatively, you can head right down to the branch office personally to open your stock brokerage account. Do take note of any documents that you would need to bring with you.
From time-to-time, you may also have some pop-up booths set up by brokerage firms. This would be during roadshows or during investment talks. You are able to open an account at these booths as well.
Step 3: Apply For Your CDP Account
If this is actually the first time you are applying to open a regular brokerage account, you will typically should also open a CDP account concurrently. This is because the brokerage account that you are opening will need to be tagged to some CDP account, unless it's a custodian account.
Ensure that you meet the following eligibility criteria:
- You must be 18 years old and above
- You ought not to be an un-discharged bankrupt
- You must have a banking account with one of the following banks in Singapore – Citibank, DBS/POSB, HSBC, Maybank, OCBC, Standard Chartered Bank or UOB.
If this is actually the first time you are signing up for a brokerage account, and you are unsure or unwilling to handle the extra paperwork, you can head right down to the branch office of 1 of the brokerage firms. The service staff there will help you process all the documents to set up your CDP account and your brokerage account simultaneously. This saves you the hassle of having to deliver the application form on your own.
You may also choose to open your CDP account online, together with your Singpass by signing up using MyInfo (Singaporeans & PRs only) in Three to five minutes. Alternatively, you can complete an online form that would take you 6-8 minutes.
You can also open a CDP account through mail or by heading down in person to the CDP Customer Service Centre.
[Do observe that some branches may not be functioning as Singapore exits COVID-19 Circuit Breaker]
What's Next?
Once you've submitted the documents required, you need to wait for your submission to be processed. This may take a couple of weeks. If you are opening a CDP account for the first time, you will need to wait for both your brokerage account and your CDP account to be ready before you start investing.
All the information that you need will be sent via mail to your house address:
- CDP Account:
- Account number
- Password
- Link to OneKey 2FA Token
- Brokerage Account:
- Brokerage account ID
- Password
- Pin for Phone Transaction
- Link to OneKey 2FA Token (This is the same token that you will be using for the CDP account)
Managing Your CDP Account Online
As new initiative, now you can use SGX Investor Portal like a one-stop portal for the following features and resources:
- Single login to see securities holdings of all your brokerage accounts
- View and download up to 24 months of e-statements
- View and download up to 60 days of CDP Notifications
- Set up a Watchlist of counters you're looking into (known as Favourites)
- Subscribe to email notifications
- Apply/change Direct Crediting Service bank account*
- Update Particulars*
* Requires transaction signing using OneKey Token
You can also get easy access to key investment resources from SGX for example:
- SGX Academy
- SGX Investor Road Map
- Securities Borrowing and Lending (SBL) Pool
- CDP Buying-in Reports
- Specified Investment Products (SIP) Qualifications
Going forward, more features including Currency Conversion (CCY) service is going to be available by mid-2021, and SBL application and Corporation Actions is going to be introduced by second half 2021.
New to investing? You can go to the ForTomorrow.sg website to read more articles on how you can get started on your investing journey today.
